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Kingfisher plc
1 Paddington Square
London
W2 1GG
+44 (0)20 7372 8008
www.kingfisher.com
2023/24 Annual Report and Accounts
2023/24 Annual Report and Accounts
2023/24 Annual Report and Accounts
2023/24
Annual Report and Accounts
Contents
Strategic Report
2
Kingfisher at a glance
3
Chair’s statement
4
Chief Executive Officer’s statement
6
Our strategy
8
Performance against priorities
10
Key performance indicators
12
Business model
14
People and culture
17
Stakeholder engagement and decision-making
24
Responsible Business
28
Our response to the Task Force on
Climate-related Financial Disclosures
47
Non-financial and sustainability information
statement
48
Financial review
55
Trading review by division
59
Risks
65
Viability statement
67
Going concern
Governance
68
Corporate governance
70
Board of Directors
72
Board composition
73
Board activities
74
Board effectiveness
75
Nomination Committee report
78
Responsible Business Committee report
80
Audit Committee report
84
Directors’ remuneration report
110
Directors’ report
113
Statement of directors’ responsibility
Financial Statements
114
Independent auditors’ report
124
Consolidated income statement
125
Consolidated statement of
comprehensiveincome
126
Consolidated statement of changes in equity
127
Consolidated balance sheet
128
Consolidated cash flow statement
129
Notes to the consolidated financialstatements
175
Company balance sheet
176
Company statement of changes in equity
177
Notes to the Company financial statements
188
Group five year financial summary
Other Information
189
Shareholder information
191
Glossary
1. Variance in constant currency.
2. Alternative Performance Measure (APM). See the Glossary on pages 191 to 193 for definitions and reconciliations of APMs.
3. The Board has proposed a final dividend per share of 8.60p (FY 22/23: 8.60p), resulting in a proposed total dividend per share of 12.40p in respect of FY 23/24
(FY 22/23: 12.40p). The final dividend is subject to the approval of shareholders at the Annual General Meeting on 20 June 2024.
4. Net increase/(decrease) in cash and cash equivalents and bank overdrafts.
Evaluation of our key performance indicators against our strategy can be found on pages 10 and 11 and pages 48 to 54.
Financial highlights
Free cash flow
2,3
£514m
2022/23: £(40)m
Net debt
2
£(2,116)m
2022/23: £(2,274)m
Retail profit²/margin²
£749m
2022/23: £923m
Statutory profit – pre-tax
andpost-tax
Pre-tax
£475m
2022/23: £611m
Post-tax
£345m
2022/23: £471m
Total dividend
3
12.40p
2022/23: 12.40p
Net debt
2
to EBITDA
2
1.6x
2022/23: 1.6x
Basic earnings per share
(EPS) – adjusted and statutory
Adjusted
2
21.9p
2022/23: 29.7p
Statutory
18.2p
2022/23: 23.8p
Net increase/(decrease)
in cash
4
£84m
2022/23: £(555)m
Gross profit/margin
2
£4,776m
2022/23: £4,795m
Sales
£12,980m
2022/23: £13,059m
Adjusted pre-tax
profit
2
/margin
2
£568m
2022/23: £758m
4.4%
(140)bps
For the year ended 31 January 2024
5.8%
(130)bps
36.8%
10bps
(3.1)%¹
Like-for-like²
1Kingfisher 2023/24 Annual Report and Accounts
Kingfisher at a glance
Spain
28
France
240
4
Romania
32
UK &
Ireland
1,233
3
Poland
102
Turkey
368
5
Portugal
3
Other Information
All figures on this page relate to the year ended 31 January 2024.
1. Turkey joint venture included.
2. Total, not full-time equivalent.
3. B&Q 311. Screwfix 922.
4. Castorama 95. Brico Dépôt 125. Screwfix 20.
5. Our stores in Turkey, Koçtaş, are operated as a 50% joint venture.
Store figure as of 31 December 2023.
Our strategic principlesWho we are
Our purpose
Kingfisher operates in eight countries across Europe under banners including B&Q, Castorama, Brico Dépôt, Screwfix, TradePoint and
Koçtaş, supported by a team of over 78,000
1, 2
colleagues.
Our stores
Where we operate
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.
Kingfisher is an international home improvement company
with over 2,000 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.
Better Homes. Better Lives. For Everyone. At Kingfisher, we
believe a better world starts with better homes and we strive to
help make that happen.
2 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Chair’s statement
This has been another busy year for Kingfisher, in which we
made further progress laying the foundations for future growth,
while managing the impact of challenging macroeconomic
conditions in all the markets in which we operate. Now four years
into our ‘Powered by Kingfisher’ strategy, the business is far
more lean, agile and productive than it was. However the cost of
living pressures on our customers proved a significant headwind
throughout the year and this was reflected in our financial
performance. Overall revenues for the Group were down 1.8%
with adjusted pre-tax profits down 25.1%. Free cash flow,
however, of £514 million was up significantly from the prior year.
Geographically, the UK proved our most resilient market with B&Q
and Screwfix both turning in solid performances and gaining market
share. France, Poland and Iberia experienced tougher trading.
Good progress was made on our strategic agenda. The recent
investments we have made in digital and data capabilities are
producing good results, with higher e-commerce sales driven
byrapid progression of our curated online marketplaces for
third party merchants. Our greater focus on trade professionals
is also paying off, especially in the UK, and we see this as a large
and highly valuable opportunity in all our key markets. The
development of the Screwfix business continues apace with 51
new trade counters opened in the UK and Ireland last year,
together with 15 opened in northern France to provide a strong
and effective bridgehead into that market. Screwfix also
launched a new multi-language website to enable e-commerce
for the brand across Europe.
We are committed to providing attractive returns for our
shareholders. The Board is proposing a final dividend of 8.60p,
which would make the total dividend for the year, 12.40p, in line
with last year. Following the completion of our previous share
buyback programmes totalling £600 million, we were pleased to
announce the return of a further £300 million of surplus capital in
a new programme which commenced in October. In total,
£397 million was returned to shareholders in FY 23/24.
Kingfisher has a proud history as a pioneer in responsible
business and the Board continue to champion the cause.
Over the year we made further progress on all aspects of
our environmental, social and governance (ESG) agenda
including significant reductions in our carbon emissions,
increasing the number of products we sell that reduce the
impact on the environment, promoting diversity at every
level in the business, and building up the support we give to
apprenticeships and learning.
The Board considers good governance and diversity of thought
as essential to our long-term success. Succession planning for
roles at the Board and Group Executive level has been given a
higher profile in Board meetings and additional opportunities have
been sought to meet high-potential colleagues from other parts
of theorganisation. To enable this, the Directors have increased
the amount of time they spend ‘out and about’ in the business
with an expanded number of visits last year to stores, offices
anddistribution centres in the UK, France and Poland. Some of
these visits were taken as a whole Board, others involved only
one or two Directors. The additional time has allowed for more
interaction with colleagues at all levels and helped the Board to
observe, at first hand and in more situations, our strategy and
culture in action. A programme of tailored ‘teach-ins’ has also
helped the Board’s understanding of some of the more technical
or complex areas of the business. These included sessions on
the trade proposition, Generative AI, and compact store formats.
The Board also recently completed an internal Board
effectiveness review. This year we introduced a new component
which allowed for individual feedback for each of the Directors.
This was a valuable addition and will be repeated every third year
from now on. Overall results of the review show the Board is
working well together and is finding the right balance of
supporting management while holding them to account.
Board committees operate effectively and the culture around the
board table is respectful, frank, transparent and trusting. I would
like to thank my Board colleagues for their participation in the
review and for their generous support through the year.
Our priorities for 2024 are clear, and are centred on things we
can control. Maintaining and growing our market shares,
improving our productivity, and delivering on our commitments
on free cash flow and shareholder returns. We will also continue
to invest behind our identified drivers of future growth, launching
e-commerce marketplaces in France and Poland, further
expanding the Screwfix network and getting behind our push to
attract more trade customers. We are confident in the long-term
returns opportunity from these investments, but the Board will
continue to manage them thoughtfully and adjust as needed
through what seems likely to be another year of economic
uncertainty for our customers.
Our purpose is to help make better homes and better lives for
everyone and that is something really worth striving for. The
inspirational people who make up Kingfisher are doing exactly
that and I would like to thank each and every one for their
enduring commitment and support both to our mission and to
the business.
Andrew Cosslett
Chair of the Board
24 March 2024
3Kingfisher 2023/24 Annual Report and Accounts
Other Information
This year we have remained focused on supporting our
customers and delivering on our long-term strategy, despite
facing various macroeconomic and consumer challenges in our
markets. I am immensely proud of all our teams, and I would like
to say a huge thank you to all our colleagues for their hard work
and dedication to our customers. Thanks to their efforts, we
continue to make strong strategic progress and position the
business for growth.
Business performance
Our financial performance for the year was in line in with
the revised guidance we set out at our Q3 results. Sales were
down 1.8% to £12,980 million, adjusted profit before tax was
down 25.1% to £568 million and we delivered strong free cash
flow of £514 million.
Trading conditions varied across each of our key markets. In
the UK & Ireland, B&Q, TradePoint and Screwfix each delivered
resilient sales and market share growth. In France, where our
sales performance was impacted by historically low consumer
confidence, we have quickly made significant adjustments to
the cost base and started to embed e-commerce marketplace
and trade customer initiatives similar to those successfully
implemented in the UK. In Poland, where we faced strong
comparatives and a tough economic backdrop, sales trends
are gradually improving in line with the consumer environment.
Encouragingly, on a Group-wide basis, we have seen sequential
quarterly improvement in the volume trend in ‘core’ categories,
which make up 77% of our total sales volumes, as retail price
inflation tapers down.
Strategic progress and growth opportunities
We continue to execute against our strategic objectives at pace
and invest in our multiple growth opportunities.
We are making strong progress against our priority to accelerate
e-commerce by offering customers more speed and choice.
This year we achieved e-commerce sales growth of 6.4%,
supported by strong marketplace sales growth at B&Q, which
reached 38% marketplace participation in January 2024. We are
seeing growing adoption of last-mile fulfilment options including
increased use of our Screwfix Sprint one-hour home delivery
service, Click & Collect lockers in Poland and a new Screwfix
partnership with Deliveroo. Our e-commerce sales penetration
was 17.4% (FY 22/23: 16.3%), over twice the level of FY 19/20.
The success of our marketplaces in the UK and Iberia was well
ahead of our expectations, and we have further marketplace
launches planned in France and Poland this year. Our ambition is
now to reach 30% e-commerce sales penetration, with one third
of our Group e-commerce sales coming from our marketplaces.
We have also continued the expansion of Screwfix, with 51 new
stores opened in the UK and Ireland this year and 22 stores now
open in France, with encouraging results so far. We have also
launched Screwfix as a pure-play online retailer in six European
countries. We are planning for up to 40 store openings in the UK
and Ireland and 15 in France over the coming year. Assuming the
success of the format is confirmed, we see the potential for
more than 600 Screwfix stores in France over the longer term.
Poland remains a market with attractive growth potential and
Castorama Poland opened five stores in the year, bringing its
total to 102 stores. We are targeting up to 75 new medium-box
and compact store openings in Poland over the next five years.
Across the Group, we believe net space growth will drive an
uplift in sales of c.1.5% to 2.5% per annum over the medium term,
primarily driven by Screwfix and Castorama Poland.
Our plans to develop our trade business across our markets are
progressing well. In the UK, we opened 21 new TradePoint
counters at B&Q stores over the year and TradePoint delivered
£834 million of sales. We have a strong plan to drive TradePoint’s
annual sales to more than £1 billion in the medium term, by
growing its customer base and increasing our share of trade
customer spend. Building on TradePoint’s success, we are also
seeing strong results from our trade proposition tests in France,
Poland, Iberia and Romania. We will be accelerating their rollout
this year and we are now aiming to double trade penetration in
France and Poland over the medium term.
Our data, AI and retail media initiatives are also delivering
positive results and we are accelerating their rollout to drive
incremental revenue, profit and cash. For example, we have
successfully implemented AI-powered product
recommendation and personalisation engines in the UK, France
and Romania, and deployed data and AI-driven tools to optimise
markdowns and clearance. Our retail media offering is rapidly
building momentum and is now live in France and at B&Q. Over
time, we see the potential for retail media revenues to reach up
to 3% of the Group’s total e-commerce sales.
We have also outlined a new plan to simplify our French
organisation, significantly improve the performance and
profitability of Castorama France and realise the exciting
potential of Brico Dépôt. The plan has three priorities for
Castorama: restructuring and modernising the store network,
improving operating margin efficiency and growing sales
densities. We believe our overall plan for France will support
a retail profit margin of c.5% to 7% over the medium term.
Responsible Business remains a vital part of our strategy and
we have continued to make progress with our commitments.
We remained well ahead of our 1.5°C aligned science-based
scope 1 and 2 carbon reduction target, reducing our emissions
by 62.0% against a 2016/17 baseline. We are increasingly
leveraging our own exclusive brand (OEB) capabilities to build
products that reduce impact on the environment. Sustainable
Home Products (SHP) represented 49% of our Group sales
this year (FY 22/23: 47%). Reflecting our commitment to
supporting our people to build skills for life, we also announced
a new target for more than 20,000 colleagues to have
completed an apprenticeship, traineeship or external
qualification by 2030, after we exceeded our previous
learning target ahead of schedule.
Chief Executive Officer’s statement
4 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
To hear more about our results from
Thierry Garnier please use the link
www.kingfisher.com/fullyearvideo
Looking ahead
Looking forward, we remain confident in the attractive medium
to longer-term growth prospects of the home improvement
industry and our ability to grow ahead of our markets. We
reaffirm our medium term financial priorities, focused on growth,
cash generation and attractive returns to shareholders.
In the short term, while repairs, maintenance and renovation
activity on existing homes continue to support resilient demand,
we are cautious on the overall market outlook for 2024 due to
the lag between housing demand and home improvement
demand. In 2024 against this backdrop, we will remain agile and
focused on what is within our control – leveraging our strategy
to deliver market share growth, driving productivity gains, and
managing our costs and cash effectively.
This has been another year of significant progress for Kingfisher,
in which the increased agility enabled by our strategy has helped
our teams to effectively manage a volatile environment. We are
now strongly positioned going forward. We are more agile and
efficient, with significant cost taken out across the Group, and
we have multiple profitable growth drivers in which we are
already investing.
I would like to warmly thank all our colleagues once again for
their efforts this year. Together, we are building a stronger
company with exciting prospects for growth, and we can look
ahead to the future with confidence.
Thierry Garnier
Chief Executive Officer
24 March 2024
5Kingfisher 2023/24 Annual Report and Accounts
Other Information
Better Homes. Better Lives. For Everyone. At Kingfisher, we believe a better world starts with better homes and we strive to help
make that happen.
Put simply, our strategic plan – ‘Powered by Kingfisher’ – aimsto maximise the benefits of combining our distinct banners (which
serve a range of different customer needs) with the scale, strength and expertise of the Kingfisher Group.
The differentiation of our banners across trade (Screwfix, TradePoint), discounters (Brico Dépôt France, BricoDépôt Iberia), and
more general DIY needs (B&Q, Castorama France, Castorama Poland, Brico Dépôt Romania, Koçtaş) is a unique strength for us; more
so in a more volatile and uncertain world.
Our strategy
1 2
3 4
Powered by Kingfisher, our banners are leveraging data
and artificial intelligence (AI) to build customer-centric
tools and solutions, support better commercial
decision-making and higher productivity, thereby
unlocking significant new sources of revenue, profit and
cash. In addition, with c.1bn customer visits per annum
across our e-commerce touchpoints, we believe that
many of our suppliers – including leading national and
international home improvement brands – could
become advertisers. Over time, we see the potential
for retail media revenues to reach up to 3% of the
Group’s total e-commerce sales.
Our OEB product development is a significant source
of value for our banners and their customers. OEBs
provide us with the ability to differentiate ourselves
from the rest of the market by delivering simple and
innovative solutions at affordable prices, with a focus
on reducing environmental impact. OEBs 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.
Build a data-led
customer experience
Differentiate and win through
own exclusive brands (OEB)
Our banners occupy number one or two positions in 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 believe net space growth will
drive an uplift in sales of c.+1.5% to +2.5% per annum
over the medium term.
We will continue to grow our e-commerce sales and
participation, with the ambition of reaching 30% of
Group sales from e-commerce channels (one third of
which from marketplace). We will do this by offering our
customers ‘speed’ – faster fulfilment of orders through
leveraging our store estate – and ‘choice’ – broader
product choice, including via our e-commerce
marketplace propositions. This will be supported by
the ongoing modernisation and simplification of our
technology landscape, which is unlocking the rapid
development of more customer-centric and
personalised mobile apps, digital tools and services.
Grow by building on our
different banners
Accelerate e-commerce through
speed and choice
6 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
5 6
7 8
Develop our
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 and expansion across our banners,
range expansion and improved merchandising, building
deeper relationships with trade customers, new
services, loyalty programme optimisation and digital
enhancements. We are aiming to reach more than
£1 billion of sales at TradePoint in the UK & Ireland, and
double trade sales penetration in France and Poland,
over the medium term.
Our home improvement banners operate over 2,000
stores across eight countries in Europe. They play an
integral role in meeting the demand for fast fulfilment via
e-commerce channels, whether through C&C or delivery,
to where the customer wants it. Compact stores are also
playing an increasingly crucial role in addressing the
consumer need for 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.
Roll out
compact store formats
We are committed to leading our industry in responsible
business practices and energy efficiency. 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.
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 have adopted a ‘done is better than perfect’
mindset to move faster and with more agility, given
the rapidly changing environment in which we do
business. And we continue to focus on becoming
leaner and more productive, as well as lowering our
same-store inventories.
Lead the industry in Responsible Business
and energy efficiency
Human, agile
and lean
Equally, Kingfisher’s scale and resources are a critical source of competitive advantage for our banners, providing product
development and supply (through our industry-leading own exclusive brands), access to leading-edge technology, digital and
data capabilities, as well as international support, sourcingand buying scale.
We are continuing to invest for growth in multiple areas ofthebusiness, underscoring our confidence in the medium-to-longer term
outlook for home improvement growth in our markets. We are pleased with the progress we have made over the last year, against
the backdrop of what remains an extraordinarily challenging macroeconomic and consumer environment in our markets.
7Kingfisher 2023/24 Annual Report and Accounts
Other Information
Strategic priorities Progress Proof points for FY 23/24 Forward focus for FY 24/25
Grow by building on
our different banners
— Expanded Screwfix in the UK, Ireland and France.
— Launched Screwfix as a pure-play online retailer in six European countries.
— Continued expansion of Castorama in Poland.
51
Screwfix stores opened in the UK & Ireland
5
Castorama Poland stores opened
22
Screwfix stores now open in
France
— Ongoing roll-out of Screwfix; in FY 24/25, up to 40 new
stores planned in the UK and Ireland and up to 15 new stores
planned for France.
— Castorama Poland targeting up to 75 medium-box and
compact stores over the next five years.
— Longer term, we intend to serve up to 20 European
countries via Screwfix as a pure-play online retailer.
Accelerate
e-commerce through
speed and choice
— Continued strong growth of e-commerce marketplace proposition at B&Q and Brico Dépôt Iberia.
— Expanded Screwfix Sprint service in the UK which is now available in 334 stores, covering 45%
of UK postcodes.
— Screwfix has partnered with Deliveroo, offering a limited range of products on-demand.
— Growing adoption of Castorama Poland’s Click & Collect lockers, increasing customer convenience
with 24/7 collection availability.
+6.4%
total e-commerce sales
93%
of orders picked from stores
£154m
B&Q’s marketplace gross sales
38%
marketplace participation at
B&Q in January 2024
— Launching similar, tailored e-commerce marketplaces in France
and Poland.
— Ambition of reaching 30% e-commerce sales penetration, one
third of which represents marketplace gross sales.
— Plans to further improve app capabilities across the Group.
Build a data-led
customerexperience
— Launched AI-powered product recommendation tools in the UK, France and Romania.
— Implemented an end-to-end supply chain visibility tool.
— Accelerating our retail media (advertising) proposition at B&Q, Castorama France and
Brico Dépôt France.
c.10%
of B&Q’s e-commerce sales from product
recommendations
c.1bn
customer visits across our
e-commerce touchpoints
annually
— Ambition for retail media income to reach 3% of the Group’s
total e-commerce sales.
— Further banner roll-outs planned for data and AI-driven
tools to optimise promotions, markdowns and clearance.
— Rolling out retail media proposition to further banners.
Differentiate and win
through own exclusive
brands (OEB)
— OEB products continue to drive affordability, product innovation and reduced environmental
impact, and carry a higher gross margin % on average than branded products.
— Resilient performance from OEB ranges within our tools & hardware and building & joinery categories.
— Developed and started roll-out of Green Star product marker, which aims to make it easier for
customers to identify and purchase products that have a reduced impact on the environment.
45%
of Group sales from OEBs
60%
of OEB sales from Sustainable
Home Products
21%
of Group sales from five leading
OEBbrands
— Continue the roll out of the Green Star product marker
to all banners.
— Targeting 70% of OEB sales from SHPs by FY 25/26.
— Establish OEB as the most affordable solution for customers.
Develop our trade
business
— Accelerating development of trade proposition in France, Poland, Iberia and Romania, launching
tests in 42 stores.
— Leveraged our OEBs to develop and launch trade-focused products for our banners.
— TradePoint (in B&Q) like-for-like sales growth of 0.7%, outperforming B&Q retail and representing
22% of B&Q’s total sales.
21
new TradePoint counters opened inthe UK
26
Castorama Poland stores trialling CastoRent
tool rental service
24
Brico Dépôt France stores
launched a trade loyalty
programme
— Aiming for more than £1 billion sales at TradePoint UK &
Ireland, and to double trade penetration in France and
Poland over the medium-term.
— TradePoint to begin tests in FY 24/25 to increase presence
in smaller B&Q stores.
Roll out compact store
formats
— High street compact store tests (B&Q Local in the UK, Casto in France) continue to deliver
encouraging learnings and results.
— Opened the first two Brico Dépôt compact stores in France.
— Testing Castorama Smart, small retail park concept, in Poland.
— Screwfix continues to test its ultra-compact format Collect stores.
9
new compact stores opened in the UK, France
and Poland
10
B&Q Local stores open across London
14
high street concept stores now
open in the UK, France and
Poland
— Continue to iterate high street and small retail park tests
accounting for local customer needs as we create an
optimum blueprint.
— Focus on optimising the proposition of Brico Dépôt France’s
compact stores.
— Continue to test Screwfix Collect.
Lead the industry in
Responsible Business
and energyefficiency
— Continued to prioritise pay awards to help colleagues manage higher costs of living.
— New target announced for more than 20,000 colleagues to complete an apprenticeship,
traineeship or external qualification by 2030.
— Helped reduce our carbon footprint from our own operations through the decarbonisation
of our logistics network and switching to more efficient vehicles across our delivery fleets.
49%
of Group sales from Sustainable Home Products
3.2m
people helped through charitable partnerships and
banner Foundations since FY 16/17
62.0%
reduction in carbon footprint
for our own operations against
FY 16/17 baseyear
10%
of Group sales from energy
and water-saving products
— Continue to progress against our four key pillars: colleagues,
customers, communities and planet.
— Continue to reduce the intensity of our scope 3 emissions
from the supply chain and customer use of products, and
remain on track to meet our target of a reduction of 40%
by 2025.
— Target for Sustainable Home Products (SHPs) to reach
60% of group Sales by FY 25/26.
Human, agile and lean
— Progress made in transitioning to a more agile and modular technology operating model; moving
from physical data centres to the cloud through a new strategic partnership with Google.
— Multi-year cost reduction programmes continue to help offset inflationary pressures.
— Actions underway to further optimise supply chain and inventory management.
9
rightsizings completed at B&Q and Castorama
France over the last three years
57
eNPS score, setting Kingfisher
within the top 5% of worldwide
retailers
— Continue to focus on becoming leaner and more productive,
as well as lowering our same-store inventories.
— All banners to run at least two colleague surveys a year, enabling
better visibility and management of engagement levels.
Performance against priorities
8 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Strategic priorities Progress Proof points for FY 23/24 Forward focus for FY 24/25
Grow by building on
our different banners
— Expanded Screwfix in the UK, Ireland and France.
— Launched Screwfix as a pure-play online retailer in six European countries.
— Continued expansion of Castorama in Poland.
51
Screwfix stores opened in the UK & Ireland
5
Castorama Poland stores opened
22
Screwfix stores now open in
France
— Ongoing roll-out of Screwfix; in FY 24/25, up to 40 new
stores planned in the UK and Ireland and up to 15 new stores
planned for France.
— Castorama Poland targeting up to 75 medium-box and
compact stores over the next five years.
— Longer term, we intend to serve up to 20 European
countries via Screwfix as a pure-play online retailer.
Accelerate
e-commerce through
speed and choice
— Continued strong growth of e-commerce marketplace proposition at B&Q and Brico Dépôt Iberia.
— Expanded Screwfix Sprint service in the UK which is now available in 334 stores, covering 45%
of UK postcodes.
— Screwfix has partnered with Deliveroo, offering a limited range of products on-demand.
— Growing adoption of Castorama Poland’s Click & Collect lockers, increasing customer convenience
with 24/7 collection availability.
+6.4%
total e-commerce sales
93%
of orders picked from stores
£154m
B&Q’s marketplace gross sales
38%
marketplace participation at
B&Q in January 2024
— Launching similar, tailored e-commerce marketplaces in France
and Poland.
— Ambition of reaching 30% e-commerce sales penetration, one
third of which represents marketplace gross sales.
— Plans to further improve app capabilities across the Group.
Build a data-led
customerexperience
— Launched AI-powered product recommendation tools in the UK, France and Romania.
— Implemented an end-to-end supply chain visibility tool.
— Accelerating our retail media (advertising) proposition at B&Q, Castorama France and
Brico Dépôt France.
c.10%
of B&Q’s e-commerce sales from product
recommendations
c.1bn
customer visits across our
e-commerce touchpoints
annually
— Ambition for retail media income to reach 3% of the Group’s
total e-commerce sales.
— Further banner roll-outs planned for data and AI-driven
tools to optimise promotions, markdowns and clearance.
— Rolling out retail media proposition to further banners.
Differentiate and win
through own exclusive
brands (OEB)
— OEB products continue to drive affordability, product innovation and reduced environmental
impact, and carry a higher gross margin % on average than branded products.
— Resilient performance from OEB ranges within our tools & hardware and building & joinery categories.
— Developed and started roll-out of Green Star product marker, which aims to make it easier for
customers to identify and purchase products that have a reduced impact on the environment.
45%
of Group sales from OEBs
60%
of OEB sales from Sustainable
Home Products
21%
of Group sales from five leading
OEBbrands
— Continue the roll out of the Green Star product marker
to all banners.
— Targeting 70% of OEB sales from SHPs by FY 25/26.
— Establish OEB as the most affordable solution for customers.
Develop our trade
business
— Accelerating development of trade proposition in France, Poland, Iberia and Romania, launching
tests in 42 stores.
— Leveraged our OEBs to develop and launch trade-focused products for our banners.
— TradePoint (in B&Q) like-for-like sales growth of 0.7%, outperforming B&Q retail and representing
22% of B&Q’s total sales.
21
new TradePoint counters opened inthe UK
26
Castorama Poland stores trialling CastoRent
tool rental service
24
Brico Dépôt France stores
launched a trade loyalty
programme
— Aiming for more than £1 billion sales at TradePoint UK &
Ireland, and to double trade penetration in France and
Poland over the medium-term.
— TradePoint to begin tests in FY 24/25 to increase presence
in smaller B&Q stores.
Roll out compact store
formats
— High street compact store tests (B&Q Local in the UK, Casto in France) continue to deliver
encouraging learnings and results.
— Opened the first two Brico Dépôt compact stores in France.
— Testing Castorama Smart, small retail park concept, in Poland.
— Screwfix continues to test its ultra-compact format Collect stores.
9
new compact stores opened in the UK, France
and Poland
10
B&Q Local stores open across London
14
high street concept stores now
open in the UK, France and
Poland
— Continue to iterate high street and small retail park tests
accounting for local customer needs as we create an
optimum blueprint.
— Focus on optimising the proposition of Brico Dépôt France’s
compact stores.
— Continue to test Screwfix Collect.
Lead the industry in
Responsible Business
and energyefficiency
— Continued to prioritise pay awards to help colleagues manage higher costs of living.
— New target announced for more than 20,000 colleagues to complete an apprenticeship,
traineeship or external qualification by 2030.
— Helped reduce our carbon footprint from our own operations through the decarbonisation
of our logistics network and switching to more efficient vehicles across our delivery fleets.
49%
of Group sales from Sustainable Home Products
3.2m
people helped through charitable partnerships and
banner Foundations since FY 16/17
62.0%
reduction in carbon footprint
for our own operations against
FY 16/17 baseyear
10%
of Group sales from energy
and water-saving products
— Continue to progress against our four key pillars: colleagues,
customers, communities and planet.
— Continue to reduce the intensity of our scope 3 emissions
from the supply chain and customer use of products, and
remain on track to meet our target of a reduction of 40%
by 2025.
— Target for Sustainable Home Products (SHPs) to reach
60% of group Sales by FY 25/26.
Human, agile and lean
— Progress made in transitioning to a more agile and modular technology operating model; moving
from physical data centres to the cloud through a new strategic partnership with Google.
— Multi-year cost reduction programmes continue to help offset inflationary pressures.
— Actions underway to further optimise supply chain and inventory management.
9
rightsizings completed at B&Q and Castorama
France over the last three years
57
eNPS score, setting Kingfisher
within the top 5% of worldwide
retailers
— Continue to focus on becoming leaner and more productive,
as well as lowering our same-store inventories.
— All banners to run at least two colleague surveys a year, enabling
better visibility and management of engagement levels.
9Kingfisher 2023/24 Annual Report and Accounts
Other Information
Key performance indicators
Total sales decreased by 1.8% on a constant currency basis,
to £12,980 million, reflecting a resilient performance in core
categories, particularly in the UK & Ireland, and the adverse
impact of weaker 'big-ticket' sales in the latter part of the year
and unseasonal weather on seasonal category sales.
Retail profit down 19.5% in constant currency to £749 million
(FY 22/23 £923 million; FY 21/22 £1,148 million), reflecting lower
gross profits in France and Poland, and higher operating costs in
the UK & Ireland and Poland largely due to higher pay rates and
energy costs.
Financial performance indicators
Total sales Retail profit
1
We use a range of financial and non-financial key performance indicators (KPIs) to track and evaluate delivery of our ‘Powered
byKingfisher’ strategy.
1. Denotes an Alternative Performance Measure (APM). APMs are defined in the Glossary on pages 191 to 193.
Free cash flow of £514 million, up £554 million (FY22/23: £(40)
million), reflecting an unwind of working capital outflows from the
prior year and lower capital expenditure.
Free cash flow
1
2021/22
2022/23
2023/24
£13,183m
£13,059m
£12,980m
£1,148m
£923m
2021/22
2022/23
2023/24
£749m
£385m
£(40)m
2021/22
2022/23
2023/24
£514m
Like-for-like sales down 3.1%, excludes a +1.3% sales impact from
a net increase in space, driven by Screwfix store openings in the
UK & Ireland and Castorama in Poland, and the acquisition of
assets of Connect Distribution Services Limited (renamed
Screwfix Spares).
Adjusted pre-tax profit
1
Like-for-like sales
1
Adjusted pre-tax profit down 25.1% to £568 million
(FY22/23: £758 million; FY 21/22: £949 million), reflecting lower
retail profit, higher central costs and higher share of JV interest
and tax, partially offset by lower net finance costs.
£949m
£758m
2021/22
2022/23
2023/24
£568m
9.9%
(2.1)%
2021/22
2022/23
2023/24
(3.1)%
10 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Non-financial performance indicators
Inclusion and diversity Responsibly sourced wood and paper
We continue to strengthen our actions and focus to improve
representation across the Group. Women in senior leadership
is up by 2.8% (FY 23/24: 28.6%; FY 22/23: 25.8%). Women in
management is up by 0.7% (FY 23/24: 39.6%; FY 22/23: 38.9%).
The share of responsibly sourced wood and paper in our
products as a percentage of total SKUS sold, is up year-on-year
(FY 23/24: 96.6%; FY 22/23: 94.5%) reflecting our commitment to
achieving our target by the end of FY 25/26.
1. We have restated FY 22/23 reduction against baseline in operational carbon emissions to reflect additional data received after the reporting period’s closure.
Total Group sales from Sustainable Home Products (SHP)
up by 2.6 ppts (FY23/24: 49.4%; FY22/23: 46.8%). Share of
SHP sales for OEBs increased by 3.7 ppts (FY23/24: 60.1%;
FY22/23: 56.4%). This progress reflects our commitment to
achieving our target by the end of FY25/26.
Sustainable Home Products: % of retail sales
87.2%
94.5%
2021/22
2022/23
2023/24
96.6%
2021/22
2022/23
2023/24
44.1%
46.8%
49.4%
37.9%
25.2%
38.9%
25.8%
2021/22
2022/23
2023/24
Senior leadership, % of women
Management, % of women
28.6%
39.6%
Operational carbon emissions reduction Community: people we have helped
We have reduced absolute greenhouse gas emissions from
our operations by 62.0% since FY 16/17, surpassing our science-
based target of 38% reduction by FY 25/26. The key drivers for
sustained reductions include decarbonisation efforts across our
logistics network and property portfolio.
1.2 million people benefited from our community contributions
(FY 22/23: 0.5 million) delivered through our charity partnerships
and banner foundations. A total of 3.2 million people have
benefited from our community contributions since FY 16/17.
24.5%
51.0%
1
2021/22
2022/23
2023/24
62.0%
0.8m 1.6m
0.5m 2.1m
3.2m
2021/22
2022/23
2023/24
Number of people who benefited from our
community contributions during the year
Number of people who benefited from our
community contributions since 2016 (cumulative number)
1.2m
11Kingfisher 2023/24 Annual Report and Accounts
Other Information
We offer home improvement products and services
to consumers and trade professionals across our
over 2,000 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.
Business model
Our key resources
Over
78,000
engaged colleagues with the
right skills to serve customers.
£13 billion
of sales in eight countries;
collective buying scale.
Our people
and culture
Our financial
strength and scale
Distinct banners which
address diverse customer
needs with different models,
strong customer relationships
and a clear positioning
and plan.
Our banners occupy number
one or number two positions
in our key markets.
Our diverse and trusted
banners
Our market-leading
positions
Network of over
2,000
stores, strong e-commerce
capabilities, as well as
franchiseand joint
venture partners.
Our own exclusive brands
(OEB) allow ourbanners to
offer differentiated products
in terms ofinnovation,
affordability and reducing
environmental impact.
Our channels Our own exclusive
brands
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.
Longstanding commitment
to make a positive impact
for communities, colleagues,
customers and the planet.
Our supplier
relationships
Our Responsible
Business practices
12 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Our leading 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.
1. Kingfisher has ‘Centres of Excellence’ in supply chain, trade, compact stores,
customer services, data, technology, and e-commerce & marketplace.
13
How we create value Who we create value for
Making better homes
and better lives for
everyone; helping
tradespeople to
get their jobs done
quickly and affordably.
Inclusive, rewarding
work and careers,
developing skills.
Operating as a
responsible business,
with strong community
involvement.
Growing the value of
the company
sustainably.
Growing our business
through different
partnership models,
including our joint
venture in Turkey
and wholesale and
franchise models.
Protecting and
restoring natural
resources and tackling
climate change.
Sharing value in our
supply chain.
Customers Colleagues
Communities and
society
Shareholders
Partners
Environment
Suppliers
Sourcing and buying delivering lower cost prices across all
products (OEB and brands).
Technology and product 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 responsible businesspractices.
Differentiated OEB which are innovative and provide a key
source of difference.
13Kingfisher 2023/24 Annual Report and Accounts
A focus on optimising colleague reward and continued work in
this space saw 2023 employee Net Promoter Scores (eNPS)
for reward rise by 12 points and wellbeing scores increase
by 6 points. As part of our efforts to continue to improve
transparency and equity across the organisation we will
be adopting the principles from the EU Pay Transparency
Directive across the Group.
Capabilities to fuel growth
Apprenticeships and early career schemes are a key
differentiator of employer brand
We are proud to have reached our target of delivering five
million hours of learning to colleagues, three years early as
part of the learning for life pillar of our I&D strategy. We have
now set a new target to deliver 20,000 completed Group-wide
apprenticeships or formal qualifications by 2030. This target
recognises our commitment to equip our colleagues with
formal education.
Deep functional expertise deployed in priority areas
Our Academy offering has grown this year. We have continued
development in functional experience and technical skills in
supply chain & logistics, offer & sourcing, and digital
&technology.
In B&Q, the Academy offering is now available to more than 500
colleagues providing functional expertise and technical skills
needed to support the business plan and to help ensure we are
fit for the future.
In Group digital & technology functions, colleagues had access
to targeted, skill-building training and development on strategic
capabilities such as engineering, cloud-based tools, data
analytics, product management, business analysis, agile ways
of working, and services tools and frameworks.
An agile, inclusive culture led by trust
Top quartile eNPS- compelling colleague proposition aligned
to strategy and performance
Colleague engagement across the Group remained strong this
year. In the all-colleague engagement survey held in FY 23/24,
we heard from 87% of our colleagues (up 4% compared with
FY 22/23), with colleagues sharing 282,000 comments,
demonstrating how they feel confident to share their feedback
and ideas. Our eNPS of 57 is significantly ahead of the global
retail benchmark (+32 points above the median), placing us in the
top 5% of retailers. We saw improvement in both our attrition
levels across all banners in the last year and the time it takes to
hire new colleagues in our UK banners.
We continue to assess our progress on colleague engagement
against the key metrics of our culture through both formal and
informal mechanisms, including regular colleague surveys using
the Workday Peakon platform, the Kingfisher Colleague Forum
and works councils, colleague networks, social channels and
regular town hall meetings.
Throughout 2023/24 our Senior Independent Director,
Catherine Bradley, continued to represent the Board at the
Kingfisher Colleague Forum and met with colleagues throughout
the year.
Our 78,000 colleagues are key to our success. We strive to be an
inclusive employer where every individual can feel free to be
themselves, share their views and ideas and progress their career.
Our People and Culture Plan, which launched in 2020, is a key
enabler of our ‘Powered by Kingfisher’ strategy. The plan is
based on four pillars which we believe will create an organisation
that delivers performance in the long-term and enable us to
attract the talent we need to deliver our purpose to help make
better homes, better lives, for everyone:
— Build a lean and agile organisation.
— Source and develop the skills and the talent that will give us
the capability to fuel growth.
— Create an agile, inclusive culture led by trust.
— Develop diverse leaders who inspire growth
Delivering our People and Culture Plan
Progress made across our people and culture pillars in FY23/24
includes:
— Evolving our operating model to fuel our ‘Powered by
Kingfisher’ strategy.
— Building our in-house capabilities in critical skills to fuel
growth and investing in our long-term talent pipeline
through commitment to apprenticeships.
— Sustaining our colleague engagement levels in the top
quartile of retailers and of all organisations globally.
— Setting behavioural expectations, strengthening inclusion
and proactively build a more inclusive culture.
— Continued investment in our leadership capability and
pipeline for the future.
Lean and agile organisation
In 2023/24 we continued to evolve our Group operating model
to benefit from Group scale and innovation.
In technology, to enhance our customer focus we have
reorganised teams around capability areas to support skill
development. Changes to the structure of our technology
team simplify how we operate, enable us to be more agile
and provide customer-centric decision-making. As part of our
in-sourcing strategy we have established engineering teams
in Poland and Romania.
We have driven productivity in our stores, including expanding our
digital hub proposition and out of hours operation support for our
biggest stores in B&Q. In Castorama Poland, we have rebalanced
customer facing roles with management and support roles.
Optimise colleague reward
As a responsible employer we have continued to monitor the
cost of living in each of our markets and have initiatives in place
to support colleagues in our stores and head offices. Colleague
pay has been addressed through annual salary increases in each
of our markets and we have responded to changes to the
National Minimum Wage or local equivalent. We will continue
to ensure that we are aligned to market practice and that our
colleagues are appropriately supported with the increasing
costs of living. For example, in the UK we have extended our
Colleague Support Fund, in partnership with the Retail Trust,
which supports colleagues experiencing financial difficulties.
People and culture
14 Kingfisher 2023/24 Annual Report and Accounts
Other InformationGovernance Financial StatementsStrategic Report
Recognised and trusted as progressively more inclusive
We remain focused on ensuring that we create a culture that is
agile, inclusive and led by trust. Our inclusion score, based on the
question ‘I feel a sense of belonging at Kingfisher’ is 52 eNPS,
placing us in the top 5% of Peakon’s all-industry inclusion
benchmark. Colleagues also indicated a 7-point rise in trust
and a 9-point improvement in collaboration, all of which has
contributed to an increased agility score of 55 eNPS.
In 2023/24 we designed our Group-wide allyship campaign,
called ‘Together. Stronger’. The campaign sets clear minimum
standards and expectations on inclusive behaviours and
educates on the importance of everyday allyship. Colleagues
complete mandatory training on non-inclusive behaviours and
how to tackle them. Colleagues have been invited to make
personal commitments to being a better ally.
Our colleague networks have also flourished this year. Our more
established groups have seen success by being shortlisted and
winning a series of awards such as ‘Best Network’ at the Women
in Tech awards as well as ‘Outstanding Network of the Year’ at
the European Diversity Awards. We have also seen the launch of
the new Black Employee Network at Screwfix.
43.3%
56.7%
Female: 32,297
Male: 42,228
Female: 4
Male: 5
44.4%
55.6%
28.6%
71.4%
Female: 89
Male: 222
36.1%
63.9%
Female: 30
Male: 53
The Board
1
Senior leadership
1, 2, 3
Total workforce
1, 3
Group Executive and
their direct reports
1
1. The 2022/23 gender breakdown of colleagues and Directors was as follows:
– The Board: 4 female (44.4%) 5 male (55.6%).
– Senior leadership: 78 female (25.8%) 224 male (74.2%).
– Total workforce: 33,482 female (43.1%) 44,219 male (56.9%).
– Group Executive and their direct reports: 29 female (33.3%) 58 male (66.7%).
2. As disclosed, we remain committed to our 2025 target to increase women in senior leadership to 35% and women in management to 40%. 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 2024, the gender breakdown of colleagues and directors was as follows:
Diverse and inspiring leaders
Highly engaged leaders, collaborating to drive growth
In FY 23/24 we have continued to invest in our leaders, offering
a variety of development opportunities including an International
Learning Expedition, workshops focused on building trust, and
our Kingfisher Retail Academy, which consists of a series of
leader-led masterclasses in professional retail knowledge and
skills, in addition to executive coaching.
Engagement for the Kingfisher Leadership Team (KFLT) has
remained constant at 74 eNPS year-on-year; however, our
investment in leaders has contributed to substantial increases
in scores that relate to culture (agility +28 points, trust +15 points,
collaboration +23 points), as well as an increased sense they are
delivering positive outcomes for customers (meaningful work
+20 points). This indicates that the KFLT has experienced a
fundamental shift in connection, collaboration and meaning
in the last year.
15Kingfisher 2023/24 Annual Report and Accounts
People and culture continued
Robust senior leadership succession pipeline
We have also delivered Kingfisher-wide development
opportunities to our next generation of leaders which
included personal potential and development assessments,
career development workshops, and access to our Kingfisher
Retail Academy.
We have set targets on leadership succession coverage and
the diversity of that coverage. Our succession coverage target
is to ensure that 70% of KFLT roles have succession coverage,
and we have ended the 2023/24 year at 60%. Our diversity
target is to ensure that 70% of KFLT roles have gender diverse
coverage, for which we ended the 2023/24 year at 65%. We
have continued to benchmark our leadership strength against
external standards, which has informed actions to enhance
succession readiness.
We remain firmly on track to reach our gender diversity target of
40% women in management by 2025 (currently at 39.6%). We
have seen strong progress in 2023/24 on senior leadership
gender diversity (+2.8% delivered in 2023/24, more than was
delivered in the previous two years). We continue to work towards
reaching our 2025 target of 35% women in senior leadership.
Our focus on diversity is expanding beyond gender, with a strong
focus on reflecting the customers and communities we serve.
All banner boards, except two, have successfully achieved the
net +1 diverse member by 2023 target, and all Group banners
have identified local diversity targets and measures that reflect
their market and operating environment. For example, we have
set a new target of improving ethnic diversity in our most senior
leadership in the UK to 16% by 2030 (see page 77 for more
information on how this aligns with the Parker Review). Our
strategy to deliver this target is underpinned by seeking insight
from candidate and colleague data on how people move into and
through our organisation; identifying and addressing barriers to
progression and gaps in sentiment between minority and
majority groups; and working in close partnership with our
colleague networks and forums on evolving our agile, inclusive
culture led by trust.
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, disability (including for
colleagues who become a disabled person whilst in employment),
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 full and fair consideration during 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
adjustments and appropriate training for their aptitudes and
abilities, 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.
16 Kingfisher 2023/24 Annual Report and Accounts
Other InformationGovernance Financial StatementsStrategic Report
Pages 18 to 23 set out further consideration of each of our key
stakeholders and examples of how they have been engaged
during the year.
Page 73 sets out the Board’s key activities during the year and
the section 172 matters considered in pursuing these activities.
Section 172(1) Statement
The Board and the company spend time considering our impact
on our stakeholders, where 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,
the needs and concerns of our stakeholders continue to be 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 2023/24.
Shareholder returns
1
3
6
Share buyback
In September 2023, the Board agreed to a further £300 million
share buyback programme, having evaluated the Group’s financial
and capital allocation priorities in the context of ‘Powered by
Kingfisher’.
The Board assessed the company’s cash position and balance sheet
strength against our capital allocation framework and prevailing
macroeconomic conditions, taking into account its responsibility to
safeguard the long-term success of the company for the benefit of
all stakeholders. This included scenario analysis and liquidity,
leverage and ratings implications, as well as impact on credit ratings,
market sentiment and the company’s ability to continue to meet its
obligations to the defined benefit pension scheme and its members.
The directors weighed up investment and growth opportunities to
ensure that funds were not needed elsewhere across the business.
Dividend policy
During the year, the Board recommended a final dividend of 8.60
pence per share and approved an interim dividend of 3.80 pence
per share. In reaching their decision, the Board assessed the level of
dividend to ensure it was sustainable and aligned with the
progressive and sustainable dividend policy expected by
shareholders. This included consideration of financial policies,
leverage metrics and liquidity, as well the company’s obligations to
the defined benefit pension scheme. The Board balanced market
expectations and trading performance with reinvestment in the
business, taking into account the macroeconomic outlook and profit
expectations for future years.
Strategy
1
2
3
4
5
6
Acquisition of Connect Distribution assets
The Board was pleased to secure the future of the Connect
Distribution Services business (‘Connect’) in March by acquiring
the stock, intellectual property, contracts and fixed assets of
Connect out of administration, for a cash consideration of
£3 million.
In considering the merits of the acquisition, the Board noted the
opportunities for growth within the Connect business along with the
potential synergies with other parts of the Kingfisher Group. Aside
from the commercial logic of the transaction, the directors also
viewed the Connect business as an excellent cultural fit for Screwfix
in addition to the benefits associated with helping tradespeople and
consumers keep products in use for longer, thereby supporting our
Responsible Business agenda.
Marketplace
The Board welcomed the continued growth of the Group’s
marketplace proposition during the year with B&Q reaching 38%
marketplace participation in January 2024.
To further support the scaling and growth of our marketplace
capabilities, the Board endorsed a number of expansion plans,
taking into account customer expectations for choice and
convenience whilst maintaining a high standard of business
conduct through the 3P merchants we engage with. These plans
include a strategic partnership with Octopia, one of the leading
marketplace aggregators. Additionally, the Group intends to launch
marketplaces in France and Poland in 2024. Both initiatives serve
as evidence of our commitment to the accelerate e-commerce
element of our strategy.
Key considerations
1
Long-term impact
2
Interests of colleagues
3
Fostering business relationships
4
Impact on community and environment
5
Maintaining reputation for high standards
of business conduct
6
Acting fairly between members
Stakeholder engagement and
decision-making
17Kingfisher 2023/24 Annual Report and Accounts
Other Information
This section details examples of how we have engaged with our
key stakeholders during the year and insights gained through this
engagement, as well as how this engagement may have
influenced the Board’s discussions and decision-making.
The Board annual effectiveness review gives directors the
opportunity to comment on the prominence of the stakeholder
voice in Board decision-making and the effectiveness of each
committee, including engagement with its key stakeholders. The
annual evaluation process is set out on page 74.
Customers
Who they are
— Anyone who visits our stores or online platforms.
Why Kingfisher engages
— Customer satisfaction and safety 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 we engage
Group engagement
— Continuous retail and trade customer surveys: over
1.4 million customers surveyed: monitoring customer
satisfaction in-store and on our websites; tracking
consumer brand perceptions over time against our
competitors on a range of issues, including sustainability;
monitoring consumer sentiment and home improvement
activity levels.
— Commissioning of ad hoc research to gather feedback
before and after launching new products, services, or
store concepts.
— Regular ‘price reality’ and ‘price perception’ monitoring of
price indices versus our competitors in key categories.
— Meeting and discussing with customers at Screwfix LIVE
Trade Show in September 2023.
Board engagement
— Regular updates on customer opinion, behaviour and
feedback, monthly net promoter scores (NPS), and
customer insight.
— Receipt of the commercial dashboard on a monthly basis
which consolidates a broad range of metrics, including
price indices, market trends, competitor activity and
customer insight.
— Board teach-ins: trade proposition, Generative AI, and
small format stores, including relevant site visits in
France, Poland and the UK.
— Receipt of supplementary analysis at a Group and banner
level to better understand customer attraction and
retention rates.
— Review of the risk of cyber threats facing the company
as well as its customers.
Key topics in 2023/24
— Impact of ongoing macroeconomic challenges on
customer sentiment, in particular energy cost and inflation.
— Consumer willingness to undertake DIY, particularly in
France and Poland.
— Product differentiation around sustainability, in particular
energy and water saving.
— Impact of unseasonal weather (particularly in UK
and France) on outdoor home improvement activities
and spend.
— Challenging conditions for trade customers.
Outcomes and impact on Board decision-making
— Continued transformation of our ranges to support
customers to make sustainable choices, for example
through the SHP and Green Star propositions.
— Development of trade strategy to better address the
specific needs of trade customers.
— Board endorsement of Screwfix as a pure-play
online retailer.
— Board endorsement of 2024/25 strategic focus to
transform stores and enrich the customer proposition
and experience (informed by market context and
customer needs).
— Expansion of Screwfix in France to extend customer reach.
— Board endorsement of the marketplace rollout roadmap
and order of launch.
The Board has delegated authority to the Responsible Business
Committee for oversight of our Responsible Business
governance. Each Responsible Business Committee meeting
considers the impact of responsible business issues on our key
stakeholders, including colleagues, customers and communities.
More detail can be found in the Responsible Business Committee report
on pages 78 to 79.
Stakeholder engagement and decision-making continued
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Colleagues
Who they are
Colleagues of Kingfisher plc and its subsidiaries.
Why Kingfisher engages
We believe an effective people strategy and strong culture are essential to the successful delivery
of our core priorities.
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 we engage
Group engagement
— Engagement by the business with colleagues is set out on
pages 14 to 16.
Board engagement
— Regular board and individual director visits to our offices
and stores. In 2023 this included: stores (B&Q UK,
Screwfix France, Brico Dépôt France, Castorama France
and Poland stores), head offices (Screwfix UK, Brico
Dépôt France, and Castorama France and Poland); and
the Screwfix LIVE event.
— Board briefings on matters affecting the workforce and
colleague engagement, including transformation of the
Group technology operating model and teams.
— The Kingfisher Colleague Forum (KCF) was established
as a joint forum of Kingfisher nominated management
representatives and formally elected employee
representatives. A non-executive director attends each
scheduled meeting.
— Direct engagement by our Senior Independent Director
(representative to the KCF), CEO and CPO through
attendance at KCF meetings, and feedback to the Board
twice a year. In 2023, this included a discussion on
executive remuneration.
— Review of progress against key metrics of culture
through both informal and formal mechanisms, including a
culture dashboard and continuous listening tool.
Key topics in 2023/24
— Inflation and wage increases.
— Employee net promoter score (eNPS) of 57, a 10-point
increase in eNPS over three years (and maintaining our
position in the top 5% of retailers globally).
— Tackle non-inclusive behaviours and extend impact
of inclusion.
— Bring to life the sustainability agenda across the Group.
— Gender representation in senior leadership and
management.
— Pay transparency, fairness and equity.
Outcomes and impact on Board decision-making
— Launch of a Group-wide ‘Together. Stronger’ allyship
campaign and monitoring impact of the campaign.
This included allyship training which was made available
to directors.
— Board-level monitoring of colleague sentiment, including
actions to give further insight into colleague sentiment.
— Board endorsement of the new learning and
apprenticeship target.
— Monitoring of opportunities and threats presented by
Generative AI and endorsement of the Group’s approach
in this regard.
— People and culture plans shaped to take account of wider
trends influencing the external retail environment,
increased external scrutiny, and the growing weight of
regulation. They also aim to maintain evolving colleague
expectations.
19Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 way while generating
long-term value. Investors and potential investors need a clear understanding of our business, our
growth potential, our strategy to realise that potential, our performance and the risks and
uncertainties we are managing.
How we engage
Group engagement
— Holding meetings on an ongoing basis; approximately 750
interactions with 450 institutional investors and sell-side
analysts on general business topics.
— Investor and analyst presentations, roadshows,
conferences, environmental, social and governance
(ESG) fireside chats, store tours and ‘teach-in’ events,
attended as appropriate by the CEO, the CFO, the Chair,
the SID and the Responsible Business team.
— Through market disclosures, including results
announcements, trading updates and ad hoc updates.
— Engagement with ESG ratings agencies used by many
investors and debt providers to gauge sustainability
priorities and performance.
Board engagement
— Regular engagement by the CEO, the CFO, and the Chair
with investors covering key financial announcements,
business performance and specific issues.
— Regular feedback to the Board from investor roadshows
and visibility of engagement programme.
— Receipt of reports on investor and financial market
sentiment and expectations.
— Engagement with shareholders at Kingfisher’s 2023 AGM.
Key topics in 2023/24
— Macroeconomic, housing market and consumer
expenditure risks on our business performance.
— Short-term trading conditions in our markets.
— Long-term profitability potential of our French banners.
— Growth initiatives such as Screwfix International, trade,
e-commerce, marketplace and retail media.
— Progress on our Responsible Business agenda.
— Free cash flow delivery and working capital dynamics.
— Capital allocation priorities and dividend policy.
Outcomes and impact on Board decision-making
— Board approval of an interim dividend of 3.80 per share
for the financial year ended 31 January 2024 and a final
dividend of 8.60 per share for the financial year ended
31 January 2023.
— Board approval of a new £300 million share buyback
programme.
— Consistent strong performance across priority ESG
ratings against the retail sector benchmark.
— Prioritisation of ratings most important to our investors
and that reflect on topics material to our business.
Stakeholder engagement and decision-making continued
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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 we engage
Group engagement
— Analysis of data and insights from supplier surveys
conducted on an annual basis.
— Supplier engagement on reducing carbon impact.
— Engagement with suppliers on our Code of Conduct
and Responsible Business strategy.
— Conducting risk-based anti-bribery and corruption
due diligence, and supplier ethical risk assessments and
audits which include factory and production site visits.
— Reporting on our payment practices under the UK
government’s Duty to Report Requirements.
Board engagement
— Consideration of the impact of our climate ambitions
on suppliers, including responsible sourcing and
climate targets.
— Reviews of the outputs from the annual supplier
surveys for our own exclusive brands (OEB) and
branded suppliers.
— Board and Audit Committee updates on supply
chain resilience and exposure in the context of
geopolitical events.
— Annual review of the Modern Slavery Transparency
Statement and progress of implementation of the
Modern Slavery Action Plan across key areas of the
business and supply chain.
Key topics in 2023/24
— Optimising data usage.
— Supply chain and product availability and ‘far’ and
'near-sourcing' considerations.
— Impact of the rapidly changing external landscape on
climate priorities.
— Our approach to human rights.
Outcomes and impact on Board decision-making
— Board endorsement of actions to ensure the Group’s
sourcing and supply chain resilience.
— Board endorsement of marketplace expansion to
continue to improve the supplier proposition, scale data
and AI capabilities.
— Established procurement joint venture in France with
Mr. Bricolage Group, focusing on common national and
international suppliers.
— Board approval of Modern Slavery Transparency
Statement.
21Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 we are committed to having a positive impact
on the lives of our customers, colleagues and communities.
How we engage
Group engagement
— Engagement with this stakeholder category is
predominantly undertaken in pursuit of our Responsible
Business priorities and therefore captured on page 24-27.
— Collaboration with organisations to develop the
inclusivity agenda including the Business Disability
Forum and Stonewall, and to tackle modern slavery
including partnering with the Slave Free Alliance.
— Collaborating with retail peers through the UN Race to Zero,
and the British Retail Consortium’s Climate Action Roadmap.
Board engagement
— Presentations from banners regarding initiatives including
the B&Q Foundation’s Pride campaign supporting LGBTQ+
communities to access safe homes and the Brico Dépôt
Iberia Foundation’s 20
th
anniversary celebrations.
— Board and Responsible Business Committee reviews
of progress of our community programmes and
environmental work.
— Board oversight of Kingfisher’s membership to the
European DIY Retail Association and the Global Home
Improvement Network (EDRA/GHIN), in particular the
task force tackling scope 3 emissions.
— Receipt of updates on community investments made
during 2023/24.
Key topics in 2023/24
— Building colleague momentum around our community
strategies.
— Disaster relief efforts globally in 2023 included the
earthquake in Morocco and products donated locally
to the French Red Cross to help following flooding in
Northern France caused by Storm Daniel.
— Products donated from B&Q stores in Sheffield to the
British Red Cross to help following flooding caused by
Storm Babet in the UK.
— Fundraising initiatives to support LGBTQ+ charities.
Outcomes and impact on Board decision-making
— Colleagues influenced the Group’s decision to support
emergency relief efforts following the earthquake in
Morocco in September 2023.
— Continuing to exceed the communities programme
target to reach over 2 million people in greatest need by
2025 (target met in 2022/23).
— Board monitoring of community investment and
endorsement of approach to communities priorities
and focus in 2024/25.
— Increased colleague engagement scores on our
community work.
Stakeholder engagement and decision-making continued
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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 we engage
Group engagement
— Direct engagement with the governments and regulators
in each of Kingfisher’s key markets as well as with the EU.
— Engagement with retail trade associations, including the
British Retail Consortium, Eurocommerce, the European
DIY Retail Association/Global Home Improvement
Network, the French DIY Retail Association, and business
associations such as AFEP (France) and Lewiatan (Poland).
— Attendance at government meetings and events,
responding to consultations, and participation in
parliamentary inquiries.
— Regular engagement 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.
Board engagement
— Updates on Board and company engagement with
regulators, government stakeholders, and political
representatives both directly and via industry
associations and other partners.
— Receipt of twice-yearly updates on material political
issues impacting Kingfisher across its geographies,
including monitoring actions and next steps.
— Ongoing monitoring of macroeconomic and geopolitical
forces on performance.
— Updates on key governance and regulatory changes that
may impact the company.
— Respond to policy consultations and formal information
requests.
Key topics in 2023/24
— UK audit and corporate governance reform consultations.
— UK trade skills gap.
— Increased ESG reporting rules (e.g. CSRD, ISSB IFRS,
Climate Transition Plan) and regulatory requirements (e.g.
EUDR, CBAM).
— Supporting UK business rates relief and energy
efficiency programmes and campaigns.
— Impact of EU directives and regulation on late payments
and pay transparency.
Outcomes and impact on Board decision-making
— Board endorsement of Kingfisher’s approach to prepare for
and deliver against upcoming ESG reporting disclosures.
— Progress made on issues, including:
— trade skill shortage in the UK and measures to support
small- and medium-sized enterprises;
— payments for Extended Producer Responsibility in the
UK delayed until 2025;
— further government measures in the UK for future new
energy efficiency programmes; and
— legislative procedures on changes to the EU Late
Payment Regulation slowing until after the European
elections.
23Kingfisher 2023/24 Annual Report and Accounts
Other Information
Integrating responsible business into
everydayoperations
Kingfisher has been prioritising responsible business practices
for over three decades. Building on our strong environmental,
social and governance (ESG) credentials, and as part of our
‘Powered by Kingfisher’ strategy, we are working to integrate
responsible business into all aspects of our business.
Responsible Business governance
Our Responsible Business Committee (RBC) supports and
oversees the delivery of the Responsible Business strategy,
ensuring that it is robust, transparent, accountable, and
integrated into our governance. This includes monitoring
performance against the Responsible Business priorities and
providing frequent support and advice to the Group Executive
and Board on all Responsible Business matters. The Chair of the
RBC reports on the Committee's activities to the Board at least
twice a year.
Further governance of climate-related risks and opportunities is
detailed on page 28 in our response to the Task Force on
Climate-related Financial Disclosures (TCFD).
See page 78 for the Responsible Business Committee report.
Our four Responsible Business priorities
We have set out four priority areas for Responsible Business.
These focus on where we are committed to delivering positive
impact for our colleagues, our customers and their homes, our
communities, and our planet. Now into the fourth year of
delivery, we continue to make progress across each priority.
We will publish full details of this year’s progress in our
Responsible Business Report in June 2024.
See page 25 for details on our progress against the targets for our four
key priorities.
Responsible Business
1 2 3 4
Colleagues
Our commitment
We will be a more
inclusive company by
breaking down barriers
to employment and
progression, and by
building skills for life.
We will help tackle
climate change
and continue our
journey to become
Forest Positive.
We will help make
greener, healthier
homes affordable.
We will fight to
fix bad housing.
Our commitment
We will help tackle
climate change by
reducing carbon
emissions from our
business, products, and
supply chains. We will
work towards becoming
Forest Positive through
our commitment to
responsible sourcing
and investing in forest
projects.
Our commitment
We will help millions
of customers have a
greener, healthier home
– one that is energy
efficient, comfortable,
uses fewer resources
and is affordable to run
and maintain.
Our commitment
We will donate our
products, expertise,
and time to help people
whose housing needs
are greatest in the
communities we serve.
Planet Customers Communities
We will be a more
inclusive company.
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Colleagues
Our targets
— Improve gender balance to 35% women in senior leadership
and 40% women in management by FY 25/26.
— More than 20,000 colleagues will have completed an
apprenticeship, traineeship or formal qualification by FY 30/31.
Our progress
— 28.6% of senior leaders and 39.6% of managers are women,
compared with 25.8% and 38.9% respectively last year.
— 36.1% of our Group Executive and their direct reports are
women, compared with 33.3% last year.
— Exceeded our target of providing five million hours of skills
for life learning by FY 25/26 ahead of schedule last year and
set a new target that captures the full breadth of learning and
development and career progression.
— 5,017 apprenticeships, traineeships and formal qualifications
were completed across the Group during the year putting us
on track to reach our target.
— Established 17 inclusion and diversity (I&D) affinity networks
(linked to Kingfisher’s I&D Advisory Forum) across the Group.
— Launched a Group-wide allyship campaign communicating a
clear and standardised set of inclusive behaviours expected
from all colleagues.
Engagement and inclusivity are part of our People and Culture
Plan discussed on pages 14 to 16.
Planet
Our targets
— 100% responsibly sourced wood and paper for our products
and catalogues by FY 25/26.
— Become Forest Positive by FY 25/26.
— Deliver our science-based targets for FY 25/26 to reduce
scope 1 and 2 emissions by 37.8% in absolute terms and
scope 3 by 40% per £m of turnover (compared with FY 16/17
and FY 17/18 respectively).
— Reach net zero emissions for our operations (scope 1 and 2)
by the end of FY 40/41.
Our progress
— 96.6% of the wood and paper used in our products was
responsibly sourced (FY 22/23: 94.5%) and 99.9% of
catalogue paper.
— Continued to invest in six forest projects in key tropical sourcing
regions as a founding member of the Rainforest Alliance Forest
Allies. These cover some 190,000 hectares of community
managed forests and contribute towards the protection of
more than 2,500,000 hectares of protected areas.
— Established local partnerships to restore, create and protect
native woodland and forests in the UK, France and Poland.
— Delivered progress against our science-based targets and
have reduced operational emissions (scope 1 and 2) by 62.0%
since FY 16/17 exceeding our FY 25/26 reduction target.
— Reduced intensity of scope 3 emissions from the supply
chain and customer use of products by 41.6% against a FY
17/18 base year, exceeding our 2025 target. The development
of a scope 3 net zero target is underway.
— Partnered with other home improvement retailers through the
EDRA/GHIN
1
global trade bodies to establish a collaborative
task force to help the sector reduce its scope 3 emissions.
Customers
Our targets
— 60% of Group sales to be from our Sustainable Home
Products (SHP) that help create greener, healthier homes,
including 70% of sales for our own exclusive brand (OEB)
products by FY 25/26.
Our progress
— 49.4% of total Group sales came from SHP (FY 22/23: 46.8%).
— Energy-saving and energy-efficient and water-saving
products amounted to 10.1% of SHP sales.
— SHP now accounts for 60.1% of OEB sales (FY 22/23: 56.4%).
— Introduced our Green Star mark online and in store to make it
easier for customers to identify and purchase products with
a lower impact on the environment (see page 26).
— Improved sustainability performance across several ranges,
including the launch of MamaTerra, a new range of natural
gardening products.
Communities
Our targets
— Help more than two million people whose housing needs are
greatest by FY 25/26.
Our progress
— Surpassed our FY 25/26 target ahead of schedule, through
strong performance and delivery from our banner
foundations. We will continue to track performance
against this indicator.
— Reached almost 1.2 million people this year through
community projects, bringing our total to 3.2 million people
helped since FY 16/17.
— Invested £6.1 million in our communities with an additional
£2.4 million raised by our colleagues and customers.
— Supported disaster relief efforts this year in Turkey, Syria,
Morocco, Libya, France and the UK donating over £300,000.
— Continued our partnerships with national charities, Shelter,
Childhood Trust and Macmillan Cancer Support in the UK,
Fondation Abbé Pierre and Compagnons Bâtisseurs in
France, and Habitat for Humanity in Romania.
1. European DIY Retail Association/The Global Home Improvement Network.
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Other Information
Responsible Business continued
Our Responsible Business fundamentals
Our priorities are underpinned by our commitment to our
Responsible Business fundamentals. These are the practices to
which we adhere 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 with key stakeholders 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.
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 at www.kingfisher.com/Modern-Slavery
Health and safety
We believe every colleague is entitled to a safe working
environment. Our Group Head of Health and Safety oversees
our approach and is supported by senior management safety
committees in each banner and a network of safety professionals.
Each banner has its own team, policies and procedures relating
to health and safety. Health and safety leads at banner and
Group function level, meet and communicate regularly to share
data, strategies and best practice. Each quarter, the Group
Executive reviews performance against our key health and
safety performance indicators, and the Board do the same twice
a year. We also publish our health and performance data annually
in our Responsible Business Report.
Helping customers make more sustainable
choices
As part of our target to generate 60% of our sales from
SHP, we have made it easier for customers to think
about the planet when they are shopping with Kingfisher.
Launched in autumn 2023, our Green Star mark
signposts customers, in store and online, to products
that have a reduced impact on the environment.
Customers can access clear and comprehensive
information factsheets for further details on why each
product has received the mark.
Green Star products have a lower environmental impact
because of what they are, what they do, or how they
have been made. They are either made from reduced
impact material or processes, or they have been
designed to help people live with a reduced impact.
The products are reviewed internally and then externally
validated according to a set of criteria including ‘Saving
energy at home’, ‘Made using lower carbon
manufacturing’ and ‘Extending product lifecycles’. Each
criterion has been summarised in factsheets which are
available online and in store, enabling our customers to
make more informed decisions.
This year we implemented a new Health & Safety software to
improve how we record and report accidents, incidents and
near-miss incidents across the Group.
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.
We strictly comply with all applicable regulations related to
chemicals and where we have identified other chemicals that we
consider are not sustainable, we are starting to phase these out
of our products. For example, we have committed to remove
the use of Chrome VI (hexavalent chromium) in chrome plating
from our OEB product ranges by the end of 2024. In FY 23/24
we strengthened our chemical strategy to include a chemical
criterion for SHP qualification starting with adhesives and
sealants. This is to ensure our chemical strategy going forward
aligns with significant regulatory changes expected in the EU in
the coming years.
A full update and performance data will be published in our
Responsible Business Report in June 2024.
26 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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 of Conduct 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 of
Conduct 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 82 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 adhere to our
Code of Conduct and ethical requirements.
Our approach to data protection and cyber security is explained
in the risk section on pages 60 to 64.
Environmental, social and governance disclosure
We disclose our ESG progress and performance through several
external benchmarks including CDP (formerly the Carbon
Disclosure Project) and the Workforce Disclosure Initiative (WDI).
We align our reporting to the Global Reporting Initiative (GRI), Task
Force on Climate-related Financial Disclosures (TCFD) (see page
28) and the Sustainability Accounting Standards Board (SASB)
standards for Multiline and Speciality Retailers and Distributors.
Our disclosures also meet the Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022 amended
sections 414C, 414CA, and 414CB of the Companies Act 2006.
Our Non-Financial and Sustainability Information statement on
page 47 includes further details of Kingfisher's ESG disclosures.
We continue to monitor upcoming regulatory and reporting
requirements to evaluate expectations and impacts for Kingfisher,
and prepare accordingly.
This year we launched our Responsible Business Databook which
allows anyone to access our historic and current performance
across our Responsible Business priorities.
For more information visit www.kingfisher.com/responsiblebusiness
27Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 statement on page 68.
Our Board of Directors is our highest governing body and
assesses the management of principal risks, including climate
change, and reviews our Responsible Business key performance
indicators (KPIs) and our external climate change targets on a
quarterly basis. The Board reviews our Responsible Business
long-term plan twice a year, which in FY 23/24 included our
priority actions for delivering on our climate transition plan and
scope 1, 2 and 3 science-based targets across the business. The
Board also reviews and approves our annual Responsible
Business Report which includes detail on our progress to date
for climate-related metrics and targets.
Our CEO is accountable for overseeing the delivery of our
energy and climate change commitments across the group, with
climate-related responsibilities sitting within various Board and
management committees as follows:
— 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 and
transition plans proposed by management. This includes our
scope 1 and 2 net zero commitment and investment plan,
and scope 3 KPI planning updates.
— Our Responsible Business Committee provides frequent
support and advice to the Group Executive and Board on all
matters relating to responsible business practices (including
climate change). The Responsible Business Committee met
three times in 2023 and their report is on page 78.
— Our Group Climate Committee, chaired by our Chief
Executive Officer, meets quarterly with relevant management
to monitor the Company’s approach to meeting its climate
commitments and assessing climate-related risks and
opportunities. It has oversight of the Company’s approach to
developing and delivering its net zero roadmap and related
supporting targets. It provides an update to the Group
Executive on key decisions and actions. In 2023, this included
updates on our current climate commitments and plans going
forward across all scopes.
— 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
included in the Committee’s remit if investment needed
exceeds the required threshold levels for review. In 2023
this included approving costs for the installation of solar PV
for trial sites in Brico Dépôt Romania.
— Our Audit Committee receives updates from management
on Kingfisher’s compliance with changing sustainability-
related reporting requirements, including our TCFD
disclosures. In the current year, an ESG working group which
monitors climate-related disclosures has been established,
comprising key representatives from internal controls and
internal audit. Internal audit will also undertake audits of the
ESG landscape as part of its annual plan.
Additionally, banner Boards consider their responsible business
strategies and climate programmes. They are responsible for
implementing the energy-related capital investments approved
by the Group Investment Committee, and for delivering
progress against our scope 1 and 2 emissions reduction targets.
In FY 23/24 a banner dashboard was implemented for banners to
report on their net zero roadmap development (across scope 1,
2 and 3) and progress on target delivery. The dashboard is
reported on a quarterly basis to the Group Climate Committee
and Group Executive.
Information on how our Board engages with stakeholders,
including in relation to climate change, is included in our
stakeholder engagement section on page 17.
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
external and internal reporting and communication on
climate-related matters to the Board and Board
committees. 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.
— Within the Group Offer & Sourcing function, a Sustainability
team is responsible for driving our Sustainable Home
Products (SHPs) strategy and ensuring our product
sustainability requirements are embedded into our own
exclusive brand (OEB) product ranges, and collaborating
with OEB suppliers to reduce their own emissions. The
sustainability team reports its progress on actions, including
progress on scope 3 emissions reduction planning and
supplier engagement, to the Group Climate Committee.
It also runs a monthly Sustainability Forum with banner
sustainability directors and representatives to help co-
ordinate sustainability activity across the Group, including
scope 3 product-related emissions reductions.
— Each banner is responsible for delivering scope 1 and 2
emissions reductions, in line with the contributions of each
banner identified under the Group-wide scope 1 and 2
science-based targets. They are also responsible for
developing scope 3 emission reduction plans and reporting
these back on a quarterly basis using the aforementioned
banner net zero dashboards. Banners have their own
Responsible Business committees and forums with relevant
director representatives that are used to update and grant
approval where required on banner climate transition plans.
Our response to the Task Force on
Climate-related Financial Disclosures
28 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
— To help ensure that climate governance is integrated and
aligned across the organisation, we have established an
internal Climate Disclosure Steering Group (Steering Group)
and Group-wide Climate Transition Plan Working Group.
— The Climate Disclosure Steering Group is chaired by our
Director of Responsible Business. It meets six times a year
and includes participation from different group function
directors and representatives (including finance, internal
audit and risk, responsible business, and the banners). The
Steering Group provides guidance on transition planning
and reporting, and helps to ensure that these activities are
fully integrated into Kingfisher’s strategic and financial
planning processes. Integration actions are tracked via an
actions log whereby Steering Group directors need to
report back on progress through the Steering Group
meetings. The Steering Group also inputs on relevant
updates taken to the Group Climate Committee.
— The Climate Transition Plan Working Group meets on
a fortnightly basis and brings together the climate leads
from our banners and relevant group functions (such as
finance, property, logistics and risk). The objective of the
working group is to act as a central point of co-ordination
for the development of Kingfisher’s climate transition plan,
ensuring consistency in transition plan development and
risk management across all our banners.
— The Logistics Net Zero Forum is chaired by the Group
Logistics Director and meets quarterly with banner logistics
directors and representatives to share best practice,
discuss new technology and share carbon reduction
planning and activity across logistics.
— The Energy Forum is chaired by the Group Head of Energy
and meets quarterly with banner energy and property
managers to share best practice across banners, review net
zero scope 1 and 2 activity plans and report on progress
against targets.
Enhancing our governance of climate-related risks and
opportunities
We continue to monitor where further knowledge and expertise
on climate change-related aspects is required across the Group.
We have reviewed competencies at the Board level and have
concluded that the Board consists of members who bring in the
necessary climate-related expertise. This is achieved through
the Chair of Kingfisher’s Responsible Business Committee also
being on the Board, as well as our CEO who also chairs the
Group Climate Committee and is engaged with the EDRA GHIN
scope 3 taskforce, and thus remains up to date on all climate-
related activities across the Group. We have also worked on
strengthening our banner teams’ understanding of climate
change through the formation of the Climate Transition Plan
Working Group and the provision of regular climate-related
updates to the banner Responsible Business forums.
The Kingfisher plc Board
Audit Committee
Our Board
committees
Operational
committees
Responsible Business Committee
Group Climate Committee
Climate
Disclosure
Steering
Group
Logistics
Net Zero
Forum
Energy
Forum
Banner
Responsible
Business
forums
Group
Sustainability
Forum
Climate Transition Plan Working Group
Group Executive
Working Group representation is made up of members from the above forums
Implementation
and compliance
Strategic
oversight
Climate governance structure
29Kingfisher 2023/24 Annual Report and Accounts
Other Information
Strategy
Our strategy for identifying climate-related risks and opportunities is informed by our risk management processes (see risk
management on page 59), of which our use of climate-related scenario modelling and 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. For example, all our banners are required to consider climate transition plan costs as part of this year’s financial long-term
planning process. Climate change transition planning was also reviewed as part of the Group strategic long-term planning process for
Responsible Business.
Our climate-related risks and opportunities [TCFD Strategy (a, b), Metrics and Targets (a)]
We have defined risk time horizons of near-term (0-3 years), medium-term (3-10 years) and long-term (10+ years). This is to reflect
the long-term nature of climate-related risks and we currently model risks to 10 years through our climate-related scenario modelling
outlined below.
The timelines considered and rationale for selecting them have been provided in the table below.
The list of climate-related risks and opportunities identified as potentially arising in each time-horizon that could have a material
impact on the business have been further detailed in table 1.
Time horizon Description Rationale for selection
Near-term 0-3 years
(2023-2026)
Our near-term risk horizons consider the chance of events creating risk exposure over the next
three years which is consistent with the Group’s strategic planning period and the period over
which the principal risks are considered.
Medium-term 3-10 years
(2026–2033)
This time horizon was selected to capture emerging transition risks and opportunities such as
carbon taxes and emerging regulations in the geographies we operate in.
Long-term 10+ years
(2033 onwards)
Our long-term horizon is influenced by our strategies and targets related to climate change
such as our 2040 Scope 1 and 2 net zero strategy and broader Scope 3 roadmap development.
As many climate-related physical and transition risks are likely to materialise over a longer term
than usual business planning related risks, selecting this time horizon enables us to consider and
discuss the potential climate risks and opportunities relevant for us (and capturing the range of
uncertainties related to such risks in the long term), while also aligning with relevant long-term
global standards and targets. This also covers the long-term investment needed for our climate
transition planning.
To guide our disclosure of climate-related risks and opportunities, we define materiality based on gross risk severity levels according
to the results of our scenario analysis (see table 2 on page 35). Table 1 on page 31 describes the key climate-related risks and
opportunities recognised as having an impact on our business, identified through our risk management and scenario analysis process.
Our response to the Task Force on Climate-related Financial Disclosures continued
30 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Table 1: List of climate-risks and opportunities identified over short-, medium- and long-term and impacts on business
strategy and financial planning [TCFD Strategy (a, b)]
1
Potential financial implication
Material climate-related risk or
opportunity (including geography
and business areas impacted) Time horizon Risks Opportunities
Transition:
Customer preference
Elements impacted:
Products and services, supply
chain mitigation activities,
investment in R&D.
Geography and business
areas impacted:
Global product offering with
actions to realise opportunities
in each market.
Near to medium-term
— Consumers’ purchasing
behaviours shifting towards
purchasing more sustainable
products or not buying
unsustainable products would
lower revenues from products
deemed to be unsustainable.
— Opportunities to increase sales of SHP
that enable customers to lower the
environmental impact of their homes.
— Competitive advantage and higher
revenue if consumers perceive the
brand to be more sustainable than peers.
Transition:
Liability
Elements impacted:
Increased costs and
reputational damage.
Geography and business
areas impacted:
Group functions and banners.
Near-to-medium term
— The business may receive legal
challenges or face investigations
on green claims from third parties
if perceived as overstating the
sustainable or’green’ nature of
products/services or its
commitment to climatechange,
thus increasing costs required to
manage or control such damage.
— Increased reputational risks and
litigation costs if actions are
taken against the company by
stakeholders regarding any
negative climate-related impacts
on the environment and society
caused by the business
operations.
— Increased costs in case of any
litigation brought against any
directorsand officers for failing
to account for climaterisks or
failing to deliver on
climatecommitments.
— Show market leadership on emissions
and climate performance to mitigate
liability risks.
Transition:
Policy (carbon pricing)
Elements impacted:
Products and services, supply
chain mitigation activities,
access to capital.
Geography and business
areas impacted:
Global supply chains, with
actions required to mitigate
risks in each market.
Near-to-medium term
— Increased costs of raw materials
as suppliers may potentially pass
through carbon costs of raw
materials-related emissions
(upstream scope 3 emissions) to
the buyer.
— Potential increased operational
costs (scope 1 and 2) due to
carbon costs of direct emissions.
— Potential revenue loss as
consumers may incur greater
costs for the products and thus
overall demand reduces.
— Carbon pricing encourages suppliers to
decarbonise and justifies investment in
own decarbonisation efforts.
— It may also encourage consumers
towards purchasing more sustainable
products.
Transition:
Reputation
Elements impacted:
Increased costs and
reputational damage.
Geography and business
areas impacted:
Group functions and banners.
Near-to-medium term
— Reduced revenue if consumers
move to our competitors as they
perceive the business to be less
sustainable than its peers.
— Competitive advantage and higher
revenue if consumers perceive the
business to be more sustainable than
peers and indicate increased trust in the
business, thus increased overall
reputation of the business in the market.
1. Our strategic response to the potential material and financial impacts, and some of the mitigation actions to build our business’ resilience against these
implications have been provided in table 2: Scenario analysis results on page 35.
31Kingfisher 2023/24 Annual Report and Accounts
Other Information
Potential financial implication
Material climate-related risk or
opportunity (including geography
and business areas impacted) Time horizon Risks Opportunities
Physical:
Facilities disruption
Elements impacted:
Operations
Geography and business
areas impacted:
Global retail and distribution
operations.
Medium to long-term
— Increase in average global
temperatures leading 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).Operations
may be disrupted and facilities
may be damaged due to adverse
weather (increased precipitation
causing increased flooding etc.),
resulting in higher insurance or
repair costs, and lower revenue
from productivity losses.
— At some sites, due to a reduction in the
likelihood of some hazard events
occurring (e.g. riverine flood, flash flood,
water stress, windstorm) owing to a
change in weather patterns, there could
be a risk reduction/insurance saving.
Physical:
Raw material supply
Elements impacted:
Products and services, supply
chain adaption.
Geography and business
areas impacted:
Global wood supply chain.
Medium to long-term
— 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.
— Growing conditions may improve in
some areas, increasing yields and
reducing raw material sourcing costs.
We included three additional transition risks – i) Consumer preference risk ii) Liability risk and iii) Reputational risk in our scenario
modelling this year, as these were identified as material risks by the business, given the evolving sustainability landscape and
corresponding evolving stakeholder sentiment.
The risks indicated in the table above include the key risks that were modelled as part of our scenario modelling approach (scenario
modelling results detailed on page 35 in table 2). However, additionally we also monitor energy and fuel costs related risks and
implications for our business (i.e. increased risk of energy and fuel prices due to regulatory changes as well as increased energy
demand risk due to changing weather conditions). We aim to reduce the impact of this risk through implementing measures that
improve efficiency and reduce carbon intensity of our energy and fuel consumption across the Group, e.g. roll-out of LED lighting and
building energy management systems across our estate (further details on other such measures have been provided in the section
below). We also aim to reduce our overall energy and carbon emissions in line with our science-based targets (further details on our
performance against these targets and metrics for the current year have been provided on page 40). We will also start to review the
risk of market disruption caused by extreme weather conditions impacting product demand. This may lead to a risk reduction or
opportunity where summer products are purchased more during heatwaves or increase in risk as demand for winter products
reduces when there are less freeze events.
Our response to the Task Force on Climate-related Financial Disclosures continued
32 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Investing in zero-carbon electricity
As of FY 22/23, we purchase electricity from zero-
carbon and renewable sources, supported by renewable
energy certificates for all our markets.
To further support our net zero transition, we are also
investing in generating onsite renewable energy. We
installed solar PV panels in over 30 of our stores in Poland
in 2023 in addition to the existing installations across 29
stores, offices, and distribution centres in the UK.
We also have biomass boilers that supply energy to two
distribution centres and one head office, helping us
achieve an overall onsite renewable energy generation
capacity of 11.5mn kWh per year.
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).
Additional impacts of climate-related risks and
opportunities on our strategy and financial planning [TCFD
Strategy (b)]:
Central to our approach to managing climate-related risks and
opportunities is our climate transition plan, along with our
Responsible Business priorities and our ‘Powered by Kingfisher’
strategy. These together highlight how climate change-related
impacts are integrated across our strategic and business thinking.
Our commercial strategy includes responsible business
practices as a key priority area, which further includes climate
change and sustainable home product sales as key focus areas
within the agenda. We therefore ensure that we continue
monitoring the external environment for risks and opportunities
that require further resilience building and adaptation measures.
Our transition plan is centred on our science-based emissions
reduction targets (see Metrics and targets section page 40), as
part of which we have committed to achieving net zero scope 1
and 2 emissions by the end of 2040/41, 10 years ahead of the UK
Government’s 2050 target. We are also in the process of
reviewing a net zero target for scope 3 emissions.
We increasingly consider the implications of climate-related risks
in our financial planning processes. For example, climate capital
allocation budgets (e.g. decarbonisation budgets to deliver on
zero-carbon energy programmes shown in the case study
opposite to support our scope 1 and 2 targets) are reviewed
by banners as part of our annual strategic planning process.
Some of our management measures include investments
in low-carbon energy technologies, potential revenue
considerations from our Sustainable Home Products (SHPs),
and inclusion of climate-related targets into our executive
remuneration (see Metrics and targets section for details
on page 40).
We also have an ongoing £550 million three-year revolving credit
facility (since 2021/22) with a group of our relationship banks.
The specific targets included within the facility consist of delivering
our near-term scope 1 and 2 science-based targets for FY
25/26, which will enable us to access lower interest rates.
Our management approach with regards to how we continue to
build and maintain our strategic resilience through ensuring
holistic governance has been detailed further in the Governance
section on page 28.
Our approach to climate scenario analysis [TCFD Strategy
(a, c)]
We continue to expand our capabilities and understanding of
climate-related risks and opportunities that impact or can
potentially impact our business. We do this through a third-party
facilitated scenario modelling and analysis, which has been an
important tool to assess the Group’s strategic and financial
resilience to a range of alternative climate futures.
Our scenario modelling capabilities allow us to better understand
the exposure of our business to various climate-related risks
1
and impacts across the value chain. This enables us to identify
appropriate mitigation measures and action steps and also
regularly review and assess the resilience of our business and
strategy against these risks and overall net zero plans. We use a
‘digital twin’ approach for our scenario modelling, which allows us
to map the key areas of our value chain and stress test our
business under different warming scenarios.
Our scenario modelling approach considers climate-related risks
globally and the results indicated in the table on page 35 are
presented as global values. We assessed operational risks to our
value chain at a country-geographic level, aligned to our key
markets. We determined that some regions were more exposed
to physical phenomena from heatwaves and flooding, and
certain regions were more exposed to transition risks due to
having more rigorous public policies covering carbon emissions.
However, these risks did not give rise to material impacts for our
business currently (a materiality definition is provided in the table
2 on page 35).
33Kingfisher 2023/24 Annual Report and Accounts
Other Information
We continue to monitor such risks (e.g. key facility operational risks) on an ongoing basis to identify any mitigation actions required in
the future (see scenario results table 2 for additional details).
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.
For FY 23/24, we modelled nine risks (we are disclosing six of the nine risks that indicate the most material impact for our business)
for three climate-warming scenario pathways as explained below.
Global temperature increase
1
Scenario description
1.5
o
C Urgent global policy response delivering net zero global emissions by 2050 and in line with Paris Agreement
Ambition. Leads to rapid shifts in energy generation, consumer behaviours and technological innovation.
Physical risks increases are limited but transition risks are high.
2.5
o
C Implementation of stated climate policies and commitments without further action beyond this. Medium levels
of physical and transition risks in the short term, with increasing physical risks over time (also considered as an
intermediate scenario as per IPCC Sixth Assessment (AR6) report).
>4
o
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.
1. Average global surface temperature increase above pre-industrial levels by 2100.
All risks indicated are based on the assumption that the business remains static and no mitigation actions are taken (i.e. they represent
gross risks only). We have used a discounted cash flow (DCF) percentage to quantify costs of risks in our scenario modelling
approach and we have modelled the impacts on a cumulative DCF associated with the six most material risks for our business over a
three-year period (as this timeframe aligns with the Group’s strategic planning period and the period over which the principal risks are
considered). Recognising the long-term nature of climate-related risk we have also modelled five and 10 year periods to review any
changes in risk severity over time. The risks considered in our scenario analysis are modelled independently, reflecting the
complexity and uncertainty associated with measuring the interconnectivity of risks.
Impact on cumulative DCF is used as a proxy for resilience of our financial and strategic position. The impacts have been rated as low,
medium or high to reflect the relative financial materiality of each risk under each scenario. The impact thresholds have been
determined following internal analysis and an external benchmarking to ensure that we are consistent with industry norms in our
approach to setting materiality thresholds.
The results of our analysis are reported to our Climate Disclosure Steering Group and Group Climate Committee to ensure cross-
functional and executive-level decision-making on the management of climate-related risks and opportunities. Further information
around the governance on climate-related risks and opportunities has been provided in the TCFD governance section on page 28.
Scenario analysis results [TCFD Strategy (c)]
The financial impacts identified in the table 2 on page 35 reflect the estimated gross incremental impact (i.e. before mitigation actions
as explained above) from climate change on the Group’s discounted cash flows (DCF) over the next three, five and 10 years. This
allows comparison of different risks, whether physical or transition, within a standard framework. A qualitative strategic response and
mitigation actions implemented across the business for each risk have been included in the scenario results on page 35. These
measures are intended to build operational, regulatory and supply chain resilience of our business to climate change impacts.
Our response to the Task Force on Climate-related Financial Disclosures continued
34 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Table 2: Results of scenario analysis
Key
Potential materiality impact on Kingfisher’s cumulative DCF, assuming no mitigating actions are taken.
Low Medium High
<1% of DCF 1%-5% of DCF >5% of DCF
Climate-related
risk modelled Key modelling assumptions
Impact on cumulative DCF
(see key above for materiality impact)
Implications for resilience and
strategic response/ mitigation actions
1. Consumer
preference risk
i Assumes the 2022/23 product
mix and markets remain static.
ii Products and services are
assigned product scores which
applies a ranking to Kingfisher’s
products in terms of how
sustainable they are perceived
to be by consumers.
iii The model assumes no
mitigation actions are taken
and excludes the potential
opportunity of sustainable
products’ growth offsetting
the lost sales of less sustainable
products.
1.5
o
C 2.5
o
C >4
o
C Potential financial implications
— Consumers prefer purchasing sustainable
products which could lower revenues
from unsustainable products.
Strategic response/mitigation actions
— The commercial opportunities and risks
from the transition towards net zero
continue to shape our product range and
business strategy.
— We have established a headline target to
achieve 60% of Group sales from SHP by
the end of FY 25/26 (and 70% from our
OEB products). See page 43
— for our progress against these targets.
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.
— We continue to run schemes such as the
B&Q Energy Saving Service in the UK
(launched in 2022) and other energy
efficiency services in our French and
Polish banners, and have expanded our
energy saving product ranges across our
banners to support customers in
reducing household energy costs and
emissions.
3-year
impact
High Medium Low
5-year
impact
High Medium Medium
10-year
impact
High High Medium
35
Kingfisher 2023/24 Annual Report and Accounts
Other Information
Climate-related
risk modelled Key modelling assumptions
Impact on cumulative DCF
(see key above for materiality impact)
Implications for resilience and
strategic response/ mitigation actions
2. Liability risk i Likelihood of climate-related
litigation case being brought
against Kingfisher is based on
its market share, location and
emissions intensity, and the
chances that the defendant
wins, loses or settles.
ii Addresses the three most
prominent types of climate
litigation to date: Greenwashing,
Directors & Officers Liability,
and Public Nuisance & Pollution.
iii Legal costs are assumed to
scale with annual revenues.
1.5
o
C 2.5
o
C >4
o
C Potential financial implications
— Increased costs if the business were
sued by third parties for alleged breaches
of green claims codes.
— Increased reputational risks and litigation
costs if complaints were raised
againstcompanies for their polluting
impacton the climate and any
publicimpacts that were faced by
society as a result.
— Increased costs in case of any litigation
brought against directorsand officers for:
— failing to account for climaterisks;
— misleading stakeholders
withinaccurate or incomplete
riskdisclosures; and
— failing to deliver on
climatecommitments.
Strategic response/mitigation actions
— A key pillar of our Responsible Business
strategy is our commitment to reducing
our emissions in line with the UN goal to
limit global warming to 1.5
o
C (see metrics
and targets). We are working on updating
our transition plan and continuing to
disclose our progress against plan
(including through voluntary disclosure
such as CDP).
3-year
impact
Medium Medium Medium
5-year
impact
Medium Medium Medium
10-year
impact
High Medium High
3. Policy risk:
Carbon pricing
i Assume the 2022/23 emissions
mix and markets remains static
over the reporting period with
emissions growth rate in line with
FY 23/24 target growth rates.
ii Model focuses on the
compliance carbon market (i.e.
carbon taxes and emissions
trading systems (ETS)). No
border adjustments (e.g. CBAM)
or specific policies or regulation
are considered currently.
1
iii Scope 1, 2 and upstream scope
3 have been considered. For
these emissions, the industry
carbon price by operating
country has been applied.
Scope 3 downstream emissions
(which relate largely to
customer product use) have not
been included due to
incomplete data to assess
carbon pricing on this emission
type and the impact this would
have on customer purchasing.
We will be reviewing these
assumptions annually.
iv In a 4
o
C scenario over three,
five and 10 years there will be
limited policy implementation
and, therefore, no change to
risk impact.
1.5
o
C 2.5
o
C >4
o
C Potential financial implications
— Higher costs of raw materials (upstream
scope 3 emissions) as suppliers pass
through carbon costs.
— Higher operational costs (scope 1 and 2)
from carbon costs of direct emissions.
Strategic response/mitigation actions
— A key element of our strategic response
to reduce and/or manage any carbon
pricing-related policy risks is through
continued monitoring of regulatory and
market developments that further inform
our Responsible Business strategy and
financial planning.
— 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.
For example, through commitment to
generating 60% of Group sales from SHP
by the end of FY 25/26, a co-benefit will
be 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 our products
(e.g. through providing more energy
efficient products).
— 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
o
C (see metrics
and targets).
We would expect policy risk to increase if
we included downstream scope 3 elements.
Further analysis will be needed in FY 24/25
to assess the impact of this risk.
3-year
impact
Low Low No
impact
5-year
impact
Medium Low No
impact
10-year
impact
Medium Medium No
impact
1. The global average carbon prices reached by the end of our three-year time horizon are:
1.5
o
C= USD 83/tCO
2
e
2.5
o
C = USD 29/tCO
2
e
4
o
C = USD 0/tCO
2
e
Our response to the Task Force on Climate-related Financial Disclosures continued
Key
Low Medium High
<1% of DCF 1%-5% of DCF >5% of DCF
36
Kingfisher 2023/24 Annual Report and Accounts
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Climate-related
risk modelled Key modelling assumptions
Impact on cumulative DCF
(see key above for materiality impact)
Implications for resilience and
strategic response/ mitigation actions
4. Reputation risk i Quantifies the uptake of climate
activism against sectors
andindividualcompanies due to
their perceived inaction on
climate change.
ii Likelihood of reputational
damage due to activismagainst
Kingfisher is basedon:
— Emissions intensity (for all
emission scopes) compared
with industry peers.
— Regional selling locations (UK
and Europe).
— Qualitative assessment of
Kingfisher’s sustainability
reporting and credentials.
1.5
o
C 2.5
o
C >4
o
C Potential financial implications
— Lower revenue if consumers boycott
the business as they perceive it to be
less sustainable than its peers.
— Risk will tend to be higher for the more
extreme temperature scenarios.
Strategic response/mitigation actions
— 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
o
C (see
metrics and targets). We are working on
updating our transition plan and
continuing to disclose our progress
against plan (including through voluntary
disclosure such as CDP).
3-year
impact
Low Low Low
5-year
impact
Medium Low Medium
10-year
impact
Medium Medium Medium
5. Key facility:
Operational risk
i Kingfisher owned and leased
properties are included in the
analysis, supplier facilities are
excluded.
ii Any adaption measures such as
flood protection across our
estate have not been
accounted for.
iii Assumes that damage to
facilities and operational
disruption will be covered by
insurance.
1.5
o
C 2.5
o
C >4
o
C Potential financial implications
— At the overall facility level (i.e. across all
sites), the top three physical climate
risks identified that can likely impact
Kingfisher include heatwaves, flash
flood and water stress-related risks
(based on total combined impact).
— We also assessed some of our high-risk
sites at an individual site-level basis and
identified the highest potential financial
implications for these specific sites in
terms of revenue loss and property
damage as likely to occur due to
riverine flooding.
Strategic response/mitigation actions
— 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.
3-year
impact
Low Low Low
5-year
impact
Low Low Low
10-year
impact
Low Low Low
Key
Low Medium High
<1% of DCF 1%-5% of DCF >5% of DCF
37
Kingfisher 2023/24 Annual Report and Accounts
Other Information
Climate-related
risk modelled Key modelling assumptions
Impact on cumulative DCF
(see key above for materiality impact)
Implications for resilience and
strategic response/ mitigation actions
6. Raw material
Supply risk:
Timber supply
chain
i Scope of raw materials risk is
currently limited to pine,
spruce and fir within Europe
only (solid wood purchases).
ii The impacts of climate
conditions on raw material
supply are limited to
temperature and precipitation.
iii Raw material yield reductions
result in lower availability of
raw materials will cause an
reduction in supply of
products resulting in lost sales.
iv Assumes 2022/23 sourcing
footprint remains static.
1.5
o
C 2.5
o
C >4
o
C Potential financial implications
— Changes in growing conditions reduce
suppliers’ yield of timber increasing raw
material sourcingcosts.
— 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.
Strategic response/mitigation actions
— We will continue to expand our scope of
raw materials for risk assessment beyond
those considered this year for further
comprehensive modelling and
corresponding resilience planning.
— We will also 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.
— This is currently a limited risk, but we will
continue to track and extend the range of
species covered, and also assess our
capability to review other raw materials
including metals
3-year
impact
Low Low Low
5-year
impact
Low Low Low
10-year
impact
Low Low Low
Our scenario analysis results indicate that both transition and physical climate-related risks could impact our financial performance
and position over the three-year time horizon assessed with low (<1% of DCF) to high (>5% of DCF) severity.
Increased risk due to consumer preference (i.e. an increasing number of consumers’ purchasing preferences shifting towards
sustainable products), poses the biggest risk to Kingfisher in the three-year outlook considered under a 1.5°C scenario. This is also a
risk where we have a strong action plan in place and control over mitigation which could be a potential opportunity (as noted in table 2
above). Increased risk from liability linked to third-party litigation around green claims or contribution to climate change is the second
highest risk area followed by increased costs from policy-driven carbon price increases. This risk type ordering and implications
remain consistent across the five and 10-year time horizons. Policy risk (carbon pricing) has a low severity impact based on
regulatory and policy-driven changes emerging in the landscape over the next three years; however, this will likely increase to
medium over time. We also expect policy risk to increase if we include downstream scope 3 emissions into our scenario modelling.
Further analysis will be needed in FY 24/25 to assess the impact of this risk. Liability risk has a medium severity impact over the next
three and five-years but will likely increase to high risk in the longer 10-year time horizon under the 1.5°C scenario.
Our scenario analysis results do not currently identify any significant impacts on our business model over the three-year 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. 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 table 2 above with our financial
statements is described on page 140.
Our response to the Task Force on Climate-related Financial Disclosures continued
Key
Low Medium High
<1% of DCF 1%-5% of DCF >5% of DCF
38
Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Risk management
The process and steps we follow to identify and manage
climate-related risks are integrated into Kingfisher’s overall risk
management framework to ensure consistency of approach.
At the same time, we recognise that climate change also presents
opportunities for us to create value for our stakeholders and
differentiate ourselves in the market. Further disclosure relating
to our consideration of any climate-related opportunities is
included in the strategy section on page 30.
Processes for identifying and assessing climate-related
risks [TCFD Risk Management (a, c)]
To identify our risks and opportunities we conduct climate
scenario modelling testing on an annual basis (also outlined in the
strategy section on page 30). This enables us to identify any
new or emerging risks that we need to include within our risk
management process. All climate-related risks and opportunities
are assessed annually and included in our Group Responsible
Business risk register managed by the Responsible Business team.
We also use the annual scenario modelling exercise to assess
our risks. This year, we undertook a detailed scenario analysis
exercise and modelled a total of nine climate risks covering
physical and transition risks of which we have disclosed the six
key risks that indicate the most material impact for our business.
These risks are then incorporated into our Group Responsible
Business risk register and assessed on their likelihood of
occurrence and their potential financial, legal, business continuity
and/or reputational impacts. Using five different impact levels,
and five different likelihoods enables us to plot each risk on a 5 x
5 matrix. The location of a risk on this matrix determines the risk
severity level (low, medium, high). This is similar to the process
followed for other Group business risks and enables us to
prioritise climate-related risks and opportunities and helps us
determine their relative strategic significance when compared
to the other Responsible Business risks and Group risks.
The risk process at Kingfisher uses a three-year outlook,
however this year, recognising the long-term nature of climate-
related risk, we have developed a climate specific risk matrix
within the Responsible Business risk register which reviews risk
on near-term (0-3 years), medium-term (3-10 years) and
long-term (>10 years) time horizons. Each risk is assessed on a
gross and net risk basis (gross risk (assuming no mitigation
actions) is used for the scenario modelling, results of which have
been detailed above on page 35). We apply qualitative
assumptions internally (as part of our internal risk review
process) on mitigation actions to achieve a net risk in
accordance with our Group-wide risk management framework
and as part of the Group Responsible Business risk process.
Our Group-level climate-related risks, 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.
Scrutiny on the validity and reliability of our response to
climate-related risks continues to increase each year. 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. Climate change was elevated to a
principal risk last year and continued to be in FY 23/24. 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 page 59. Our analysis 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.
Kingfisher’s processes for managing climate-related risks
[TCFD Risk Management (b, c)]
To manage and monitor our risks we review every risk across
all severity levels (low, medium and high), including existing and
emerging regulatory requirements related to climate change
(e.g. policy risk within our scenario analysis) within the Group
Responsible Business risk register, and develop mitigation
management plans as required. This approach reflects the inherent
uncertainty in how climate-related risks and opportunities may
impact our business in the future. Our approach to managing each
identified climate-related risk and opportunity (as identified from
our scenario modelling process) is included on table 2 page 35. Our
climate risks and opportunities linked to scenario analysis are also
reviewed annually by our Climate Disclosure Steering Group.
As climate change is considered a principal risk, we follow a
similar principal risk management process as other business
principal risks. The Group Climate Committee monitors and
assesses the company's approach to assessing climate-related
risks and opportunities and the Group Executive and Board
review the nature, likelihood and impact of the Group principal
risk annually along with any changes since the previous review.
This includes reviewing the mitigating actions to ensure that
these risks are proactively managed.
Within the business, each banner and Group function is
responsible for implementing appropriate actions, controls and
procedures in place to manage and monitor their identified risks
and to verify that the controls operate effectively. For example,
climate-related risks in relation to raw materials for our OEB
products in the supply chain are managed by our Offer & Sourcing
team responsible for buying goods for resale. This year we also
conducted a climate risk update session with all banner risk and
control managers to ensure that climate risks are integrated into
their respective banner risk registers where relevant.
39Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 against our climate-related commitments and our progress in building
resilience against different climate-related risks identified.
Metrics for assessing climate-related risks and opportunities [TCFD Metrics and Targets (a, b)]
We have identified and established specific metrics, as indicated in table 3 below, to assess and monitor the most significant risks and
opportunities arising from climate change.
Detailed performance data for these metrics and progress achieved against the targets, along with historical data for comparative
purposes, have been provided below on page 43
1
.
Table 3: Kingfisher metrics and targets for identified climate-related impacts [TCFD Metrics and Targets (a, c)]
Climate risk identified Target Metrics
Methodology, any key estimate/assumptions
or changes from previous year
Transition risks
Consumer
preference
— 60% of Group sales to be from
our Sustainable Home
Products (SHP) that help
create greener, healthier
homes, including 70% of sales
for our own exclusive brand
(OEB) products by FY 25/26.
— % of total Group sales
from SHP.
— % of total Group sales
from OEB products.
— Details on our methodology for calculating
these targets (sales from our Sustainable
Home Products) can be found in our
Responsible Business Data Collection
Methodology (www.kingfisher.com/
datamethodology).
Policy risk: carbon-
pricing
— Deliver our science-based
targets for FY 25/26 to reduce
scope 1 and 2 emissions by
37.8% in absolute terms.
— Reduce scope 3 emissions by
40% per £m of turnover
(compared with FY 16/17and FY
17/18 respectively).
— GHG emissions – scope 1,
2 and 3.
— Total energy intensity.
— Absolute, market-based, scope 1 and 2 GHG
emissions in the financial year for Kingfisher
Group. Follows the GHG Protocol. Limited
assurance on scope 1 and 2 emissions
verified by a third-party.
— Scope 3 includes emissions from purchased
goods, upstream distribution and our
customers’ use and consumption of
products sold by us. Follows GHG Protocol.
(Further details on
www.kingfisher.com/datamethodology).
Liability risk
— N/A — Discounted cash flow at
risk.
— We remain committed to disclose against
our climate-related targets and build on our
disclosure for net zero transition planning.
Reputational risk
— N/A — Discounted cash flow at
risk.
— We also monitor performance on climate
change through external disclosure
benchmarks, including the CDP climate
change disclosure initiative. In FY 23/24, our
disclosure score was A- (FY 22/23: A).
Physical risks
Key facility
operational risk
— N/A — Discounted cash flow at
risk.
— DCF at risk metric is calculated through
scenario modelling and analysis, results of
which are shown on page 37.
Raw material supply
risk
— 100% responsibly sourced
wood and paper for our
products and catalogues by
2025/26.
— Quantity of responsibly
sourced wood and paper
products (number and
percentage of SKUs
purchased).
— Details on our methodology for calculating
these targets (responsibly sourced wood
and paper) can be found in our Responsible
Business Data Collection Methodology
(www.kingfisher.com/datamethodology).
1. Our metrics have been developed with consideration to the cross-industry, climate-related metric categories described in the TCFD implementation
guidance table A2.1 and we will continue to review this guidance for any updates required to our list of metrics in the future (i.e. we will assess the relevance of
disclosing information on any additional metrics such as i) capital deployment ii) amount or percentage of business activities or assets exposed to climate risks
iii) proportion of revenue or business activities aligned with climate opportunities. We currently only calculate the TCFD recommended metrics most relevant
to our business and the climate-related risks and opportunities identified.
Our response to the Task Force on Climate-related Financial Disclosures continued
40 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Our metrics have been developed with consideration to the cross-industry, climate-related metric categories described in the TCFD
implementation guidance table A2.1 and we will continue to review this guidance. We currently only calculate the TCFD-recommended
metrics most relevant to our business and the climate-related risks and opportunities identified in the table on page 40. We do not
currently use an internal carbon price but this is a future consideration which we will review in FY 24/25.
In addition to the metrics for the climate-related risks indicated above, we are also aware of the climate-related implications
associated with aspects such as energy, water and waste and have put corresponding metrics in place for managing and monitoring
our performance in these areas.
With regards to specific targets for managing our performance on these aspects, waste management (excluding packaging and
plastics, which is considered a separate material topic) remains a medium-priority material topic for our business. However, we
continue to remain aligned to our overall ambition to eliminate waste to landfill and reach 90% recycling across our business
operations by 2025. Water management was noted to have an increased priority as a material topic in 2022/23; hence, we are
now exploring appropriate targets for this area. Further information on these topics and our performance in FY 22/23, as well as
comparative data for previous years, have been provided as part of the Responsible Business Performance Data Appendix on
page 34 at www.kingfisher.com/dataappendix.
Executive remuneration [TCFD Metrics and Targets (a)]
Our latest Remuneration Policy applicable for the executive directors (as approved at the 2022 AGM), includes the Kingfisher
Performance Share Plan which is also used for our senior leadership population. The performance conditions currently attached to
awards made under this plan include a basket of three ESG measures, aligned to our Responsible Business agenda. One of these
measures is ‘Climate Change’, specifically ‘reductions in scope 1 and scope 2 carbon emissions. The target range attached to awards
have been developed taking into account our science-based targets detailed below. Currently the basket of ESG measures accounts
for vesting of up to 25% of awards made under the plan, with each ESG measure weighted equally within the basket. For more detail
see pages 105 and 106.
Table 4: Our greenhouse gas emissions and energy use data [TCFD Metrics and Targets (b)]
2023/24
2022/23
(restated)
Metric Unit Global UK only
Global
(excl. UK) Global UK only
Global
(excl. UK)
% change
(global)
Scope 1 tCO
2
e 96,933 62,081 34,852 130,642 85,215 45,427 -25.8%
Scope 2 – location based tCO
2
e 92,167 33,849 58,318 95,870 32,667 63,203 -3.9%
Scope 2 – market based tCO
2
e 10,763 812 9,951 8,288 643 7,645 29.9%
Total scope 1 and 2 – location based tCO
2
e 189,100 95,930 93,170 226,512 117,881 108,630 -16.5%
Total scope 1 and 2 – market based tCO
2
e 107,696 62,893 44,804 138,930 85,858 53,072 -22.5%
Carbon footprint (market-based) per m
2
of floor space kgCO
2
e/m
2
13.6 17.6 10.3 17.7 24.3 12.3 -23.2%
Total energy consumption GWh 953 561 392 1,111 633 478 -14.3%
Total energy intensity kWh/m
2
120 157 90 142 180 111 -15.1%
Detailed scope 3 emissions data with a detailed category-wise breakdown as per GHG Protocol will be published in our Responsible
Business Performance Data Appendix Report for FY 23/24.
41Kingfisher 2023/24 Annual Report and Accounts
Other Information
Table 5: Six-year performance and baseline comparison [TCFD Metrics and Targets (b)]
Metric Unit 2023/24 2022/23 2021/22 2020/21 2019/20 2018/19
2016/17
baseline
% change
against
baseline
Total energy consumption GWh 953 1,111 1,230 1,139 1,193 1,274 1,284 -25.8%
Total scope 1 and 2 – market based tCO
2
e 107,696 138,930 214,256 205,767 228,146 232,843 283,696 -62.0%
Carbon footprint (market-based) per m
2
of floor space
kgCO
2
e/m
2
13.6 17.7 27.9 26.7 29.6 30.3 37.8 -64.0%
Carbon footprint (market-based) per
£ million turnover tCO
2
e/£m 8.3 10.6 16.3 16.9 20.4 20.6 26.1 -68.2%
We calculate our carbon emissions using the CO
2
e emission factors published annually by the UK Government (DEFRA/BEIS). The
data, as of 2023/24, is calculated using the ‘2023 UK Government GHG Conversion Factors for Company Reporting’, version 1.1
(expiry 10 June 2024). We record activity data (e.g. electricity consumption, gas consumption) and multiply with the relevant emission
factors. For all our non-UK operations, we obtain the emission factors from the IEA (IEA Emissions Factors, 2023 edition).
We use an operational control boundary, in line with the operational control approach as defined by the WRI/WBCSD GHG Protocol.
We include emissions from our wholly-owned subsidiaries. For our Koçtaş joint venture, as we do not have full operational control, we
include proportional emissions under scope 3 (category 15, investments).
Our data covers our material scope 1 and 2 impacts: emissions from property energy use and dedicated delivery fleets. We calculate
both our market-based and our location-based emissions from electricity consumption. Our carbon reduction target is based on the
market-based emissions.
We have restated FY 22/23 market-based scope 2 emissions to reflect additional data received after the reporting period's closure.
We also updated our methodology last year (FY 22/23) for calculating scope 3 emissions (methodology updated for emissions linked
to category 1: purchased goods and services (goods for resale) and category 11: use of sold products), using updated conversion
factors and by incorporating additional research data relating to energy using product, which resulted in us restating our baseline and
progress made since 2021/22.
Detailed information on the scope of the data and the methodologies used to calculate our data are explained in our Responsible Business Data
Collection Methodology document.
In line with the SECR (Streamlined Energy and Carbon Reporting) requirements, we report our emissions and energy use split
between the UK and other countries. UK emissions account for 58.4% of global market-based emissions and UK energy use accounts
for 58.9% of total energy use. Carbon footprint and energy intensity calculations are based on total floor area of occupied properties.
7,916,231 m
2
in FY 23/24. This is because a significant component of our direct environmental impact derives from our property
portfolio. We continue to improve energy efficiency in our operations through various measures, including installing LED lighting and
optimising existing heating, cooling, and lighting controls. We are also replacing gas heating systems with electric Air Source Heat
Pumps (ASHP) to further enhance energy efficiency. Additionally we are installing on-site solar PV systems to decrease reliance on
grid power.
Table 6: Selected scope 3 GHG emissions data [TCFD Metrics and Targets (b)]
Metric Unit 2023/24 2022/23 2021/22
2017/18
baseline
% change
against
baseline
Scope 3 GHG emissions: Category 1.1 – purchased goods
and services tCO
2
e 3,117,463 3,415,939 3,589,851 3,838,277 -18.8%
Scope 3 GHG emissions: Category 11 – use of sold products tCO
2
e 13,640,218 15,618,779 17,658,668 21,032,118 -35.1%
Scope 3 GHG emissions tCO
2
e 16,757,681 19,034,718 21,248,519 24,870,395 -32.6%
Scope 3 footprint per £ million turnover tCO
2
e/£m 1,291.0 1,457.6 1,611.8 2,210.4 -41.6%
The table above includes selected scope 3 GHG emissions from use of sold products and upstream scope 3 GHG emissions from
purchased goods for resale and services. Our total scope 3 footprint will be published in the Responsible Business Report in June 2024.
Our response to the Task Force on Climate-related Financial Disclosures continued
42 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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 below in table 7.
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.
Additional information, including performance summary and progress against our targets, will be disclosed in our Responsible
Business Performance Data Appendix for FY 23/24.
Table 7: Progress on climate-related targets
Target Performance
Variance in current year vs.
interim target
Reach net zero emissions for our operations
(scope 1 and 2) by the end of 2040/41.
Performance: On track
We have reduced absolute scope 1 and 2 emissions by
62.0% since 2016/17. We are currently exceeding our
2025 target and are on track to reduce emissions 90% by
2040.
Exceeded interim target by
31.8 ppts.
Reduce scope 1 and 2 market-based emissions
by 37.8% in absolute terms by 2025/26,
compared to 2016/17 (science-based targets).
Performance: On track
We have reduced absolute scope 1 and 2 emissions by
62.0% since 2016/17. We are currently exceeding our
target.
Exceeded interim target by
31.8 ppts.
Reduce scope 3 emissions by 40% per £million
turnover by 2025/26, compared to 2017/18.
Performance: On track
We have reduced of our scope 3 emissions intensity from
the supply chain and customer use of products by 41.6%
since 2017/18. We are currently exceeding our target.
Exceeded interim target by
11.6 ppts.
100% responsibly sourced wood and paper for
our products and catalogues by 2025/26.
Performance: On track
96.6% of wood and paper in our products was responsibly
sourced and 99.9% of catalogue paper.
Products: Exceeded interim
target by 2.6 ppts.
Catalogues: Missed the interim
target by 0.1 ppts.
60% of Group sales to be from our Sustainable
Home Products by 2025/26, including 70% of
sales for own exclusive brand (OEB) products.
Performance: On track
49.4% of our total Group sales came from SHP in 2023/24
For our OEB ranges, we achieved 60.1%.
Total: Exceeded interim target
by 0.4 ppts.OEB: Exceeded
interim target by 0.1 ppts.
Our science-based emissions reduction targets
Our near-term targets across scopes 1, 2 and 3 (for FY 25/26) are aligned with the methodologies of the Science Based Target initiative
(SBTi). Our commitment to reach net zero scope 1 and 2 emissions by 2040 builds on our near-term science-based targets and
indicates that we will reduce absolute emissions by at least 90% against our 2016/17 baseline and neutralise any residual emissions.
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 banners where we have the full authority to introduce and implement operating policies.
As of this year, we continue to be on track to meet our emissions reduction targets and our priority remains to maintain this progress
to meet our near-term targets while also ensuring a strong foundation to be able to achieve our long-term net zero transition. We will
continue to expand our transition plan, with consideration of the Transition Plan Taskforce Disclosure Framework and the TCFD
Guidance on Metrics, Targets, and Transition Plans.
We are also working towards developing a scope 3 net zero target and supporting roadmap. In 2023/24 we have expanded our work with
our suppliers and are working with Manufacture 2030 to support them in calculating and reducing their carbon footprint. Over 400 of our
suppliers (including over 500 supplier facilities) have joined Manufacture 2030’s Low Carbon Manufacturing Programme (LCMP) to date.
We also continue to promote cross-sector climate action through our support for the British Retail Consortium’s Climate Action Roadmap.
In 2023/24, we were a founding member of a new collaborative task force, initiated by EDRA/GHIN (the global trade bodies for home
improvement retailers), to help our sector reduce its scope 3 emissions. The task force will find more consistent, simpler ways to help home
improvement retailers measure our emissions, and learn from each other, to drive down our value chain emissions as fast as possible.
Our progress against these targets for the current year, and whether we are on track with our expected performance, has been
outlined in the table 7 above.
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.
43Kingfisher 2023/24 Annual Report and Accounts
Other Information
TCFD index
In compliance with FCA Listing Rule 9.8.6R(8), Kingfisher plc is required to disclose on a comply or explain basis, its compliance
with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Kingfisher is also in scope of the
Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and therefore required to incorporate
Climate-related Financial Disclosures (CFD)-aligned climate disclosures in its Annual Report and Accounts. We have prepared our
disclosures in accordance with TCFD and in full compliance with the FCA and CFD requirements, as well as considering the findings
of the FRC’s CRR thematic review. The TCFD index indicating our alignment with each TCFD recommendation (along with any
accompanying explanatory notes) has been provided below. The table specifically indicates our response and progress made this
year on the action areas identified in previous year’s disclosures.
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 114. 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
2023/24 Responsible Business Report.
1. TCFD pillar 2. Recommended
disclosures
3. Disclosure status
(comply/explain)
4. Link to information/
Kingfisher response
5. Additional notes/commentary
Governance a) Describe the
board’s oversight of
climate-related risks
and opportunities.
Comply
— Governance section page 28
– Board-level oversight of
climate-related risks and
opportunities.
— Governance section page 28
– Board-level oversight of
climate-related risks and
opportunities (role of GCC,
GIC, and banner Boards).
— Governance section page 28
– Board-level oversight of
climate-related risks and
opportunities.
We will continue to ensure holistic Board/Board
committees oversight on our climate-related
risks and opportunities.
As we progress further on our climate
commitments, including our net zero targets
and transition plan, we will aim to disclose more
information on the progress achieved in
subsequent reporting cycles.
b) Describe
management’s role in
assessing and
managing climate-
related risks and
opportunities.
Comply
— Governance section page 28
– Board-level oversight of
climate-related risks and
opportunities.
— Governance section page 29
– TCFD governance
structure (infographic).
— Governance section pages
28-29 – management’s role in
assessing and managing
climate-related risks and
opportunities.
Our response to the Task Force on Climate-related Financial Disclosures continued
44 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
1. TCFD pillar 2. Recommended
disclosures
3. Disclosure status
(comply/explain)
4. Link to information/
Kingfisher response
5. Additional notes/commentary
Strategy a) Describe the
climate-related risks
and opportunities
the organization has
identified over the
short, medium, and
long term.
Comply
— TCFD strategy section: our
climate-related risks and
opportunities page 30-32 –
table 1: Time horizons –
description and rationale for
selection.
— TCFD strategy section page
30-32 – table 1: List of
climate-risks and
opportunities identified over
short, medium and long term
and impacts on business
strategy and financial
planning.
— TCFD strategy section page
33-34 – our approach to
climate scenario analysis.
Our scenario modelling approach considers
climate-related risks globally and the results
indicated in the scenario analysis results table
on pages 35-38 are presented as global values.
We assessed operational risks to our value
chain at a country geographic level, aligned to
our key markets. We determined that some
regions were more exposed to physical
phenomena from heatwaves and flooding, and
certain regions were more exposed to
transition risks due to having more rigorous
public policies covering carbon emissions.
However, these risks did not give rise to
material impacts for our business currently
(‘materiality’ definition has been provided on
page 35).
b) Describe the
impact of climate-
related risks and
opportunities on the
organisation’s
businesses, strategy,
and financial
planning.
Comply
— TCFD strategy section pages
30-32, table 1: List of
climate-risks and
opportunities identified over
short, medium, and long term
and impacts on business
strategy and financial
planning.
— Page 33 – additional impacts
of climate-related risks and
opportunities on our strategy
and financial planning.
— Page 33 – our approach to
climate scenario analysis.
We will continue to disclose relevant
information on the implementation of our
climate transition plan and progress achieved in
subsequent reporting years and also continue
to provide additional updates and information
about how climate-related risks and
opportunities continue to be an integral part of
our business strategy and decision-making, as
required, including any decision-making related
to financial and capital allocation.
c) Describe the
resilience of the
organisation’s
strategy, taking into
consideration
different climate-
related scenarios,
including a 2°C or
lower scenario.
Comply
— TCFD strategy section page
33 - Our approach to climate
scenario analysis.
— Table 2: climate scenario
description.
— Page 35 – scenario analysis
results.
— Table 2: Results of scenario
analysis.
Further information on the alignment of the
scenarios discussed in the strategy section on
pages 33-34, and the assumptions and
sensitivities identified in table 2. with our
financial statements is described in our financial
statements on page 140.
Risk
management
a) Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks.
Comply
— TCFD risk management
section page 39 – processes
for identifying and assessing
climate-related risks.
b) Describe the
organisation’s
processes for
managing climate
related risks.
Comply
— TCFD risk management
section page 39 – processes
for identifying and assessing
climate-related risks.
— Page 39 – Kingfisher’s
processes for managing
climate-related risks.
45
Kingfisher 2023/24 Annual Report and Accounts
Other Information
1. TCFD pillar 2. Recommended
disclosures
3. Disclosure status
(comply/explain)
4. Link to information/
Kingfisher response
5. Additional notes/commentary
Risk
management
c) Describe how
processes for
identifying,
assessing, and
managing climate-
related risks are
integrated into the
organisation’s overall
risk management.
Comply
— TCFD risk management
section page 39 – processes
for identifying and assessing
climate-related risks.
— Page 39 – Kingfisher’s
processes for managing
climate-related risks.
Metrics and
targets
a) Disclose the
metrics used by the
organisation to
assess climate-
related risks and
opportunities in line
with its strategy and
risk management
process.
Comply
Supplemental
guidance
– explain. We
currently do
not disclose
forward-
looking
projections of
our key climate
metrics due to
the level of
assumptions
that would
require to be
considered to
calculate such
future data,
which may
result in
inaccurate
projections
that we would
like to avoid.
We may
reconsider our
position in the
future, as
necessary.
— TCFD Metrics and targets
section – page 40-41 –
metrics for assessing
climate-related risks and
opportunities.
— Table 3: Kingfisher metrics
and targets for identified
climate-related impacts.
— Page 41 – executive
remuneration.
— Further detailed information on the scope of
the data and the methodologies used to
calculate our data are also explained in our
Responsible Business Data Collection
Methodology document (www.kingfisher.
com/datamethodology).
— We do not currently use an internal carbon
price, but this is a future consideration which
we will review in FY 24/25.
— Our metrics have been developed with
consideration to the cross-industry,
climate-related metric categories described
in the TCFD implementation guidance table
A2.1 and we will continue to review this
guidance for any updates required to our list
of metrics in the future (i.e. we will assess the
relevance of disclosing information on any
additional metrics such as i) capital
deployment, ii) amount or percentage of
business activities or assets exposed to
climate risks and iii) proportion of revenue or
business activities aligned with climate
opportunities. We currently only calculate the
TCFD recommended metrics most relevant
to our business and the climate-related risks
and opportunities identified.
b) Disclose scope 1,
scope 2, and, if
appropriate, scope 3
greenhouse gas
(GHG) emissions,
and the related risks.
Comply
— Page 42 - table 4: our
greenhouse gas emissions
and energy use data.
— Page 42 - table 5: five-year
performance and baseline
comparison.
c) Describe the
targets used by the
organization to
manage climate-
related risks and
opportunities and
performance against
targets.
Comply
— Page 43 - targets for
managing climate-related
risks and opportunities.
— Page 40-41 - table 3:
Kingfisher metrics and
targets for identified
climate-related impacts.
— Page 43 - table 7: Progress
on climate-related targets.
Our response to the Task Force on Climate-related Financial Disclosures continued
46 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Non-financial and sustainability information
statement
This statement is made in compliance with sections 414CA and 414CB of the Companies Act and provides details of where in
this report more information on the matters referred to below may be found.
Reporting requirement Our approach Relevant policies Where to find more information Page
Environmental matters We will help tackle climate
change by reducing carbon
emissions from our business,
products and supply chains; and
we continue our journey to
become Forest Positive by
focusing on responsible sourcing
and investing in forest projects.
— 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
21
24
28
63
78
Employees We will be a more inclusive
company, by breaking down
barriers to employment and
progression, and by 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
19
24
60
78
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
17
22
24
78
Human rights We respect human rights and
aim to understand and address
the human rights impacts of our
business. 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
21
24
26
63
78
Anti-bribery and
corruption
We are committed to high
ethical standards in all aspects of
our business. We put in place
clear policies and robust
processes to ensure every
colleague understands their
responsibilities and applies our
ethical standards.
— 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
21
27
60, 62,
63
83
Description of business
model
— Business model 12
Non-financial key
performance indicators
— Key performance indicators 10
Principal risks and
uncertainties
— Risk management
— Principal risks
59
60
47
Kingfisher 2023/24 Annual Report and Accounts
Other Information
A summary of the reported financial results for the 12 months ended 31 January 2024 is set out below.
Financial summary 2023/24 2022/23
% Total Change % Total Change % LFL Change
Reported Constant currency Constant currency
Sales £12,980m £13,059m (0.6)% (1.8)% (3.1)%
Gross profit £4,776m £4,795m (0.4)% (1.6)%
Gross margin % 36.8% 36.7% 10bps 10bps
Operating profit £580m £723m (20.0)%
Statutory pre-tax profit (PBT) £475m £611m (22.3)%
Statutory post-tax profit £345m £471m (26.7)%
Statutory basic EPS 18.2p 23.8p (23.5)%
Net increase/(decrease) in cash
1
£84m £(555)m n/a
Total dividend 12.40p 12.40p –
Adjusted metrics
Retail profit £749m £923m (18.9)% (19.5)%
Retail profit margin % 5.8% 7.1% (130)bps (130)bps
Adjusted pre-tax profit (PBT) £568m £758m (25.1)%
Adjusted pre-tax profit margin % 4.4% 5.8% (140)bps
Adjusted post-tax profit £415m £589m (29.2)%
Adjusted basic EPS 21.9p 29.7p (26.4)%
Free cash flow £514m £(40)m n/a
Net debt
2
£(2,116)m £(2,274)m n/a
1. Net increase/(decrease) in cash and cash equivalents and bank overdrafts.
2. Net debt includes £2,367 million of lease liabilities under IFRS 16 in FY 23/24 (FY 22/23: £2,444 million).
Financial review
Sales
Total sales decreased by 1.8% on a constant currency basis, to £12,980 million, reflecting a resilient performance in core categories,
particularly in the UK & Ireland, and the adverse impact of weaker ‘big-ticket’ sales in the latter part of the year and unseasonal
weather on seasonal category sales. By geography, a positive sales performance in the UK & Ireland was offset by lower sales in
France, where the trading environment was impacted by low consumer confidence, particularly in the second half of the year. Sales
were also lower in Poland, Iberia and Romania, where we faced tough comparatives and a weak consumer environment. On a reported
basis, which includes the impact of exchange rates, total sales decreased by 0.6%.
Like-for-like sales
Like-for-like (LFL) sales of -3.1% excludes a +1.3% sales impact from a net increase in space, driven by Screwfix store openings in the UK
& Ireland and Castorama in Poland, and the acquisition of assets of Connect Distribution Services Limited (renamed Screwfix Spares).
During the year, we opened 76 new stores (including 49 stores in the UK, five in Ireland, 17 in France including 15 Screwfix stores, and five
in Poland). We closed one Screwfix store and eight grocery concession stores in the UK, and one Brico Dépôt store in Romania.
Gross margin
Gross margin % increased by 10 basis points on a constant currency and reported basis, reflecting effective management of inflation
and supplier negotiations, partially offset by higher customer participation in promotional activity in France and Poland. In H2, gross
margin % increased on a constant currency basis by 60 basis points. Group gross profit decreased by 1.6% in constant currency.
Retail profit
In constant currency, retail profit decreased by 19.5%, largely reflecting lower gross profits in France and Poland, and higher
operating costs in the UK & Ireland and Poland. On a reported basis, retail profit decreased by 18.9%. Operating costs increased by
2.7% on a constant currency basis, largely reflecting cost inflation, including year-on-year increases in pay rates and energy costs,
as expected, as well as higher technology spend, higher costs associated with space growth and new store openings, and charges
related to ineffective foreign exchange hedges in H1. The increase in operating costs was partially offset through flexing our staffing
levels and variable costs, and structural savings achieved by our cost reduction programme. InH2, our banners in France and Poland
strengthened their actions on cost management, resulting in operating costs being limited to an increase of 1.3% year-on-year. The
Group’s retail profit margin % decreased by 130 basis points on a constant currency basis to 5.8% (FY 22/23: 7.1%, at reported rates).
In H2, retail profit margin % decreased on a constant currency basis by 70 basis points to 5.2%.
48 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Adjusted pre-tax profit
Adjusted pre-tax profit decreased by 25.1% to £568 million (FY 22/23: £758 million), reflecting lower retail profit, higher central costs
(includingthe impact of insurance claim deductibles in the UK & Ireland and Poland) and higher share of JV interest and tax (reflecting
accounting under high inflation and related higher interest rates in our joint venture Koçtaş), partially offset by lower net finance
costs. Adjusted pre-tax profit margin % decreased by 140 basis points to 4.4% (FY 22/23: 5.8%).
Statutory pre-tax profit
Statutory pre-tax profit decreased by 22.3% to £475 million (FY 22/23: £611 million). This reflects lower operating profit, including the
impacts ofimpairments (see adjusting items below).
A reconciliation from the adjusted basis to the statutory basis for pre-tax profit is set out below:
2023/24
£m
2022/23
£m
Increase/
(decrease)
Retail profit (constant currency) 749 930 (19.5)%
Impact of exchange rates – (7) n/a
Retail profit (reported) 749 923 (18.9)%
Central costs (60) (49) (22.9)%
Share of interest and tax of joint ventures & associates (16) (4) n/a
Net finance costs (105) (112) +6.1%
Adjusted pre-tax profit 568 758 (25.1)%
Adjusting items before tax (93) (147) n/a
Statutory pre-tax profit 475 611 (22.3)%
Net finance costs of £105 million (FY 22/23: £112 million) consist principally of interest on IFRS 16 lease liabilities. The year-on-year
decrease was largely due to higher interest income on cash deposits.
Adjusting items after tax were a total charge of £70 million (FY 22/23: charge of £118 million), as detailed below:
2023/24
£m
Gain/(charge)
2022/23
£m
Gain/(charge)
Net store asset impairment charges (76) (139)
Operating model restructuring (11) –
Release of France and other restructuring provisions – 3
NeedHelp goodwill impairment (8) –
Romania goodwill impairment – (16)
Release of Castorama Russia disposal warranty liability – 4
Profit on disposal of Crealfi associate investment 2 –
Profit on exit of properties – 1
Adjusting items before tax (93) (147)
Prior year and other adjusting tax items 23 29
Adjusting items after tax (70) (118)
In consideration of our FY 23/24 performance, we have revised future projections for a number of stores across the Group’s
portfolio. This has resulted in the recognition of £76 million of net store impairment charges in the year. Impairment charges of
£104 million have been recorded principally in France, Romania and the UK, partially offset by impairment reversals of £28 million
principally in the UK. During the year, the Group commenced formal consultations with employee representatives regarding a
proposed restructuring of the Group technology operating model. Charges of £11 million have been recorded, primarily related to this
programme. The total cost of the programme is expected to reach c.£15 million by FY 24/25. An impairment charge of £8 million has
been recorded relating to the goodwill originally recorded on the acquisition of NeedHelp in FY 20/21, principally driven by revised
financial projections. On 30 June 2023, the Group completed the disposal of its 49% interest in its French associate investment
Crealfi S.A., resulting in a gain on disposal of £2 million.
Prior year and other adjusting tax items relate principally to deferred tax credits recorded in respect of the impairment and
restructuring expenses noted above, movements in prior year provisions to reflect a reassessment of expected outcomes, agreed
positions with tax authorities and items that have time-expired. Please refer to note 10 of the consolidated financial statements.
49Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 27% (FY 22/23: 22%).
The adjusted ETR is higher than the prior year rate primarily due to the increase in the UK statutory tax rate which took effect on
1 April 2023. Other factors include the impact of a lower share of Group profit from Poland (statutory tax rate of 19%), and increased
losses in territories in which tax credits are not recognised.
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 27%.
Pre-tax profit
£m
Tax
£m
2023/24
%
Pre-tax profit
£m
Tax
£m
2022/23
%
Adjusted effective tax rate 568 (153) 27% 758 (169) 22%
Adjusting items (93) 23 (147) 29
Statutory effective tax rate 475 (130) 27% 611 (140) 23%
In FY 21/22, Kingfisher paid £64 million (including interest) to HM Revenue & Customs in relation to the European Commission’s 2019
state aid decision concerning the UK’s controlled foreign company tax rules. The General Court of the European Union dismissed
several of the appeals in June 2022 and the decision is now pending with the European Court of Justice. The Group continues to
recognise the amounts paid, together with a further £4 million of accrued repayment interest, as a non-current tax asset, based on its
assessment that its appeal will ultimately be successful. Please refer to note 35 of the consolidated financial statements.
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:
Statutory tax rate
2024/25
Statutory tax rate
2023/24
UK 25% 24%
France 26% 26%
Poland 19% 19%
Adjusted basic earnings per share decreased by 26.4% to 21.9p (FY 22/23: 29.7p), which excludes the impact of adjusting items.
Basicearnings per share decreased by 23.5% to 18.2p (FY 22/23: 23.8p).
Earnings
1
£m
2023/24
EPS
pence
Earnings
1
£m
2022/23
EPS
pence
Adjusted basic earnings per share 415 21.9 589 29.7
Adjusting items before tax (93) (4.9) (147) (7.4)
Prior year and other adjusting tax items 23 1.2 29 1.5
Basic earnings per share 345 18.2 471 23.8
1. Earnings figures presented reconcile adjusted post-tax profits to statutory post-tax profits.
Tax contribution
Kingfisher makes a significant economic contribution to the countries in which it operates. In 2023/24 it contributed £2.2 billion in
taxes it both pays and collects for these governments. The Group pays tax on its profits, its properties, in employing over 78,000
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
2023/24
£bn
2022/23
1
£bn
Taxes borne 0.7 0.8
Taxes collected 1.5 1.5
Total tax contribution 2.2 2.3
1. 2022/23 comparatives are presented on a constant currency basis.
Kingfisher participates in the Total Tax Contribution survey that PwC perform for the 100 Group of Finance Directors. The 2023 survey
ranked Kingfisher 28
th
(2022: 23
rd
) for its Total Tax Contribution in the UK. In 2023, 92 (2022: 95) companies contributed to the survey.
Financial review continued
50 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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. We undertake our activities and pay tax in the
countries in which we operate in compliance with the local and worldwide tax rules. These tax objectives are met through the
application of the Group Tax Standards, which are Board approved, and 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 22/23 final dividend: 8.60p). Taken alongside the interim dividend
already paid of 3.80p, this results in a proposed total dividend per share of 12.40p in respect of FY 23/24 (FY 22/23: 12.40p). The final
dividend is subject to shareholder approval at the Annual General Meeting on 20 June 2024, and if approved will be paid on 25 June
2024 to shareholders on the register at close of business on 17 May 2024. The shares will go ex-dividend on 16 May 2024. A Dividend
Reinvestment Plan (DRIP) is available to shareholders who would prefer to invest their dividends in the Company’s shares. The last
date for receipt of DRIP elections is 4 June 2024.
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 or
refinancing of debt, and identifying an appropriate amount of headroom to provide a reserve against unexpected outflows and/or
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 £800 million.
Net debt to EBITDA
As of 31 January 2024, the Group had £2,116 million (FY 22/23: £2,274 million) of net debt on its balance sheet including £2,367 million
(FY 22/23: £2,444 million) of total lease liabilities.
The ratio of the Group’s net debt to EBITDA was 1.6 times as of 31 January 2024 (1.6 times as of 31 January 2023). 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:
2023/24
£m
2022/23
£m
Retail profit 749 923
Central costs (60) (49)
Depreciation and amortisation 641 582
EBITDA 1,330 1,456
Net debt 2,116 2,274
Net debt to EBITDA 1.6 1.6
51
Kingfisher 2023/24 Annual Report and Accounts
Other Information
Financial review continued
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, of which c.£50 million expires in May 2025 and c.£500 million expires in May 2026.
As of 31 January 2024, this RCF was undrawn.
Term loans
In FY 22/23, the Group entered into two 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. In FY 23/24, the two term loans were extended
to June 2025 and January 2026 respectively.
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 2024, Kingfisher was compliant with this requirement.
Total liquidity
As of 31 January 2024, the Group had access to over £900 million in total liquidity, including cash and cash equivalents of £353 million
(net of bank overdrafts) and access to a £550 million RCF.
Free cash flow
A reconciliation of free cash flow is set out below:
2023/24
£m
2022/23
£m
Operating profit 580 723
Adjusting items 93 147
Operating profit (before adjusting items) 673 870
Other non-cash items
1
673 612
Change in working capital 118 (469)
Pensions and provisions (5) (20)
Net rent paid (474) (454)
Operating cash flow 985 539
Net interest received/(paid) 9 –
Tax paid (117) (130)
Gross capital expenditure (363) (449)
Free cash flow 514 (40)
Ordinary dividends paid (237) (246)
Share buybacks (160) (337)
Share purchase for employee incentive schemes (24) (9)
Disposal of Castorama Russia – 8
French tax authority payment – (34)
Disposal of Crealfi S.A. and acquisition of assets of Connect Distribution Services Limited 6 –
Disposal of assets and other
2
(15) 4
Net cash flow 84 (654)
Opening net debt (2,274) (1,572)
Movements in lease liabilities 71 (41)
Other movement including foreign exchange 3 (7)
Closing net debt (2,116) (2,274)
1. Includes depreciation and amortisation, share-based compensation charge and pension operating cost.
2. Includes adjusting cash flow items (principally comprising restructuring costs), partially offset by proceeds from the issue of new shares, dividends from joint
ventures and associates, and disposal of assets.
52 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Operating profit (before adjusting items) was £197 million lower than last year, reflecting lower retail profit, higher central costs and
higher share of JV interest and tax. The working capital inflow of £118 million was primarily driven by a decrease in net inventory of
£132 million, reflecting lower purchasing, a reduction in seasonal and ‘buffer’ stock, product mix and strategic reduction initiatives;
partially offset by product cost inflation and new stores. Due to more normalised purchasing patterns compared to prior years, the
movement in payables was broadly stable, decreasing by £8 million. Receivables increased by £6 million.
Gross capital expenditure was £363 million, decreasing by 19% (FY 22/23: £449 million). Of this expenditure, 35% was invested in
refreshing, maintaining and adapting existing stores (including renewable energy initiatives), 18% on new stores, 34% on technology
and digital development, 7% on range reviews and 6% on other areas including supply chain investment.
Overall, free cash flow for the year was £514 million (FY 22/23: £(40) million). Net debt as of 31 January 2024 (including IFRS 16 lease
liabilities) was £2,116 million (FY 22/23: £2,274 million).
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:
2023/24
£m
2022/23
£m
Free cash flow 514 (40)
Ordinary dividends paid (237) (246)
Share buybacks (160) (337)
Share purchase for employee incentive schemes (24) (9)
Disposal of Castorama Russia – 8
French tax authority payment – (34)
Disposal of Crealfi S.A. and acquisition of assets of Connect Distribution Services Limited 6 –
Disposal of assets and other
1
(15) 4
Net cash flow 84 (654)
Issue of fixed term debt – 99
Net increase/(decrease) in cash and cash equivalents and bank overdrafts 84 (555)
1. Includes adjusting cash flow items (principally comprising restructuring costs), partially offset by proceeds from the issue of new shares, dividends from joint
ventures and associates, and disposal of assets.
Return on capital employed (ROCE)
In FY 23/24, Kingfisher’s post-tax ROCE was 7.8% (FY 22/23: 10.9%). The decrease was driven by lower profits in all geographic
divisions. Kingfisher’s weighted average cost of capital (WACC) was 8.8% (FY 22/23: 9.3%).
ROCE by geographic division is analysed below:
Sales
£bn
Proportion of
Group sales
Capital employed
(CE) £bn
Proportion of
Group CE
ROCE
2023/24
ROCE
2022/23
UK & Ireland 6.4 49.2% 2.9 45.4% 14.5% 16.3%
France 4.2 32.7% 1.7 27.0% 5.9% 8.4%
Other International 2.4 18.1% 1.4 22.3% 3.9% 9.1%
Central 0.4 5.3%
Total 13.0 6.4 7.8% 10.9%
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 safeguard the Group’s ability to continue as a going concern and 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.
53Kingfisher 2023/24 Annual Report and Accounts
Other Information
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.
Our target ordinary dividend cover range is 2.25 to 2.75 times, based on adjusted basic earnings per share. We may move outside of
this target range, temporarily, from time to time. Overall, our aim is to grow the ordinary dividend progressively over time. If surplus
capital remains after having achieved all the above objectives, the Board will return surplus capital to shareholders via a share
buyback programme or special dividends.
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.
Property
Kingfisher owns a significant property portfolio, the majority of which is used for trading purposes. A formal valuation of the portfolio
was undertaken by external professional valuers in October 2023. Based on this exercise, on a sale and leaseback basis with
Kingfisher in occupancy, the value of the property portfolio was £2.7 billion (FY 22/23: £2.8 billion). This is compared to a net book
value of £2.2 billion (FY 22/23: £2.2 billion) recorded in the financial statements (including investment property and property included
within assets held for sale). Balance sheet values were frozen as of 1 February 2004, on transition to IFRS.
2023/24
£bn
2023/24
Yields
2022/23
£bn
2022/23
Yields
France 1.3 8.6% 1.4 8.1%
UK 0.5 7.5% 0.5 7.2%
Poland 0.7 8.3% 0.7 8.0%
Other 0.2 n/a 0.2 n/a
Total 2.7 2.8
Pensions
As of 31 January 2024, the Group had a net surplus of £99 million (FY 22/23: £137 million net surplus) in relation to defined benefit
pension arrangements, of which a £212 million surplus (FY 22/23: £251 million surplus) was in relation to the UK scheme. The net surplus
has reduced primarily due to the UK scheme, where asset losses were greater than the reduction in the accounting liability; the latter
arising mainly from a higher discount rate (net of inflation). As part of the funding valuation exercise completed in the prior year, the
Trustee and Kingfisher agreed to cease annual employer contributions 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 of the
consolidated financial statements.
Financial review continued
54 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
UK & Ireland
£m 2023/24 2022/23
% Reported
Change
% Constant
Currency
Change
% LFL
Change
B&Q 3,849 3,835 +0.4% +0.3% +0.4%
Screwfix 2,538 2,365 +7.3% +7.3% +1.4%
Total sales 6,387 6,200 +3.0% +3.0% +0.8%
Retail profit 555 603 (8.0)% (8.0)%
Retail profit margin % 8.7% 9.7% (100)bps (100)bps
UK & Ireland sales increased by 3.0% (LFL +0.8%) to £6,387 million, supported by resilient e-commerce and trade customer sales.
Core categories performed well, supported by an improving underlying volume trend through the year, while retail sales in ‘big-ticket’
categories (i.e., kitchen and bathroom & storage) weakened in H2. Seasonal categories were impacted by adverse weather patterns
during the year, particularly in Q1 and Q4, but notably improved in H2 relative to the first half of the year. B&Q, TradePoint and
Screwfix all gained market share (as measured by BRC, Barclays and GfK), strengthening their competitive positions in the UK home
improvement market. Gross margin % increased by 40 basis points, reflecting effective management of inflation and favourable
channel mix impacts due to the strong growth of B&Q’s e-commerce marketplace.
Retail profit decreased by 8.0% to £555 million (FY 22/23: £603 million, at reported rates), due to higher operating costs. Operating
costs increased by 8.0%, driven by cost inflation, including year-on-year increases in staff and energy costs, higher costs associated
with 45 net new store openings (year-on-year), and higher technology spend. Cost increases were partially offset through structural
savings achieved by our cost reduction programme. Retail profit margin % decreased by 100 basis points to 8.7% (FY 22/23: 9.7%).
B&Q
B&Q total sales increased by 0.3% (LFL +0.4%) to £3,849 million, with LFL sales growth in surfaces & décor and tools & hardware
categories and resilient sales in building & joinery and outdoor. Sales trends slowed in H2 (LFL -0.2%), particularly in Q4, with a weaker
performance seen in ‘big-ticket’ categories and warmer weather impacting the sales of EPHC (electricals, plumbing, heating &
cooling). B&Q’s total e-commerce sales increased by 21.5% year-on-year, driven by the strong growth of B&Q’s marketplace. B&Q’s
e-commerce sales penetration was 13% (FY 22/23: 11%; FY 19/20: 5%). The business opened one medium-box (small retail park) and
two compact ‘B&Q Local’ stores in the year, and closed all eight of its grocery concession stores. As of 31 January 2024, B&Q had a
total of 311 stores in the UK & Ireland.
TradePoint
B&Q’s trade-focused banner, TradePoint, delivered a good performance supported by resilient demand from trade customers. LFL
sales for TradePoint were up 0.7%, despite tough comparatives, with penetration of B&Q sales at 22% (FY 22/23: 22%). A strong
performance was seen in the surfaces & décor and tools & hardware categories. In H2, TradePoint’s LFL sales improved to +3.6%.
Sales to trade customers of ‘big-ticket’ categories also improved in the second half of the year, with resilient sales of bathroom &
storage. TradePoint opened 21 new counters in the UK & Ireland, extending its presence within the B&Q store network to 209 stores
(67% of stores).
Screwfix
Screwfix total sales increased by 7.3% (LFL +1.4%) to £2,538 million, driven by resilient demand from trade customers. Good
performance was seen across most categories, with tools & hardware, building & joinery and outdoor performing particularly well.
Sales trends slowed in H2 (LFL -0.2%) largely due to a weak market in December and unseasonably warmer weather throughout the
period. The business gained significant market share in the year. Screwfix’s e-commerce sales increased by 1.6% year-on-year, with
e-commerce sales penetration of 57% (FY 22/23: 60%; FY 19/20: 33%), reducing slightly year-on-year due to the increasing adoption
of in-store digital browsing tablets.
Space growth and acquisitions contributed c.6% to total Screwfix sales. Screwfix opened 51 new stores, including 46 in the UK and
five in Ireland, and closed one store in the UK, bringing its total to 922 as of 31 January 2024. Screwfix plans to open up to 40 new
stores in the UK & Ireland in FY 24/25, remaining on track to reach its medium-term goal of over 1,000 stores.
In March 2023, the business acquired the stock, intellectual property, contracts and fixed assets of Connect Distribution Services
Limited (renamed Screwfix Spares), a leading retailer of appliance spares, accessories and consumables to tradespeople and
consumers. Since acquisition, Screwfix Spares has performed in line with expectations, contributing c.1.8% to total Screwfix sales
growth. Monthly sales accelerated in H2, with the business reaching a profit-making position by the end of the year.
Further progressing its international expansion plans, Screwfix opened 15 stores in France in the year (with 20 stores in total as of
31 January 2024), and plans to open up to 15 stores in FY 24/25. The results for Screwfix International are captured in ‘Other
International’ – see pages 57 and 58 for further information.
Trading review by division
55Kingfisher 2023/24 Annual Report and Accounts
Other Information
France
£m 2023/24 2022/23
% Reported
Change
% Constant
Currency
Change
% LFL
Change
Castorama 2,219 2,302 (3.6)% (4.8)% (4.8)%
Brico Dépôt 2,027 2,150 (5.7)% (6.9)% (7.1)%
Total sales 4,246 4,452 (4.6)% (5.8)% (5.9)%
Retail profit 139 195 (28.8)% (29.7)%
Retail profit margin % 3.3% 4.4% (110)bps (110)bps
France sales decreased by 5.8% (LFL -5.9%) to £4,246 million, with the trading environment impacted by low consumer confidence,
particularly in the second half of the year. In H2, LFL sales were -8.3%, with market weakness reflected broadly across all categories.
Unseasonal weather conditions also impacted the performance of seasonal categories during the year (LFL -9.2%). Gross margin %
decreased by 10 basis points, reflecting the higher weighting of sales towards special promotions (‘arrivages’) at Brico Dépôt, largely
offset by effective supplier negotiations and lower distribution costs and shrinkage rates. Gross margin % increased by 20 basis
points in H2.
Retail profit decreased by 29.7% to £139 million (FY 22/23: £195 million, at reported rates), with lower gross profit somewhat offset by
lower operating costs. Operating costs decreased by 2.9% due to the active flexing of variable costs, and structural savings achieved
by our cost reduction programme. This was partially offset by cost inflation, including year-on-year increases in pay rates and energy
costs, together with higher technology spend. In H2, in response to the weaker trading environment, the business accelerated several
structural cost reduction initiatives and strengthened its actions around staff costs and discretionary spend, resulting in an operating
cost reduction of 4.4% year-on-year. Retail profit margin % decreased by 110 basis points to 3.3% (FY 22/23: 4.4%, at reported rates).
Castorama
Castorama total sales decreased by 4.8% (LFL -4.8%) to £2,219m, broadly in line with the market against a challenging consumer
backdrop. Sales trends slowed in H2 (LFL -7.3%), reflecting the weaker trading environment in that time period. Market weakness was
reflected broadly across the categories, with EPHC also lapping strong sales of heating and energy efficiency products in the prior
year. Volume trends year-on-year in core and ‘big-ticket’ categories improved in Q4, compared to Q3. Castorama’s e-commerce
sales increased by 4.9% year-on-year, with e-commerce sales penetration of 6% (FY 22/23: 5%; FY 19/20: 2%). As of 31 January 2024,
Castorama had a total of 95 stores in France.
Brico Dépôt
Brico Dépôt total sales decreased by 6.9% (LFL -7.1%) to £2,027 million, a weaker performance relative to Castorama. Performance in H1
was impacted by a reallocation of a portion of its marketing budget to digital, which proved unsuccessful and was corrected in mid-July.
Sales trends slowed in Q3 (LFL -10.6%) as the trading environment weakened, with Brico Dépôt more exposed than Castorama due to a
relatively higher category weighting towards building materials and EPHC, with plumbing, heating and insulation products also impacted
by milder weather and strong comparatives. Sales trends improved in Q4, notably in EPHC and bathroom & storage, with Brico Dépôt’s
sales broadly in line with the market (LFL -7.9%). For the year, e-commerce sales increased by 14.7%, the fastest first-party (1P)
e-commerce sales growth rate of all banners in the Group. E-commerce penetration reached 5% (FY 22/23: 4%; FY 19/20: 2%).
Brico Dépôt opened two stores during the year, with a total of 125 stores in France as of 31 January 2024.
Trading review by division continued
56 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Other International
Sales (£m) 2023/24 2022/23
% Reported
Change
% Constant
Currency
Change
% LFL
Change
Poland 1,694 1,734 (2.3)% (7.4)% (9.5)%
Iberia 371 373 (0.5)% (1.8)% (1.8)%
Romania 269 285 (5.6)% (6.4)% (3.3)%
Other
1
13 15 n/a n/a n/a
Other International 2,347 2,407 (2.5)% (6.5)% (7.7)%
Retail profit (£m)
Poland 82 148 (44.5)% (47.4)%
Iberia 6 9 (34.6)% (35.5)%
Romania (18) (10) n/a n/a
Other
1
(30) (30) n/a n/a
Turkey (50% JV) 15 8 n/a n/a
Other International 55 125 (56.0)% (57.5)%
Retail profit margin %
Poland 4.8% 8.5% (370)bps (370)bps
Other International 2.3% 5.2% (290)bps (280)bps
1. ‘Other’ consists of the consolidated results of Screwfix International, NeedHelp, and results from franchise and wholesale agreements.
Total sales decreased by 6.5% (LFL -7.7%) to £2,347 million, reflecting tough prior year comparatives across all geographies
(FY 22/23 LFL +11.2%). Retail profit decreased by 57.5% to £55 million (FY 22/23: £125 million, at reported rates), largely reflecting
the retail profit decline in Poland in H1 (£59 million). Retail profit margin % decreased by 280 basis points to 2.3% (FY 22/23: 5.2%,
at reported rates).
Poland
Total sales decreased by 7.4% (LFL -9.5%) to £1,694 million, against strong prior year comparatives (FY 22/23 LFL +13.8%) and a
challenging trading environment. Market weakness was reflected broadly across the categories, with EPHC lapping very strong
prior year comparatives. Sales trends improved in H2 (LFL -7.9%, versus H1 LFL -10.9%), supported by core category sales, and in
line with a gradual improvement in the consumer environment. The business exited the year with Q4 LFL of -6.6%, compared to the
‘trough’ second quarter of -11.5%, and sales trends have continued to improve into the new financial year. Castorama’s market share
remained above FY 21/22 levels for the full year and, on a year-on-year basis, gained share in Q4 (as measured by GfK). Castorama’s
e-commerce sales decreased by 32.6% year-on-year, following some temporary disruption arising from the implementation of its
new digital technology stack in H1. E-commerce sales penetration was 3% (FY 22/23: 5%; FY 19/20: 2%).
Space growth contributed c.2% to total Poland sales. Castorama opened five stores in FY 23/24 (three big-box, one medium-box and
one compact ‘Castorama Smart’ store), bringing its total to 102 stores in Poland as of 31 January 2024.
Gross margin % decreased by 20 basis points, reflecting higher customer participation in promotional activity and sales mix. This was
largely offset by effective management of inflation and supplier negotiations, and a lower stock provision movement compared to
the prior year. Gross margin % increased by 150 basis points year-on-year in H2. Retail profit decreased by 47.4% to £82 million
(FY 22/23: £148 million, at reported rates) due to a lower gross profit and an increase in operating costs. Despite adjusting variable
costs to the challenging environment and realising further savings from our structural cost reduction programme, operating costs
increased by 5.6%. This was driven by high cost inflation (including year-on-year increases in pay rates and energy costs), higher
technology spend, higher costs associated with five new store openings (year-on-year), and charges related to ineffective foreign
exchange hedges. In H2, the business strengthened its cost initiatives by further flexing staffing levels, lowering discretionary spend,
and rephasing certain investments (including fewer store openings), resulting in operating costs being limited to an increase of 1.7%
year-on-year. Retail profit margin % decreased by 370 basis points to 4.8% (FY 22/23: 8.5%, at reported rates), with the H2 retail
profit margin % improving sequentially to 5.8%, 80 basis points lower year-on-year (H2 22/23: 6.6%, at reported rates).
57Kingfisher 2023/24 Annual Report and Accounts
Other Information
Iberia
Total sales decreased by 1.8% (LFL -1.8%) to £371 million. Core and ‘big-ticket’ category sales were resilient (LFL -0.4%), while
seasonal categories (LFL -8.0%) were impacted by unseasonal weather from Q1 onwards. The development of Iberia’s trade
proposition supported good year-on-year growth in its building & joinery and kitchen categories. Retail profit decreased to
£6 million (FY 22/23: £9 million, at reported rates), reflecting lower sales and gross margin %, partially offset by lower operating
costs, down 0.8% year-on-year.
Romania
Total sales decreased by 6.4% to £269 million (LFL -3.3%), against strong prior year comparatives (FY 22/23 LFL +7.8%) and a
challenging trading environment. Sales trends improved in H2 (LFL -1.6% vs H1 -4.9%), driven by an improvement in core and seasonal
category sales, with LFL sales in Q4 slightly positive (+0.4%). Sales in the EPHC category were particularly strong, with a resilient
performance in outdoor and bathroom & storage. Romania’s retail loss increased to £18 million (FY 22/23: £10 million reported retail
loss), reflecting lower sales and gross margin %. Operating costs decreased by 3.1%, with cost inflation more than offset by our
structural cost reduction initiatives including reduced energy usage in stores.
Turkey
In Turkey, Kingfisher’s 50% joint venture, Koçtaş, contributed £15 million of retail profit (FY 22/23: £8 million, at reported rates). The
increase in retail profit largely reflects accounting under high inflation, and was more than offset by related higher interest rates
recorded in our share of Koçtaş’ interest and tax. The overall contribution of Koçtaş was therefore a net loss of £1 million (FY
22/23: £4 million net profit contribution). Net of store closures, the business added 13 new stores (one big-box and 12 compact) in
their financial year to 31 December 2023, bringing its total store count to 368.
‘Other’
‘Other’ consists of the consolidated results of Screwfix International, NeedHelp, and franchise and wholesale agreements. Due to
these businesses being in their early investment phase, a combined retail loss of £30 million (FY 22/23: £30 million reported retail loss)
was recorded, largely driven by Screwfix France as the business invested in the opening of new stores. Screwfix has a total of 20
stores in operation in France as of 31 January 2024, having opened 15 in FY 23/24. Sales from these stores continue to show an
encouraging trend, supported by an expanded product range of c.14k SKUs, and the launch of third-party trade credit and Sprint
one-hour home delivery. The business also launched as a pure-play online retailer in six additional European countries in Q3. As
reported in our half-year results in September, our two B&Q franchise stores in Saudi Arabia have now closed, and we are re-focusing
efforts on wholesale and franchise agreements in other markets. We currently have wholesale agreements in place in three countries
in Europe and the Middle East, whereby certain OEB products are supplied to its retailers.
Retail banner employees, store numbers and sales area
Employees
(FTE) at
31 Jan 2024
Store
numbers
at 31 Jan 2024
Sales area
1
(000s m
2
)
at 31 Jan 2024
B&Q 15,187 311 2,210
Screwfix 9,919 922 56
UK & Ireland 25,106 1,233 2,266
Castorama 9,878 95 1,153
Brico Dépôt 7,820 125 877
France 17,698 220 2,030
Poland 11,740 102 851
Iberia 1,804 31 195
Romania 2,178 32 230
Other
2
255 20 1
Other International 15,977 185 1,277
Total 58,781 1,638 5,573
1. Screwfix sales area relates to the front of counter area of an outlet.
2. ‘Other’ consists of Screwfix International, NeedHelp, and franchising and wholesaling.
Trading review by division continued
58 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Risks
Risk management
Effective risk management is critical to our ability to achieve our
strategic and operational objectives. Our banners and Group
functions work with the Group Risk team throughout the year to
ensure risk management processes are followed, which includes
reviewing and assessing the management of their respective
risks. While individual Group Executive members are accountable
for managing risks in their own area, the Group Executive
collectively identifies, assesses and manages the Group’s
principal risks. The Board regularly performs a robust risk
assessment to understand our principal risks and mitigating
controls and actions.
The governance framework and the role of the Board, Audit
Committee and Group Executive are set out from page 68.
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 risks. Our banners and Group functions help
us to identify changes to the risks within their operations. This
starts with a workshop involving all of the local leadership team,
discussing both existing and new risks. 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 and
non-executive directors, both individually and collectively.
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
the prior year.
To manage our risks ownership is assigned at all levels. Each
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. Management and mitigation plans are
developed by individual risk owners, who are members of the
local leadership team, before being validated by the respective
Group Executive member. They are supported in this by
dedicated risk and control managers.
To effectively monitor our risks local management regularly
reviews the effectiveness of its mitigation plans. 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.
During the year, the Audit Committee reviews the risk
assessment process and receives presentations from banners
and Group functions on a rotating basis. These presentations
cover risk assessments and mitigating actions, enabling the Audit
Committee to monitor the risks and level of controls in place.
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.
Risk appetite
The Group Risk team performed a comprehensive review of our
risk appetite in 2022 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.
This included reviewing activities and documenting a new
statement regarding the Group’s appetite in relation to the
opportunities from generative artificial intelligence (Gen AI)
tools. The update was presented to both our Group Executive
and Board.
Principal risks
Following a comprehensive review, our existing principal risks
remain broadly unchanged. The risks have been updated to
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:
— Geopolitical instability creating macroeconomic volatility.
— Cyber and data security.
— Responding to changing customer preferences.
We have removed our risk relating to the level and impact of
change. This risk originally related to the transformation required
under our current strategy. We have successfully implemented
the structural changes and demonstrated a good track record
of delivery.
Principal risks are shown on pages 60 to 64.
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 banners and Group functions. Alongside their risk
identification process, each area was asked to consider what
future risks they were concerned by, and what they were doing
to better understand them.
The reviews highlighted several potential emerging trends.
Where appropriate these have been incorporated into our
existing Group principal risks. Other trends are not deemed to
be fully emerging risks and more operational and we continue
to monitor these internally.
59Kingfisher 2023/24 Annual Report and Accounts
Other Information
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, retain and develop colleagues with
appropriate skills and capabilities could impact our ability to deliver
our strategic priorities and business objectives at the pace required.
We have set ambitious inclusion and diversity targets to promote
more innovation and creativity and to ensure Kingfisher is an inclusive
place to work. Failure to attract and retain colleagues to meet these
targets could have a negative impact on delivering our business
objectives and cause reputational damage.
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.
Major disruption to our supply chain, along with a failure to respond
quickly and effectively, could result in reduced levels of product
availability, with an adverse financial and reputational impact.
Risk trend
Competition remains high for diverse talent. We have made strong
progress on our Group-wide targets which we continue to drive through
our banners’ people strategies.
Link to strategic priorities
—
Grow by building on our different banners.
— 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.
Risk trend
Prior to recent events in the Red Sea, we had 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
—
Accelerate e-commerce through speed and choice.
— Differentiate and win through own exclusive brands (OEB).
— Develop our trade business.
— Human, agile and lean.
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, including
a focus on attracting, retaining, and developing their colleagues.
— 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.
— 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.
— Each banner closely monitors colleague sentiment through our
listening platform ‘Peakon’ and creates associated action plans to
improve colleague sentiment.
How we manage and monitor the risk
— Our supply and logistics three-year roadmap was updated in 2023/24.
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.
— Invested in supply chain visibility tools to be able to better monitor
products as they move through the supply chain and react to events.
A phased rollout of these tools is in progress across banners and
Group functions.
— 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 alternative
sources where possible, 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.
1
Our people
2
Supply chain resilience
Risks continued
Increasing No movement Decreasing
Risk trend:
60 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Our competitors include both traditional store-based and pure-play
online retailers. In recent years, we have seen an increase in online
penetration in the home improvement market, including through
e-commerce marketplaces. Competitors are also developing their
offers, including more products, services and fulfilment options.
Targeted actions or disruptive behaviour by competitors could
negatively impact our market share, the value of our assets and
our financial results.
Risk trend
Through executing our strategy and agile trading, we have defended and
in some regions expanded our market positions in a difficult overall
macroenvironment.
Link to strategic priorities
—
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).
— Develop our trade business.
— Roll out compact store formats.
How we manage and monitor the risk
We are building a differentiated offer and trialling new store
formats to serve customers even better 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.
— Leveraging the autonomy of local banners by allowing local ranges,
services and store formats that are tailored to customers’ needs.
— Tailoring trading actions to local markets, through distinct customer
communications, promotions and loyalty schemes to increase sales
and brand loyalty.
— Increased our online sales and are continuing to extend our online
presence; we have successfully launched e-commerce marketplaces
in the UK, Spain and Portugal and are developing this in other banners.
— Pursuing new revenue streams such as growing our retail media
proposition, currently just in France, across the wider Group.
— Competing on price by using the scale of our Group to benefit
from volume and lower purchase prices.
— Centrally developing our OEB brands, with clearly defined range
principles and customer projects to create a differentiated and
compelling offer.
We regularly monitor our market share, our performance and that
of our competitors, to react quickly to disruptive behaviour 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 promoter scores (NPS) with targets to improve the
customer experience and satisfaction.
3
Competitor behaviour
Kingfisher operates in eight countries across Europe and relies on a
global supply base exposing us to both geopolitical uncertainty and
local volatility. Strikes or challenges to international trade could impact
our ability to receive products, limit the availability of certain raw
materials or increase costs. Failure to anticipate events or respond
appropriately could disrupt day-to-day operations and/or our ability
to meet our strategic objectives.
Spending pressure and reduced consumer confidence as a result of a
continuing difficult economic environment and political volatility could
negatively impact the demand for our products and services. If
governments try to reduce their budget deficits through further
taxation, this could create additional burdens on businesses.
Risk trend
The economic environment is likely to remain challenging across all our
markets. There are also several upcoming national elections in countries
we operate in as well as other elections of global consequence that could
impact our economies or supply chains.
Link to strategic priorities
—
Grow by building on our different banners.
— Accelerate e-commerce through speed and choice.
— Differentiate and win through own exclusive brands (OEB).
How we manage and monitor the risk
Monitoring and engagement activities
—
Our Group 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 engage with proposed
changes to legislation that may impact our business.
— Incident and crisis management processes and teams are in place to
monitor and manage situations as they arise.
— We actively monitor our sourcing from and dependency on large
suppliers by region.
Mitigation activities
—
Our banner and Group sourcing offices work to diversify our sourcing
options where appropriate. Our buying offices and supply chain teams
are focused on ensuring we maintain appropriate levels of
competitively priced product available from alternative sources
through periods of potential disruption.
— 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 an agile, flexible way to changes in the environment.
— Our OEB, which represent 45% of our sales, offer particularly
great value for customers in all our banners.
— 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.
4
Geopolitical instability creating
macroeconomicvolatility
Increasing No movement Decreasing
Risk trend:
61Kingfisher 2023/24 Annual Report and Accounts
Other Information
Cyberattacks and security incidents continue to present a risk for
organisations. We proactively manage our risk profile and will continue to
do so as we deliver on our strategy and as our use of technology evolves.
Gen AI tools have become more widely accessible recently. Whilst these
present great opportunities for innovation and growth, they could also be
used maliciously by bad actors to create more compelling phishing attacks.
If public Gen AI services are used, there is a risk that commercially
sensitive information may be inadvertently made public increasing the risk
of data loss.
Failure to protect data, detect breaches and respond accordingly
would negatively impact our operations, profitability and reputation.
The Group’s operations are subject to a broad range of regulatory
requirements in the markets in which we operate, and new regulation
continues to emerge. 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.
Risk trend
This risk remains one of our top three risks. The sophistication and
organisation of cyberattacks continues to evolve, with a wide range of
tools and techniques available to cause disruption to our business. In
particular, Gen AI tools are being used more in this sphere.
Link to strategic priorities
—
Accelerate e-commerce through speed and choice.
— Build a data-led customer experience.
Risk trend
Link to strategic priorities
—
Lead the industry in Responsible Business and energy efficiency.
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.
— Assessments and exercises held to prepare for security incidents up
to and including Board-level.
— Recognising the importance of the role our colleagues play
in protecting the organisation, we are upskilling by delivering an
education and awareness strategy tailored to roles and
responsibilities. Phishing awareness campaigns run for all colleagues
with internally run mock campaigns to test effectiveness.
— A Gen AI policy was created this year, with training rolled out to all
colleagues.
— 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.
— Regular review of the cyber threats facing Kingfisher and work with
security partners to evaluate and implement appropriate controls.
— Increased use of AI to strengthen existing technology capability (e.g.
end point protection and mail filtering) to protect us against phishing,
malware and other threats.
— Robust major incident management process in place, and we
maintain a third-party retainer for incident response, breach,
and forensic expertise.
— Commissioned continuous independent assurance to monitor
progress against our strategy and to ensure we meet our
maturity milestones.
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, Market Abuse Regulation
and, from 2024, a new module on Gen AI.
Oversight and reporting
—
Our legal and compliance network is well established, for teams in the
Group and banners to work and communicate together, and to
monitor for legislative changes that would impact our business, so
that we can respond appropriately.
— 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.
5
Cyber and data security
6
Legal and regulatory
Risks continued
Increasing No movement Decreasing
Risk trend:
62 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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, how we bring greater diversity into
the business and support our local communities. We also expect
everyone working for us or with us to carry out our business
professionally, fairly and with complete integrity. For further details
see pages 24 to 27 of the Responsible Business section.
Failure to deliver on our obligations and commitments, material
breaches of our policies or controls, or unintentional controversial
statements, could undermine trust in Kingfisher, damage our
reputation and impact our ability to meet our strategic objectives.
Climate change will have negative consequences on society and
businesses without concerted mitigation efforts. The climate scenario
analysis in our TCFD section has 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. The analysis shows the top three risks being
consumer preference changes, liability costs from third-parties and
the cost of carbon increasing. See page 35 of the TCFD section for
more information and for the other risks.
In response to these challenges, we have a number of mitigation
actions including setting ambitious climate change commitments.
Failure to deliver on our commitments could negatively impact our
operations, profitability over time, as well as causing reputational damage.
Risk trend
The level of scrutiny and expectations from our stakeholders remains
high. and the opportunity to provide an effective response is often
limited. It is also becoming increasingly challenging for businesses to stay
neutral on sensitive topics and if they choose to respond, to get the
messaging right and avoid alienating a significant portion of stakeholders.
Link to strategic priorities
—
Lead the industry in Responsible Business and energy efficiency.
— Human, agile and lean.
Risk trend
Scrutiny on the validity and reliability of our response to climate-related
risks remains high and the risk position has not changed. However, as the
climate scenario analysis was expanded to cover more risks this year, we
have refocused our principal risk on the most significant elements (see
page 35 of the TCFD section).
Link to strategic priorities
—
Differentiate and win through own exclusive brands (OEB).
— Lead the industry in Responsible Business and energy efficiency.
How we manage and monitor the risk
Governance
—
Our Code of Conduct establishes the core behaviours we expect of
ourselves and others, including our suppliers.
— 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 CEO.
— We are evolving our framework for responding to societal and
geopolitical issues and also have specific policies relating to
corporate affairs and external communications.
Stakeholder dialogue
—
Monitoring of external stakeholders’ views of the Group and all
banners through traditional and digital media.
— For all colleagues we have regular engagement surveys, strong
relations with relevant social partners and colleague fora with elected
representatives, including a collective forum that meets with the CEO
and members of the Board. This is in addition to our I&D affinity
networks that facilitate debate and discussion on sensitive issues.
— Externally, we have regular engagement with a range of stakeholders
including NGO partners, trade associations, politicians, civil servants,
media, etc. 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.
— Selected ESG data in our annual Responsible Business Report and
our 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.
How we manage and monitor the risk
— We have a longstanding commitment to reduce our emissions, with
science-based targets for FY 25/26 across all scopes, a commitment
to reach net zero emissions for our operations (scope 1 and 2) by the
end of FY 40/41 and we are working to develop our net zero climate
transition plan for scope 3.
— For governance the Group Climate Committee, chaired by the CEO,
has oversight of the company’s approach to developing and
delivering its net zero roadmap and related supporting targets and
opportunities, and the Board’s Responsible Business Committee
supports and oversees the delivery of the Group’s Responsible
Business strategy, including how we tackle climate change.
— Decarbonisation planning is integrated into each banner’s capital
investment plans.
— We have 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 outturn of our Performance Share Plan.
— We have a Sustainable Home Products (SHP) sales target,
to maximise business opportunities from the transition to a net zero
future. We have set a target for SHP to account for 60% of Group
sales by the end of FY 25/26 and 70% of sales of OEB products.
— We support a number of industry initiatives to tackle climate change,
most recently this has included helping to launch a critical new
collaborative scope 3 taskforce, initiated by EDRA/GHIN (the global
trade bodies for home improvement retailers).
For further information on how we continue to understand and respond
to these risks, see pages 35 to 38 of the TCFD section.
7
Reputation and trust
8
Climate change
Increasing No movement Decreasing
Risk trend:
63Kingfisher 2023/24 Annual Report and Accounts
Other Information
The pace of change remains high, with greater use of e-commerce
solutions for Click & Collect and home delivery and increasing customer
demand for greater choice. 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, located where consumers
want to shop, with in-store services. We are also seeing increased demand
for more sustainable products, with greater attention to their energy and
water saving features and their overall environmental impact.
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.
Risk trend
Our commercial operating model affords banners autonomy, allowing
them to rapidly identify and react to changes in customer trends.
However, the risk remains that we do not deliver the required changes
fast enough or that they are not sufficiently compelling for our
customers. We continue to invest in our technology and other solutions
to further support the banners adapting at pace to keep and stay ahead
of customer preferences. We similarly continue to invest in our
Sustainable Home Products to meet changed customer preferences.
For further information on our approach to sustainable products see the
climate change risk on page 63.
Link to strategic priorities
—
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).
— Develop our trade business.
— Roll out compact store formats.
— Lead the industry in Responsible Business and energy efficiency.
— Human, agile and lean.
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 and data strategy has been developed and approved
by the Board, with various priority programmes underway.
— Our 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, France and Poland.
— 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. Through exhaustive
benchmarking of our e-commerce platforms capabilities against our
competitors, key areas of opportunities are identified including to site
speed, distribution order management (DOM) and customer
recommendations.
— Continued to develop our understanding of compact store formats,
with a variety of test concepts live in a range of locations across the
UK, France and Poland. As of 31 January 2024, we had 27 compact
store tests across five banners, providing us with strong learnings for
format optimisation and conceptualisation.
— Our product offer serves both tradespeople and home improvers,
which helps us proactively guard against any shifts in consumer
behaviour across both DIY and DIFM sectors.
9
Responding to changing customer preferences
Risks continued
Increasing No movement Decreasing
Risk trend:
64 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Assessment period
The directors consider 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 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 (RCF) 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 current and future
financial position, its recent and historical financial performance, and
forecasts against the strategy, business model and principal risks
described on pages 60 to 64. In addition, the directors regularly
review the financing position of the Group and its projected funding
position and requirements, including sensitivity analyses.
The Group is operationally and financially strong and has a long
track record of consistently generating profits and cash, which is
expected to continue both in the short and long term.
1
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 are
continuing to expand our Screwfix footprint in France and
Screwfix online has launched in six new European markets.
E-commerce sales have grown, supported by continued
strong growth of our marketplace in B&Q and more recently
Iberia, 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. Our strong omnichannel proposition
aligns with how customers want to shop in our segment. We
remain confident in both our long-term growth and cash
generation opportunities.
— The inherent resilience of the Group’s activities. The
Group operates in diverse geographies and customer
segments, with strong competitive positions. Many of our
products are of an essential nature. We have balanced
exposure to both DIY and DIFM sides of the market 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. The
economic environment looks to remain challenging in the
near future. Interest rates remain high and there is a risk of
continued inflationary pressure. However, we remain very
positive for home improvement growth and our ability to
grow ahead of our markets, with a high proportion of sales
relating to maintenance and repair. Demand from
tradespeople remains robust with more work in the pipeline.
In addition, industry trends, including investments in
sustainability, working from home and a greater interest in
the market from younger generations 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 2024, Kingfisher
had access to over £900 million of liquidity, comprising cash
and cash equivalents (net of bank overdrafts) of £353 million
and access to an undrawn RCF of £550 million (£46 million
expiring at the end of May 2025, £504 million expiring at the
end of May 2026). 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. The Board considers this
headroom, coupled with the highly cash generative nature
of the business, to provide a strong degree of financial
resilience and flexibility.
— Supplier and supply chain resilience. 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). We have developed and
are implementing a supply chain visibility tool to get more
upstream visibility of our supply chain. We have also
launched an import demand programme, aimed at reducing
lead times and inventory levels.
— Climate change. We have continued to see strong sales of
energy efficient products, helping our customers reduce
their carbon footprints. We recently launched our Green
Star initiative, helping customers navigate products with a
reduced environmental impact. 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 that 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 have modelled several severe but
plausible scenarios which would have the most material impact
on our liquidity. These were identified by considering how our
principal risks could materialise either individually or in combination,
impacting the business both operationally and financially.
Viability statement
1. 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.
65Kingfisher 2023/24 Annual Report and Accounts
Other Information
In total, four severe but plausible individual scenarios have
been modelled in addition to a fifth ‘collective’ scenario. The latter
considers the combined impact of scenarios 1, 3 and 4 detailed
below, to model a worst-case 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 a material difference to the results.
The legal and regulatory risk was not specifically modelled as it
could result in a significant financial penalty and related financial
pressure similar to scenario 1 (demand/operational shock). An
aspect of climate change has been modelled in scenario 2
(production and supply chain disruption) but it should be noted
that the additional investments being made to realise our climate
targets are already included in the base financial projections used.
None of the scenarios modelled, including the more extreme and
unlikely aggregated scenario, were found to impact the long-
term viability of the Group over the assessment period. In
assessing 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; and
— temporary suspension of dividend payments or share
buybacks.
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
operationaldisruption resulting in reduced sales for a period of time (e.g. a failure ofourglobal IT
infrastructure, with operational and/or reputational damage).
Assumptions
Sales: Reduced sales during our peak period, followed by a short period of recovery before returning to prior
levels.
Margin: Margin impacted by the loss of sales and 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 4: Geopolitical instability
creating macroeconomic
volatility.
Risk 5: Cyber and data
security.
Risk 7: Reputation and trust.
Scenario 2 – Production and supply chain disruption
Our suppliers and supply chain continue to be affected through 2024/25 and into 2025/26 by an event which
impacts 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
volumeson key ranges.
Assumptions
Sales: Negative sales impact with smaller stores most affected (more limited range depth so fewer
alternatives).
Margin: Negative impact of the loss of sales and increased shipping and transportation costs.
Risk 2: Supply chain
resilience.
Risk 4: Geopolitical instability
creating macroeconomic
volatility.
Risk 8: 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
andlower spending. Customers become more price sensitive and price reductions impacting margins are
required tomanage overstocks. Suppliers of key ranges default on their supply commitments.
Assumptions
Sales: Year-on-year sales reduction for a period of 12 months followed by recovery to initial level and then
back togrowth.
Margin: Margin reduction from lower sales and pricing pressure for a period of 24 months followed by
recovery in the third year.
Risk 4: 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 3: Competitor
behaviour.
Risk 9: 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
furthereconomic downturn. At the same time, our strategy fails to deliver the planned benefits. This is seen
as aworst-case scenario and highly unlikely.
As indicated in the above
scenarios.
Viability statement continued
66 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Going concern
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 60 to 64. The financial position of the
Group, its cash flows, liquidity position and borrowing facilities
are described in the financial review on pages 48 to 54. 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.
Strategic Report approval
The Strategic Report was approved by a duly
authorised Committee of the Board of Directors on
24 March 2024 and signed on its behalf by:
Thierry Garnier
Chief Executive Officer
24 March 2024
67Kingfisher 2023/24 Annual Report and Accounts
Corporate governance
Through the Nomination Committee, we regularly review the
skills, composition and diversity of the Board to ensure that we
have the right mix of talents to support our strategic ambitions
and when setting the search criteria for any new non-executive
director role. The Committee’s review during 2023 identified
digital commercial experience as a future preferred
characteristic. You can read more about the selection and
appointment process for new Board members on page 75.
Finally, I would once again like to thank my fellow directors for all
their efforts in supporting the executives 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
our stakeholders over the long-term and allow us to remain agile
in the face of emerging challenges.
Andrew Cosslett
Chair of the Board
24 March 2024
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.
Our governance structure
Our structured framework comprises the Board and its committees, and 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 75.
Remuneration
Committee
Ensures rewards
are linked to our
wider strategy and
recognises success.
Report can be found
from page 84.
Responsible
Business
Committee
Oversees delivery
of our Responsible
Business activities,
providing collective
advice and support.
Report can be found
from page 78 with
additional reporting
from page 24.
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80.
Group Executive
Comprises the CEO and his direct reports, including the CFO, 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.
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 and net zero roadmap. Oversees our external reporting
on climate-related matters and assesses and manages our climate-related risks and opportunities.
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, better lives, for everyone. This report
describes the 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.
The underlying trading environment remains challenging in some
of our markets. Against this backdrop, your Board continues to
balance its time between supporting the executives to drive
efficiencies in the Group’s operating model to mitigate near-
term headwinds, whilst focusing on the key strategic growth
drivers that will deliver long-term financial performance.
During the year, the Board gave detailed consideration to
succession planning for executive and non-executive board
roles alike recognising that some Directors are in, or are
approaching, their third three-year term of appointment to the
Board. You can read more about the Board succession planning
process on page 75.
68 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
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 in advance. Detail regarding
information flows to the directors can be found in the Corporate
Governance Statement on our website www.kingfisher.com/
corporategovernance and on page 74.
Current directors Board
Andrew Cosslett 8/8
Claudia Arney 8/8
Bernard Bot 8/8
Catherine Bradley 8/8
Jeff Carr 8/8
Thierry Garnier 8/8
Sophie Gasperment 8/8
Rakhi Goss-Custard 8/8
Bill Lennie 8/8
In addition to the scheduled meetings reflected in the table
above, two ad hoc Board meetings were held during the year.
The Board’s annual November one-day strategy session was
also exceptionally held as a standalone meeting in 2023.
Compliance with the UK Corporate
Governance Code
Kingfisher complied with the Financial Reporting Council (FRC)
2018 UK Corporate Governance Code (the Code) during the
year ended 31 January 2024. Legacy Delivering Value Incentive
awards which predate the current Directors’ Remuneration
Policy (the Policy) adopted at the 2022 AGM do not have phased
vesting and did not comply with Provision 36 at the time of grant.
Further details of these awards can be found on page99. The Code is
available to view at www.frc.org.uk
At the company’s 2023 AGM, the Board was pleased to see a
high level of engagement from shareholders with nearly 90 per
cent of shares in issue being voted and all resolutions passed by
poll by the requisite majority. However, the Board also noted that
there were 21.54% of votes cast against Resolution 19 (Authority
to disapply pre-emption rights for an additional 10 per cent).
In accordance with the Code, the company has consulted with
its major shareholders and understands that some, as a matter
of policy, do not support resolutions giving companies a general
authority to disapply pre-emption rights without further approval
from shareholders. The Board notes that the authorities
requested were, however, consistent with the Pre-Emption
Group’s Statement of Principles.
The Company will continue to take into account the views of its
shareholders and will keep the authority sought under review.
The table below outlines how Kingfisher applied the principles
and complied with the provisions of the Code which may also
befound in the Corporate Governance Statement (CGS) at
www.kingfisher.com/corporategovernance. Our website also
has copies of the company’s Articles of Association, Matters
Reserved for the Board, terms of reference of the Board
committees, as well as role profiles for the Chair, the CEO, the
Senior Independent Director, a non-executive director, and the
Company Secretary.
Page no. or document
1. Board leadership and company purpose
Effective and entrepreneurial Board
17 – 23, 44-47, 59 – 67
CGS, Matters Reserved
Purpose, value and strategy CGS
Resources and controls CGS
Engagement with stakeholders 17 – 23, CGS
Workforce policies and practices 14 – 16, 26 – 27, CGS
2. Division of responsibilities
Role of the Chair CGS, role profiles
Composition of the Board 70 -71, CGS
Role of the non-executive director CGS, role profiles
Board information, time and resource 68, 74, 75-77, CGS
3. Composition, succession and evaluation
Appointment to the Board 75 – 77, CGS
Board composition 70 – 72, 75 – 77, CGS
Board evaluation 74, CGS
4. Audit, risk and internal control
Internal and external audit functions 82 – 83, CGS
Fair, balanced and understandable 80, 113, CGS
Risk management 59 – 64, 82 – 83, CGS
5. Remuneration
Aligning remuneration to strategy 84 – 109, CGS
Policy for executive remuneration 88 – 95, CGS
Independent judgement 96, CGS
69
Kingfisher 2023/24 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.
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 and the president of EDRA/GHIN, the European DIY
Retail Association and the Global Home Improvement Network.
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
non-executive director 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 is due to step down from the
Board of Derwent on 10 May 2024 after nine years as a Director.
Claudia 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
of easyJet plc where she chairs its finance committee. She
is also currently a non-executive director and chair of the
nomination and corporate governance committee at Johnson
Electric Holdings Limited, a Hong Kong listed company, and
abrdn plc where she is chair of the audit committee, and chair
of its wholly-owned subsidiary Interactive Investor Limited.
Catherine is due to step down from the Board of abrdn plc
at its upcoming AGM on 24 April 2024. She will remain chair
of Interactive Investor Limited.
Key:
Chair Audit Committee Nomination Committee Remuneration Committee Responsible Business Committee
70 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
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. He is due to retire from the Board of Reckitt
Benckiser on 31 March 2024. Jeff has been appointed as a
non-executive director of Tate & Lyle plc with effect from
1 April 2024.
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., an independent director of Société
Anonyme de Participation et de Gestion (SPDG) and a non-
executive director 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 and
Rightmove plc.
External appointments: Rakhi is a non-executive director of
Schroders plc. She is also a non-executive director of Trainline
plc where she chairs the remuneration committee.
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
71Kingfisher 2023/24 Annual Report and Accounts
Board nationality
Dutch
1
US
2
French
3
British
3
Board diversity and ethnicity is set out on page 76
Board tenure
Current directors Tenure at 31 January 2024
0-3 years 3-6 years 6-9 years
Andrew Cosslett
6 years, 10 months
Thierry Garnier
4 years, 4 months
Bernard Bot
4 years, 4 months
Claudia Arney
5 years, 3 months
Catherine Bradley
3 years, 3 months
Jeff Carr
5 years, 8 months
Sophie Gasperment
5 years, 2 months
Rakhi Goss-Custard
8 years
Bill Lennie
1 years, 9 months
1. To be counted for each skill area, a director is either required to have sustained executive or senior management experience, or meaningful non-executive
experience.
2. Experience of multi-divisional/business unit model with responsibilities split across regions and the centre.
Board composition
Board independence Director sector experience
1
78%
22%
4
5
6
7
2
3
9
4
4
5
4
Executive directors
Independent non-executive directors
Retail
Digital
International markets
Former CEO
Brand/marketing
Listed market experience
Remuneration/HR
Matrix-model business
2
Home improvement sector
Finance
Sustainability
72 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Board activities
Key activities of the Kingfisher plc Board in the year
Strategy
S.172 considerations:
1
2
3
4
5
6
— Monitored delivery of the ‘Powered by Kingfisher’ strategic objectives and priorities.
— Discussed a broad selection of potential longer-term strategic options and growth drivers to build on the
‘Powered by Kingfisher’ strategy and drive financial performance.
— Considered the trends and factors that are driving change across home improvement and retail more broadly.
— Assessed the impact of e-commerce on the Group’s strategy given the continued shift online, highlighting
e-commerce as imperative for growth, and endorsed the Marketplace rollout roadmap and order of launch.
— Reviewed the competitive position across the Group’s markets and what it means for banner-level ambitions.
— Approved a joint-purchasing partnership with Mr. Bricolage in France.
— Approved the acquisition of the trading assets of Connect Distribution Services Limited by Screwfix
Spares Limited.
Finance and
performance
S.172 considerations:
1
3
6
— Reviewed Kingfisher’s progress through the CEO and CFO’s reports, including:
— Approval of adjustment to full year PBT guidance (as reported in the Q3 Trading update);
— market and trading updates and guidance, 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.
— Approved an extension to the Group’s Revolving Credit Facility.
People, culture,
vision and values
S.172 considerations:
2
3
4
— Non-executive directors spent time with colleagues in stores and in banner offices to enhance their
understanding and see firsthand the culture embedded across the Group.
— Endorsed the 2022/23 Responsible Business Report for publication.
— Reviewed progress against the inclusion and diversity pillars and the key priorities for 2023/24, including
the launch and monitoring of the ‘Together. Stronger’ allyship campaign. This included allyship training being
made available to the directors.
— Received regular reports and 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.
— Reviewed the Group Executive and senior management review findings, and endorsed the 2023/24
Talent and Succession plan.
— Received updates on the community investments made during 2023/24.
Governance and
risk
S.172 considerations:
2
3
4
5
— Received defence planning and Group valuation updates supported by our brokers and corporate advisors.
— Reviewed feedback from investor and governance roadshows.
— Held an in-person AGM and engaged with major shareholders on their reasons for voting against certain
authorities requested to disapply pre-emption rights.
— Reviewed the results and action plans resulting from the annual supplier survey.
— Considered the resilience of the Group’s supply chain in the context of geopolitical events, including
mitigation plans.
— Considered capital expenditure and investment decisions taken by the Group Investment Committee.
— Approved:
— the Modern Slavery Transparency Statement;
— the Group’s principal and emerging risks and risk appetite statement; and
— revisions to the Group’s Delegation of Authority Policy.
— Received annual updates on the Group’s pensions and insurance arrangements.
— Considered whistleblowing reported across the Group.
— Evaluated the Board’s performance in 2023/24 and monitored progress against the actions arising from
the external 2022/23 evaluation.
Key
1
Long-term impact
2
Interests of colleagues
3
Fostering business relationships
4
Impact on community and environment
5
Maintaining reputation for high standards of business conduct
6
Acting fairly between members
73Kingfisher 2023/24 Annual Report and Accounts
Board effectiveness
2023/24 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.
Following an external evaluation process in 2022, this year’s
evaluation was conducted internally using the Better Boards
platform. The questionnaire was tailored by the Chair and
Company Secretary and covered the performance of the Board
and its Committees and included a new component which allowed
for individual feedback for each of the directors. Responses were
benchmarked against data available through the platform.
A detailed report was prepared by the Company Secretary and
considered by the Board along with progress against last year’s
actions. Directors concluded that the Board is working well and
benefits from the trusted relationship between the Board and
Executive Leadership and stability in the commercial model,
credited in part to the recruitment of the CEO, Thierry Garnier in
2019. The Board determined to build on this established position
through the following findings and actions to make best use of
directors’ time and the value they can bring to Kingfisher:
Finding Action plan for 2024/25
Joint vision and
alignment around the
goals and focus of the
Board
— Review the forward plan and potentially
refine the Board’s focus on fewer topics,
critical to business and strategic
performance.
Further improve the
structure and
organisation of the
work of the Board
— Rationalise the annual cycle of Board
events and conclude each scheduled
Board meeting with a non-executive
director-only discussion.
— Redefine expectations and reinforce
meeting discipline to reduce the overall
weight of Board materials and allocate
the majority of meeting time to
questions and discussion.
The Chair met with each director, supported by the tailored
reporting following the Board review to drive further
improvements in Board performance in 2024. Catherine Bradley
received separate reporting regarding the outcome of the
Chair’s evaluation and based on the review and discussion with
other Board members, it was concluded that the Chair continued
to operate effectively and that there were no concerns
regarding his performance.
2022/23 External evaluation progress update
The table below outlines progress against actions agreed during the 2022/23 external evaluation.
Finding Progress update
Keep under review the key drivers of
long-term growth.
In July, the Board endorsed strategic plans – aligned with the ‘Powered by Kingfisher’ strategy
for Castorama France, Brico Dépôt Romania and Screwfix International, during its mid-year
strategic review.
In November, the Board held a strategy day to consider Vision 2023, including a broad
selection of potential longer-term strategic options and growth drivers beyond the company’s
usual three-year planning period. This included an assessment of the main trends driving
change across home improvement and retail sectors, along with the opportunities for growth
in key markets. At its January meeting, the Board endorsed a number of initiatives to
accelerate the strategic plan for Castorama France, including a review of the store network
and improvements to the efficiency of the operating model. The Board also received periodic
deep-dives and quarterly performance updates on strategic KPIs.
Make further improvements to the
informationcoming to the Board.
Enhancements were made to the guidance given to authors of Board papers to ensure that
materials are succinct and allow sufficient time for a discussion of key topics. This has resulted
in a reduction of more than 10 per cent in the average Board pack size when compared with
the prior year.
Increase the Board’s visibility of our
peopleandculture.
Non-executive directors spent additional time this year in different parts of the business,
visiting operational sites and meeting with colleagues below senior management level. These
visits have included:
— Brico Dépôt, Longpont
— Castorama, Warsaw
— B&Q, Dartford
— Screwfix Head Office, Yeovil
— Digital & Technology, London
— Kingfisher Colleague Forum events
— Screwfix LIVE, Farnborough
Non-executive directors wrote short summaries of their findings which were included in
subsequent Board packs.
In addition to the Board meetings held in Lille and Warsaw which included time with local
management teams, the Board also held a number of ‘teach-in’ sessions which have enabled
Board members to meet a range of colleagues across the business whilst enhancing
understanding in key areas, including trade proposition, Generative AI and small store concepts.
74
Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
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
24 March 2024
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. During the
year, the Committee agreed the addition of 'sustainability' as an
area of expertise the Board wish to monitor in the context of the
skills and experience matrix.
The skills of our directors are summarised on page 72, including those
considered to possess 'sustainability' expertise.
Selection and appointment of Board
members
During the year, the Committee initiated a search process for
a new non-executive director role to bring additional digital
commercial experience to the Board. An outline of the process
followed by the Committee when conducting a search for a new
director role is set out below.
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 coordinate 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 considering 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 multi-stage interview process, every effort is made to
ensure that prospective candidates meet with all directors, by
committee where appropriate. Initial interviews will include the Chair,
CEO and SID and will be flexed as appropriate for the role in question.
After the first round of interviews, it is agreed which candidates should
be invited to participate in subsequent interview rounds.
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, our retained
search consultants, for the selection and appointment of Board
members. Egon Zehnder is an accredited firm under the UK
Government’s Enhanced Code ofConduct for Executive Search
Firms and a signatory to the latest Standard Voluntary Code of
Conduct for Executive Search Firms (the Voluntary Code),
supporting gender andethnic diversity on corporate boards.
Egon Zehnder do not have any other relationship with the
company or its directors.
Membership and attendance
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 3 3
1. Chair of the Committee.
The Nomination Committee solely comprises 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.
During the year, an internal evaluation of the Committee’s
effectiveness was undertaken as part of the broader
evaluation of Board performance. 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 74.
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 74 . During the year, the
Committee considered the Board’s succession needs, including
the current size of the Board, the skills, tenure, and diversity of
its makeup and, the experience and competencies that may
potentially be additive in the context of the ‘Powered by
Kingfisher’ strategy. In June 2023, the Committee agreed the
appointment of Sophie Gasperment to the Remuneration
Committee and noted that Andrew Cosslett would step down
as a member in parallel.
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
detailed consideration of the succession plans in place for
executive and key senior leadership roles, including the CEO
and CFO, as well as potential initiatives to strengthen its pipeline.
75Kingfisher 2023/24 Annual Report and Accounts
Other Information
Nomination Committee report continued
Statement on Board diversity targets
The Policy objectives align with the targets set out in the FCA
Listing Rule 9.8.6R(9) and the Committee is pleased to confirm
that as at 31 January 2024 all three of the targets setoutwithin
the Policy and the Listing Rules have been met, asoutlined below.
— Maintain at least 40% female directors on the Kingfisher plc
Board. Target met; 44% of Board directors are women.
— Maintain at least one woman in a senior Board position
(Chair, Chief Executive Officer, Senior Independent
Director, or Chief Financial Officer). Target met; our
Senior Independent Director is a woman.
— Maintain at least one Board director from an ethnic minority
background. Target met; one Board director is from an
ethnic minority background.
In accordance with the Listing Rules, numerical data on the
gender
1
and ethnic diversity of the Board and executive
management
2
is set out below.
Gender and ethnicity data reported below was collected directly
from Board and executive management members via a secure
questionnaire using the categories listed in the tables below as
at 31 January 2024. The data was processed and retained in
accordance with the Group’s Data Protection Policy .
Data protection laws in certain jurisdictions have prevented the
collection of data on ethnicity for certain Board and executive
management members who are resident in those jurisdictions.
Those individuals have been recorded in the ‘not specified’
category for the disclosure on ethnic background.
Gender (sex) as at 31 January 2024
Number of
Board
members
Percentage
of the board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and
Chair)
Number in
executive
management
Percentage
of executive
management
Man 5 55.5% 3 8 66.6%
Woman 4 44.4% 1 4 33.3%
Not
specified/
prefer not to
say
- - - - -
1. The data reported is on the basis of sex.
2. Per the definition within the Listing Rules, executive management is defined
as the Group Executive and the Group Company Secretary.
Induction
Each new director receives a tailored induction to help establish
a clear understanding of the company’s operations and
challenges, aspirations, governance and culture. Delivery is
phased so that the induction can be customised at each step
based on the individual director’s 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 banners, and may
also include 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.
— Introduction and ongoing access to the Board’s online
resources, including to meeting minutes, key governance
and 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. Kingfisher’s Group-
widePeople and Culture Plan is set out on pages 14 to 16,
including the gender diversity of senior management and
colleagues; the Committee supports the work undertaken
bymanagement to strengthen gender and ethnic diversity in
leadership which continues to be a priority for the company.
The Kingfisher Board believes 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 benefits overall board composition, board
effectiveness and decision-making.
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 work style. 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. Kingfisher’s Board Inclusion
and Diversity Policy (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 annually.
ThePolicy is available on our website.
76 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Ethnic background as at 31 January 2024
Number of Board
members
Percentage of
the Board
Number of
senior positions
on the board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including minority-white groups) 7 77.7% 3 10 83.3%
Mixed/Multiple Ethnic Groups - - - - -
Asian/Asian British 1 11.1% - 1 8.3%
Black/African/Caribbean/Black British - - - - -
Other ethnic group, including Arab - - - - -
Not specified/ prefer not to say 1 11.1% - 1 8.3%
Our approach to collecting data more broadly for employees
including senior leadership across the Group is set out in the
people and culture section on page 16.
As well as the Listing Rules Board diversity targets, the Board
continued to meet the targets of the FTSE Women Leaders
Review and since 2016, the Parker Review targets on ethnic
diversity (as required for the relevant year). The Committee
continues to support the 2023 recommendations of the Parker
Review and, during the year, endorsed a new target for senior
management positions that will be occupied by ethnic minority
executives by December 2027.
In alignment with the Parker Review, we have set a milestone
target of 12.5% ethnic diversity in the Group Executive and their
direct reports based in the UK (and on UK contracts) by 2027.
We have used our own definition of senior leadership as Parker
permits, taking into account local practices and legislation
requirements. Currently this group is 8% ethnically diverse,
based on self-identification against UK ONS categories.
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 our larger
shareholders, as well as their attendance rate at Board and
relevant Committee meetings. Having due regard to their
performance and ability, contribution to the company’s long-
term sustainable success and the need for progressive
refreshing of the Board, the Committee also considered and
recommended for re-election to the Board, those Directors
who wish to stand at the 2024 AGM. 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 69, 75, 78, 80 and 84 of this report.
In line with directors’ appointment terms, the Board considers
existing time commitments before approving new appointments,
and directors give careful and ongoing consideration to their
external time commitments to ensure that they can devote
an appropriate amount of time to their role at Kingfisher.
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 2024/25
— Continued focus on succession planning at the Group
Executive level and monitor initiatives to support the
development of the Group’s pipeline for executives
and senior leadership.
— Support the delivery of the Board Inclusion and Diversity
policy and objectives which have been aligned with the
recommendations of the 2023 iterations of the FTSE
Women Leaders and Parker reviews, respectively.
— Continue to support Board-level inclusion and diversity
throughout the succession planning process.
77Kingfisher 2023/24 Annual Report and Accounts
Other Information
Responsible Business Committee report
Dear Shareholder,
The Responsible Business Committee supports and oversees the
delivery of the Group’s Responsible Business strategy, an integral
part of ‘Powered by Kingfisher’. Further detail on our Responsible
Business strategy is set out on pages 24 to 27 and in the
Responsible Business Report available on the company’s website.
The Committee champions Kingfisher to deliver on our ambition
to lead the industry in Responsible Business practices, ensuring
that it is robust, transparent, accountable, and integrated into our
governance. This includes monitoring performance against the
Responsible Business priorities and providing frequent support
and advice to the Group Executive and the Board on all
Responsible Business matters. During the year, the Committee
continued to prioritise our stakeholders to drive positive change
for our customers, colleagues, communities and the planet,
whilst remaining integral to the wider strategic agenda. The
Committee was kept updated on the evolving external
environment in relation to ESG regulation and reporting,
regarding consumer sentiment and new business opportunities,
and informed the actions being taken by the business to respond
to these changes.
Meeting materials are structured to support the Committee to
oversee the delivery of our Responsible Business priorities,
maximise stakeholder engagement, ensure meaningful focus on
the Responsible Business fundamentals, and facilitate adequate
challenge by Committee members. In 2023, this included a
session with an external speaker with direct experience of
implementing responsible business practices to stimulate
debate and share learnings. Board and Committee members
also receive a variety of reports on a regular basis, including
Responsible Business KPI performance tracking. TheCommittee
is made aware of significant updates across the annual reporting
cycle, which during the year included additional updates on
Kingfisher’s approach to ESG reporting, investor
engagementand ratings, and through the Group Climate
Committee, the actions and decisions being taken by the
business to drive the Group’s climate-related agenda.
Sophie Gasperment
Chair of the Responsible Business Committee
24 March 2024
Colleagues
The Committee continued to track colleague sentiment on our
Responsible Business agenda through the analysis of data and
insights, and the evaluation of actions in place to support strong
employee engagement on this topic across Kingfisher. The
Committee remains close to the outputs of the colleague
engagement survey and the initiatives in place to promote the
colleague experience of Responsible Business and best practice
sharing across theGroup.
The Committee heard regular updates on developments across
Responsible Business colleague activations. This included
initiatives to support an inclusive and diverse culture such as
‘Together. Stronger’, the Group-wide allyship campaign, which
had been co-created with colleagues, as well as recent activity
to deliver against our skills for life commitment and new training
targets, including banner updates on the apprenticeship
programmes in B&Q and Kingfisher France.
During the year the Committee also reviewed colleague
communications and engagement campaigns, including the
water saving campaign, aimed at both customers and colleagues
and which sought to bring to life the challenges of water scarcity
and the solutions and products to help mitigate against this.
Membership and attendance
Eligible Attended
Sophie Gasperment
1
3 3
Rakhi Goss-Custard 3 3
Thierry Garnier 3 3
John Mewett 3 3
Kate Seljeflot 3 3
Henri Solère 3 2
1. Chair of the Committee.
The Committee has three scheduled meetings each year
one of which is convened to consider the output of the
Committee’s annual performance review.
The Responsible Business Committee comprises 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.
During the year, an internal evaluation of the Committee’s
effectiveness was undertaken as part of the broader
evaluation of Board performance. The evaluation concluded
that the Committee operates effectively, and raised no areas
of immediate concern. However, Committee members
suggested ways to consolidate the Committee’s
effective operation.
Further detail on the evaluation process can be found on page 74.
78 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Customers
The Committee reviewed the impact and effectiveness of the
customer pillar of the Responsible Business strategy and used
its expertise to guide engagement plans with customers. This
included a deep dive on the performance and ongoing
development of the Sustainable Home Products (SHP)
programme, the Green Star product mark initiative and
associated customer communications.
The Committee also heard from banners on customer
programmes such as B&Q’s wide-ranging Responsible Business
Build a Life Project, and Castorama Poland’s Clean Air Project,
which seeks to improve energy efficiency in customers’ homes
by offering a complex end-to-end solution (products and
services) and thereby support customers in reducing their
carbon emissions.
Planet
The Committee assessed progress against the planet pillar
of the Responsible Business strategy, with a specific focus
on our responsible forestry programme, Forest Positive. The
review included consideration of the rapidly changing external
landscape including stakeholder impact and the evolution of our
programme. The Committee provided guidance on future focus
areas, the renewal of Kingfisher’s partnerships, local market
forest initiatives and projects in banners.
The Committee oversaw the actions and decisions of the Group
Climate Committee, which included Kingfisher’s approach to
setting and delivering carbon emissions reduction targets,
managing climate-related risks, opportunities and reporting
requirements, both internally, through our governance
structures and externally, through engagement with regulators
and other retailers.
Communities
The Committee monitored the impact and breadth of
community projects and investment across banners, including
the banner foundations and the success and reach of the
communities programme to date. This covered our response
to situations ofconflict and disasters, such as the earthquakes
in Turkey, Syria and Morocco, and deep dives on projects
undertaken by the Group and the banner foundations with our
charity partners during the year including the B&Q foundation’s
inaugural Pride campaign and Brico Dépôt Iberia foundation’s
initiative focused on helping homeless people into better homes.
The Committee guided on the selection process for funded
projects and opportunities for colleagues to engage in the
communities work programme.
Our areas of focus in 2024/25
In 2024/25, the Committee will continue to support and guide
the business to leverage our Responsible Business ambitions to
create value and optimise the delivery and impact of our
Responsible Business priorities, in line with the Company’s
strategy. This willinclude:
— Colleagues: assessing the impact of inclusion and diversity,
and engagement initiatives across the Group.
— Communities: evaluating the impact of our communities
programme.
— Planet: appraising the Group’s Climate Transition Plan.
— Customers: supporting customer initiatives to help
customers create more sustainable homes.
79Kingfisher 2023/24 Annual Report and Accounts
Other Information
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.
As part of an ongoing programme of scheduled risk and control
updates, the Committee received presentations frombanners
and Group functions during the year regarding their control
environments and the mitigating actions in place to manage key
risks. Topics that the Committee considered, included:
— Controls in place to mitigate the risks related to the growth
of the Group's e-commerce marketplace.
— The control environment within B&Q and the measures in
place to protect the profitability of the business model.
— The market, and strategic, commercial and operational risks
faced by the Group's French banners and actions taken to
address these.
— A review of supply chain risks and adjustments made to
reduce these.
— The evolving legal and regulatory risks associated with
technology, including regulation of AI and the Group’s
preparedness for potential new requirements.
In addition to these updates and the usual periodic reporting and
audit activities, the Committee continued to monitor the
implementation of the Group’s Internal Controls over Financial
Reporting (ICFR) programme. Good progress was made during
the year in relation to completion of control design assessments,
substantive testing of controls and design improvements ahead
of further testing in 2024. The Committee noted the withdrawal
of certain draft reporting regulations by the UK Government
during the year and the amendments made by the Financial
Reporting Council (FRC) to the UK Corporate Governance Code
in January. The Committee is currently reviewing the new Code
and associated guidance, particularly in relation to internal
controls, but we are confident that the design of our ICFR
programme puts us in good stead to meet the new requirements
over the coming years.
The following pages further describe the Committee’s activities
and key judgements during the year.
Jeff Carr
Chair of the Audit Committee
24 March 2024
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
comprises the CFO, Group Company Secretary, Group General
Counsel, and Group Investor Relations Director.
After reviewing the 2023/24 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 estimated the impact of a demand or
supply shock preventing the Group from realising a large part of
its sales during the peak trading period. 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 viability statement and going concern are set out on pages 65 to 67.
Membership and attendance
Eligible Attended
Jeff Carr
1
4 4
Catherine Bradley 4 4
Rakhi Goss-Custard 4 4
Bill Lennie 4 4
1. Chair of the Committee.
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.
During the year, an internal evaluation of the Committee’s
effectiveness was undertaken as part of the broader
evaluation of Board performance. 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 74.
80 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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.
— Our review included consideration of actual trading during
the year, expectations for the future market environment,
and the impact of Kingfisher’s strategy.
— We reviewed the long-term growth rates, based on inflation
expectations, and the discount rates, which take into account
the cost of equity and debt. We also assessed management’s
approach to identifying impaired stores.
— Sensitivity analyses were reviewed for the impact of changes
in operating cash flows and discount rates on both store
impairments and the level of goodwill headroom.
— The Committee endorsed the recognition of
store net impairment charges of £76 million
(recorded as adjusting items), principally in
France and Romania, and an £8 million
impairment of goodwill, relating to the
NeedHelp business, and the associated
disclosures. Refer to notes 3, 6, 13, 15 and 17
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, including the latest proceedings and expected
decisions regarding the latter. This review included the
appropriate recognition, measurement and presentation 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 £68 million is
recorded on the balance sheet, reflecting
the amount paid to the UK tax authorities in
2021/22 plus accrued interest, and which
continues to be considered recoverable.
Refer to notes 3, 10 and 35 to the
consolidated financial statements.
What are the principal
judgements relating to
inventory
provisioning?
— 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, in particular in France and Poland, stock
availability, the Group’s reduction in inventory levels including
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 (£2.9 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
pension schemes?
— The Committee reviewed the principal financial and
demographic assumptions used to value the Group’s defined
benefit pension schemes, in particular for the significant UK
scheme. This included the assumptions used for discount
rate, pension increases and mortality.
— The Committee endorsed management’s
accounting estimates relating to defined
benefit pensions and the recognition in other
comprehensive income of £42 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 and the mitigations and opportunities available to the
Group in the longer term.
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 2023/24, 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 114.
81Kingfisher 2023/24 Annual Report and Accounts
Other Information
Audit Committee report continued
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 their independence and
negotiating the audit fee. The Committee recognises the
importance of encouraging challenge by the auditor and
satisfying itself that the quality of the audit is of a high standard.
We believe that quality objectives set by Deloitte have been
achieved in relation to this year’s audit and that the approach is
tailored to the Company’s business and its control environment.
The fees paid to Deloitte for their audit services in 2023/24
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. Under the FRC’s Ethical
Standard, engagement partners must cease their participation in
a statutory audit five years after appointment and, as such, the
2023/24 audit will be the fifth and final year for Nicola as
engagement partner. During the year, the Committee endorsed
Deloitte’s appointment of Dave Griffin as engagement partner
from the 2024/25 audit following a handover period with Nicola.
The Committee wishes to place on record its thanks to Nicola
for leading an independent, objective and effective audit
process over the last five years.
The company will be required to put its external audit out to
tender again no later than the audit of the financial year ending
2029/30 and, in view of this, the Committee has commenced a
high-level planning process to ensure that the transition to a new
auditor is as smooth as possible. Kingfisher continues to comply
withthe Statutory Audit Services 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 2023/24
and this was approved at the 2023 AGM. The Board also expects
to propose Deloitte’s reappointment at the 2024AGM.
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 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 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). This has included
reviewing the output of control design assessments and
monitoring the status of substantive testing work. Following
the release of the new UK Corporate Governance Code in
January 2024, the Committee is currently reviewing the scope
of the ICFR programme to ensure that it is aligned with the
amended provisions.
In addition to financial controls, the Committee receives
regularupdates on litigation and compliance, including reports
on the company’s ‘Speak Up’ whistleblowing hotline. 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 27.
82 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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 59 to 64. During the year, the
Committee received briefings from the Internal Audit and Risk
Director, as well as from 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 page
59.
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 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.
Group Internal Audit
During the year, the Committee received progress updates from
the Internal Audit and Risk Director on:
— The company’s risk management systems.
— Detailed outputs of internal audits conducted in several
areas, including:
— Strategic: Marketplace roll-out in the UK and Iberia.
— Financial risks: rebates recognition, customs duties, stock
provisions, GFR and GNFR, treasury & consolidation
systems, payroll, and record to report processes.
— Operational risks: forecasting, replenishment and new
range implementation, property tendering, critical supplier
management, product quality, supply chain resilience,
social media management as well as technology risk areas
including; data science governance, API management and
General IT Controls.
— Compliance risks: ethical sourcing, GFR contract
management, GDPR management of inactive customers,
timber chain of custody, factory visits, expenses, policy
compliance and awareness.
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,
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, agreed a number of actions to continue to
enhance the work of the function and its role within the business.
83Kingfisher 2023/24 Annual Report and Accounts
Directors’ remuneration report
In this report
84 Annual Remuneration Committee
Chair’sstatement
87 Remuneration at a glance
88 Directors’ Remuneration Policy
96 Annual Report on Remuneration
108 Statement of Implementation of the Remuneration
Policy for 2024/25
About this report
The Directors’ remuneration report, on pages 84 to 109,
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) 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, this is highlighted.
During the year, an internal evaluation of the Committee’s
effectiveness was undertaken as part of the broader
evaluation of Board performance. 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 74.
Committee composition
The Committee comprised the following members during
theyear:
Eligible Attended
Claudia Arney
1
3 3
Catherine Bradley 3 3
Jeff Carr 3 3
Andrew Cosslett
2, 4
3 3
Rakhi Goss-Custard 3 3
Sophie Gasperment
3, 4
3 3
1. Chair of the Committee.
2. Andrew Cosslett stepped down as a member of the Committee on
27 June 2023.
3. Sophie Gasperment was appointed as a member of the Committee
on 27 June 2023.
4. Andrew Cosslett and Sophie Gasperment were eligible, as Board
members, to attend meetings throughout the year, and this is
reflected in the table above.
In addition to the scheduled meetings reflected in the table
above, one ad hoc meeting was held during the year.
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.
Dear Shareholder,
As Chair of Kingfisher’s Remuneration Committee, I am pleased
to present the Directors’ remuneration report for 2023/24.
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 also contained within
our Annual Remuneration Report which describes how our Policy
was implemented during 2023/24, and how the Policy will be
implemented in 2024/25. This, together with the Annual
Statement, will be put to an advisory vote at the 2024 AGM.
Also included in this report is our Directors’ Remuneration Policy
which was approved by the majority of our shareholders at the
2022 AGM.
Performance during the year
Against a backdrop of various macroeconomic and consumer
challenges, we have seen varied trading conditions and
performance across our key markets. In the UK & Ireland, we
delivered resilient sales and market share growth, while in France
and Poland low consumer confidence and a tough economic
backdrop impacted our sales performance.
Our adjusted pre-tax profits for the Group were £568 million
for the year while our total sales were £12,980 million. We are
continuing to make good progress on our digital and own
exclusive brand (OEB) offerings, with Group sales penetration
of 17.4% and 45% respectively due in part to strong marketplace
sales growth at B&Q and the successful range refreshes in OEB.
We remain committed to delivering returns to shareholders.
The Board is proposing a final dividend of 8.6p, resulting in a total
dividend for the year of 12.4p. This, when combined with the
share buyback programme, resulted in £397 million being
delivered to shareholders for the year.
The company continues to lead on Responsible Business, as
shown in the Responsible Business section on pages 24 to 27.
We have progressed on our agenda under all four of our pillars
over the year including further reduction of operational carbon
emissions, increase in the number of sustainable products sold
and increased representation of women amongst our senior
leaders and managers.
While the economic environment remains uncertain, we are
committed to delivering on our purpose and priorities, both in
the short and long term. This would not be possible without our
colleagues across the business, whom I would like to once again
thank for their commitment and support.
Our wider workforce
Kingfisher is committed to creating a workplace where everyone
is treated equitably. Store colleagues’ pay rates have been
reviewed as part of the April 2024 pay review. As per prior years,
increases proposed for these colleagues are generally above or
in line with proposals for management colleagues. In light of the
UK Government’s announcement of the largest ever increase in
the rate of National Living Wage and National Minimum Wage
effective 1 April 2024, B&Q and Screwfix store colleagues’ pay
rates will increase to £12.21 and £12.15 per hour respectively (an
increase of c.15% from 1 April 2023). From 1 January 2024 paid
Kingfisher 2023/24 Annual Report and Accounts
84
Governance Financial StatementsStrategic Report Other Information
breaks have been removed in B&Q with store colleagues now
either spending less time at work for the same pay or being at
work for the same hours for more pay. This will also happen in
Screwfix from 1 April 2024.
In response to continuing ongoing inflationary pressures and
resulting impact on cost of living, Kingfisher implemented a
number of targeted reward initiatives in 2022 and 2023 including
a colleague support fund in the UK and colleague discounts on
products, including energy saving products, in the UK and
Romania. These initiatives have been well received and continue
to be utilised. We will continue to monitor inflation and cost of
living in all our markets so we can continue to ensure colleagues
are appropriately supported.
The Committee has also been updated on the progress of
implementation of the new EU Pay Transparency Directive
which impacts the majority of our locations. This directive
aims at increasing pay transparency and will be taken into
consideration by the Committee as part of their review of
wider workforce conditions.
The Committee continues to oversee Kingfisher’s gender pay
report, which is available on our corporate website. As
evidenced in our People and Responsible Business Sections on
pages 14 to 16 and 24 to 27 respectively, we remain committed
to developing more inclusive leaders and improving gender
representation across our business.
The Group did not consult with colleagues when drafting the
Directors’ Remuneration Policy approved in 2022. However, as
part of Kingfisher Colleague Forums, the joint forums of
management and colleague representatives, in both 2022 and
2023 colleagues were advised on remuneration arrangements
of executive directors including their market alignment and how
these align with the arrangements offered elsewhere in the
organisation. Colleagues were invited to ask questions and
welcomed our transparency on this topic.
Our Remuneration Policy
Our current Remuneration Policy was well received by
shareholders with an approval vote of over 93% at the 2022
AGM. In line with requirements, the Committee will be reviewing
this Policy during 2024 and 2025 to ensure it continues to align
with the long-term priorities of the Group and takes into account
corporate governance requirements. Shareholders will be
consulted on the outcomes of the review and the new Policy will
be submitted for approval at the 2025 AGM.
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:
2023/24 Annual Bonus outturn
The 2023/24 Annual Bonus for the executive directors was
assessed against adjusted pre-tax profit, Like-for-Like (LFL) sales
growth, OEB sales penetration and digital sales penetration. 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.
Above threshold performance was achieved for LFL sales growth
while performance above target was achieved in OEB sales
penetration and digital sales penetration. The threshold target for
adjusted pre-tax profit was not met, Collectively this has resulted
in a formulaic outturn of 20.84% of total bonus opportunity which
is equivalent to 41.7% and 39.6% 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 2023/24
strategic measures can be found on page 98.
Vesting of the 2021 Alignment Shares
Performance against the underpins attached to the 2021
Alignment Shares granted to both executive directors was
assessed by the Committee as at 31 January 2024, ahead of
the awards vesting.
Both underpins were met with the Net Debt to EBITDA ratio
less than 2.5 times, the dividend cover above 1.75 times and the
2023/24 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 April 2024
and is subject to a two-year holding period.
Full detail on performance against the underpins for the 2021
Alignment Shares and the vesting outcomes for the executive
directors can be found on pages 98.
Vesting of the DVI Share Awards
Performance against the targets attached to the 2019 Delivering
Value Incentive (DVI) granted to both executive directors was
assessed by the Committee as at 31 January 2024, ahead of the
awards vesting.
The 2019 DVI award is dependent on performance against targets
for Earnings per Share (EPS), Return on Capital Employed (ROCE)
and Relative Total Shareholder Return (TSR). Performance was
measured across a five-year time horizon over two performance
periods, each applying to one half of the total award (i) 1 February
2019 to 31 January 2022 and (ii) 1 February 2021 to 31 January
2024. The Committee reviewed the formulaic outturn of the first
performance period in 2022 resulting in a formulaic outturn of
3.18 x target or 79.6% of maximum for the first half of the award. In
March, the Committee reviewed the second performance period
ahead of the award vesting in July 2024, resulting in a formulaic
outturn of 0 x target or 0% of maximum for the second half of the
award. The overall formulaic outturn for the award is 1.59 x target
or 39.8% of maximum.
The vesting of the award was also subject to a quality of earnings
test which the Committee used to determine if the formulaic
outturn was reasonable. The Committee determined the level of
formulaic outturn was appropriate.
Full detail on the performance against each of the measures can
be found on page 99.
Thierry Garnier has signalled to the Committee, his intention to sell
50% of his vested post-tax DVI shares in line with the approved
policy. Further detail on this can be found on page 100.
85Kingfisher 2023/24 Annual Report and Accounts
Directors’ remuneration report continued
Key remuneration decisions for 2024/25
The Committee also made a number of decisions relevant for
2024/25 during the year which are as follows:
Salary increases
A salary increase of 4% will be awarded to the executive
directors effective from 1 April 2024. This increase is in line
with the standard increase proposed for the wider UK workforce
based in head offices.
2024/25 Annual Bonus
During the year the Committee undertook a review of our annual
bonus measures within the context of our key strategic
priorities. As a result, it was determined to replace the OEB sales
penetration and digital sales penetration metrics, with a group
free cash flow measure. The group free cash flow measure will
be weighted 20%, with adjusted pre-tax profit and like-for-like
sales growth remaining consistent with previous years with a
40% weighting each. This change ensures that our bonus
remains focused on our strategic priorities and key drivers of
shareholder value.
2024 Performance Share Plan (PSP) Measures and Targets
The measures for 2024 PSP are the same as for the previous PSP
cycles 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 Environmental, Social, and Governance (ESG) measures
however has been updated to include Sustainable Home Products
(SHP) in place of Forest Positive. The rationale for the change is
that Kingfisher is aiming to achieve its Forest Positive objective
of responsibly sourcing 100% of its wood and paper products by
2025/26 and remains on track to do so. As the performance
period for the 2024 PSP ends beyond this date (ending FY 26/27),
the Committee concluded that this measure, while suitable for the
2022 and 2023 PSP, was not suitable for the 2024 PSP. The
Committee reviewed a number of different alternatives and
concluded that SHP, as a % of total Group sales, would be a good
measure to include in the 2024 PSP. SHP is a key component in
our Responsible Business strategy, representing our main
measure for determining achievement against our ‘Customer’
pillar in our Responsible Business Strategy (as shown in the
Responsible Business section on page 25). It is also vigorously
validated with both the guidelines set by Kingfisher and the
resulting outturns assessed extensively externally.
The ESG measures are therefore as follows:
— climate change: a reduction in scope 1 and 2 emissions from
a FY 16/17 baseline;
— Sustainable Home Products: % of Group total sales; 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
relevant external consensus. Further details on these measures
including the target ranges can be found on pages 105 to 106.
Remuneration for the executive directors in 2024/25 will be
implemented in line with the Policy. For a summary of the
application of the Policy for 2024/25 see page 108 of the Annual
Report on Remuneration.
Changes to non-executive directors’ and Chair’s fees
The Board reviewed the non-executive directors’ (NED) fees
and agreed, effective 1 February 2024, that the base fee, Senior
Independent Director, and committees’ chair and member fees
will be increased by 3%. These increases reflect the significant
time commitment required from the non-executive directors
and are lower than the increase being implemented for the wider
UK workforce.
Separately, in respect of the Company Chair’s fee, a 3% increase
effective 1 February 2024 was agreed by the Committee. This
increase reflects the significant time commitment required and
is 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
our Remuneration Policy and its implementation as well as other
relevant topics.
I look forward to receiving your support for our Annual Report on
Remuneration at the 2024 AGM.
Claudia Arney
Chair of the Remuneration Committee
24 March 2024
Kingfisher 2023/24 Annual Report and Accounts
86
Governance Financial StatementsStrategic Report Other Information
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
2024/25 and a summary of the implementation of the Policy in 2023/24.
Remuneration principles
Remuneration in 2023/24
Fixed
pay
Annual Bonus
outcome
Alignment Shares
outcome
Delivering Value
Incentive outcome
Total
single figure
£’000 % of max % of salary £’000 % of max £’000 % of max £’000 £’000
CEO 1,048.2 20.84% 41.7% 364.9 100% 468.7 39.8% 3,191.3 5,073.1
CFO 729.5 20.84% 39.6% 244.8 100% 331.0 39.8% 1,744.3 3,049.6
Summary of Policy and implementation for 2024/25
Summary Measures Alignment to strategy
Base salary
For 2024:
— CEO: £917,830 (4% increase)
— CFO: £648,215 (4% 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% Adjusted pre-tax profit
— 40% LFL sales growth
— 20% Free cash flow
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 23/24 performance highlights
Adjusted
pre-tax profit
£568m
LFL
sales growth
(3.1)%
OEB
sales penetration
45%
Digital sales
penetration
17.4%
Net debt
toEBITDA
1.6x
Total
dividend
12.4p
Our FY 23/24 incentive outcomes
0%
6%
Maximum
Actual
40% 40%
10%
10%
6%
8%
Adjusted pre-tax profit
LFL sales growth
OEB sales penetration
Digital sales penetration
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)
Maximum
Actual
EPS
ROCE
Relative TSR
33%
17% 17% 6%
33% 33%
Delivering Value Incentive (760%/650% of salary)
87Kingfisher 2023/24 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 2024/25 bonus and the 2024
PSP measures 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
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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 2024 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.
89Kingfisher 2023/24 Annual Report and Accounts
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
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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 2024/25 Annual Bonus are adjusted
pre-tax profit, like-for-like (LFL) sales growth and free cash flow.
Adjusted pre-tax profit and LFL sales growth ensure that
executives are focused on delivering both growth and
profitability for our shareholders. Free cash flow was chosen as
cash generation is a key strategic priority in 2024/25.
For the 2024 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 2024 PSP, the ESG bucket of measures includes (1) a
measure addressing climate change, (2) a measure on
sustainable home products and (3) an inclusion-based measure
(gender diversity). These measures reflect the importance of
Kingfisher’s long-term goals in respect to the planet, supporting
our customers to create more sustainable homes 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).
91Kingfisher 2023/24 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, 2021/22 and
2022/23 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
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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 95 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.
93Kingfisher 2023/24 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
— Any other reason that the Committee decides
A bad leaver is any leaver not defined as a good leaver.
Directors’ remuneration report continued
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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 2024/25. Potential outcomes for each executive director, based on three
different performance scenarios, are shown.
Notes
Base salary: reflects the salary effective from 1 April 2024.
Benefits: estimate based upon benefits received during 2023/24 as recorded in the single total figure of remuneration table.
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 Performance
Share Plan (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 £6,718k for Thierry Garnier’s package and £4,523k 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).
Bernard Bot
Base salary Pension Benefits Annual Bonus Performance Share Plan (PSP)
Thierry Garnier
Value of
package (£’000)
Maximum
Target
Below
threshold
Maximum
Target
Below
threshold
2%
17% 34% 46%
1%
3%
2%
10%
6%
£1,096
28% 28% 39%
84%
£3,680
2%
1%
2%
4%
£2,222
18% 33% 46%
11%
4%
£763
29% 27% 38%
85%
£3,276
£5,456
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500
95Kingfisher 2023/24 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 2024 AGM. Shareholder approval in respect of the Annual Report on Remuneration is on an advisory basis only.
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 is reviewed annually and is available on the website.
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
Discussed timelines of upcoming review of Remuneration Policy.
Salary review and
remuneration decisions
Reviewed and approved the salary proposals in respect of the Group Executive and executive directors.
Also reviewed and approved salary proposals for the Chair of the Board and the Company Secretary.
Annual Bonus
Judged performance against the 2022/23 strategic measures and agreed the 2022/23 Annual Bonus outturn
and final level of payment for the members of the Group Executive and executive directors.
Approved measures for the 2023/24 Annual Bonus.
Assessed performance against the 2023/24 Annual Bonus measures and reviewed the year-end forecast.
Reviewed the framework for the 2024/25 Annual Bonus.
Alignment Shares
Reviewed the performance of the 2020 Alignment Share awards and determined that the awards would vest
in full.
Assessed performance to date of the 2021 Alignment Shares, which will vest in 2024.
Delivering Value Incentive
Monitored performance of the second performance period of the 2019 Delivering Value Incentive (DVI) award.
Performance Share Plan
Approved the performance measures and targets of the 2023 PSP.
Approved subsequent grant of awards.
Assessed performance to date of the 2022 and 2023 PSP awards which will vest in 2025 and 2026 respectively.
Considered the measures and targets of the 2024 PSP,
Governance and other areas
of focus
Kept under review the company’s approach to wider workforce remuneration.
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 2022/23 Directors’ remuneration report.
Received updates on and considered Kingfisher’s gender pay gap reporting.
Reviewed incentive arrangements for the Group Executive.
Advisers to the Committee
During the financial year ended 31 January 2024, 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 £155,250. These fees were incurred through a retainer, and on a time and expenses basis.
Directors’ remuneration report continued
Kingfisher 2023/24 Annual Report and Accounts96
Governance Financial StatementsStrategic Report Other Information
Voting at the 2023 Annual General Meeting (AGM)
The following table shows the results of the advisory vote on the Annual Report on Remuneration at the 2023 AGM 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 of
shares
voted
Shares on
which votes
were withheld
Annual Report on Remuneration (2023 AGM)
1,614,504,252
(95.18%)
81,679,292
(4.82%) 88.44% 312,340
Directors’ Remuneration Policy (2022 AGM)
1,620,253,983
(93.11%)
119,882,346
(6.89%) 86.57% 195,473
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 2024 and the
comparative figures for the financial year ended 31 January 2023. 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. Delivering
Value
Incentive
£’000
6. Pension
£’000
7. Total
Fixed pay
£’000
8. Total
Variable
pay
£’000
9. Total
pay
£’000
Thierry Garnier 2023/24 875.5 63.3 364.9 468.7
1
3,191.3
3
109.4 1,048.2 4,024.9 5,073.1
2022/23 836.4 52.0 265.2 706.2
2
N/A 104.6 993.0 971.4 1,964.4
Bernard Bot 2023/24 618.3 33.8 244.8 331.0
1
1,744.3
3
77.3 729.5 2,320.1 3,049.6
2022/23 590.7 33.7 177.9 498.7
2
N/A 73.8 698.3 676.6 1,374.9
Total 2023/24 1,493.8 97.1 609.7 799.7
1
4,935.6
3
186.7 1,777.7 6,345.0 8,122.7
2022/23 1,427.1 85.8 443.2 1,204.9
2
N/A 178.4 1,691.3 1,648.0 3,339.3
1. 100% of the 2021 Alignment Share award granted to Thierry Garnier and Bernard Bot will vest on 22 April 2024. These awards in the table above have been
valued based on the average share price during the three-month period to 31 January 2024 of 227.3p. Values include dividend equivalents accrued since the
date of grant. 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 2020 Alignment Share award for Thierry Garnier and Bernard Bot has been updated using the share price at date of vesting (28 July 2023) of
247.1p and includes values of dividend equivalents accrued from date of grant to vesting. No value was attributable to share price growth. No discretion has
been exercised as a result of the share price change.
3. Delivering Value Incentive Awards granted to Thierry Garnier and Bernard Bot will vest on 30 July 2024. The awards in the table above have been valued based
on the average share price during the three-month period to 31 January 2024 of 227.3p. Values include dividend equivalents accrued since the date of grant.
The difference between the share price at the date of grant of the 2019 DVI shares (of 215.4p) and the three-month share price average is 11.9p which means
£166.5k and £91.0k is attributable to share price growth respectively. No discretion has been exercised as a result of the share price change. The DVI was
structured as a consolidated award that combined three years worth of incentive into one long term incentive plan. The equivalent annualised vesting value of
the DVI would therefore be £1,063.8k and £581.4k for the CEO and CFO respectively. This would result in total single figures of remuneration for 2023/24 of
£2,945.6k and £1,886.7k for the CEO and CFO respectively.
Notes to the single total figure of remuneration table
1. Base salary (audited information)
A 5% salary increase was awarded to the executive directors for the 2023/24 financial year which was in line with the increase
awarded to the wider UK workforce based in head offices.
Name
As at 1 April 2023
£’000
As at 1 April 2022
£’000 % increase
Thierry Garnier 882.5 840.5 5%
Bernard Bot 623.3 593.6 5%
2. Taxable benefits (audited information)
The benefits provided to executive directors for 2023/24 and 2022/23 included car benefit (or cash allowance), private medical
insurance, life assurance, tax and legal support.
Name
Car benefit
1
£’000
Medical
£’000
Tax and legal
support
2
£’000
Life
assurance
£’000
Total
2023/24
£’000
Total
2022/23
£’000
Thierry Garnier 25 9.9 24.9 3.5 63.3 52.0
Bernard Bot 25 6.4 0.0 2.5 33.8 33.7
1. Both directors opt for a cash allowance.
2. This benefit relates to tax assistance provided to the CEO during the year, in relation to annual tax filings and legal support provided to the CEO during the year
in respect of immigration services. Both of these items are considered reasonable and appropriate by the Committee.
97Kingfisher 2023/24 Annual Report and Accounts
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 2023/24 Annual Bonus for the executive directors was based on the following measures:
— 40% Adjusted pre-tax profit
— 40% Like-for-like (LFL) sales growth
— 10% Own exclusive brands (OEB) sales penetration
— 10% Digital sales penetration
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 2024, and the resulting payout.
Targets
Measure
Threshold
(10% of max)
Target
(50% of max)
Stretch
(100% of max) Achievement Outturn
Adjusted pre-tax profit (40%) £600m £670m £720m £572m 0.00%
LFL sales growth (40%) (3.5)% (0.5)% 2.5% (3.1)% 6.39%
OEB sales penetration (10%) 43% 44% 45% 44.2% 5.99%
Digital sales penetration (10%) 15.5% 16.7% 17.9% 17.5% 8.47%
Total Outturn 20.84%
At the Remuneration Committee meeting in March 2024, 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.
The OEB and digital sales penetration figures are also different from the rest of the Annual Report. This is due to the outturns being
calculated on a consistent basis to the target ranges.
This means that the total outturn under the 2023/24 annual bonus for executive directors is 20.84% of maximum. The final payout
equates to 41.7% of earned salary for the CEO and 39.6% of earned salary for the CFO which is £364,917 and £244,835 respectively.
In line with the policy, as the bonus is less than 100% of salary, it was wholly delivered in cash.
In determining whether the 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 wider workforce as well as other stakeholders. The
Committee concluded that a bonus of 20.84% of maximum for 2023/24 is appropriate. The level of performance against relevant
measures will also apply to our bonused colleagues throughout the Group as appropriate.
4. Alignment Shares (audited information)
At the March 2024 Remuneration Committee meeting, the Committee reviewed performance against the underpins attached to the
Alignment Shares awarded in 2021 that are due to vest in 2024. Both the executive directors have a 2021 Alignment Share award. The
ratio of net debt to earnings before interest, taxes, depreciation, and amortisation (EBITDA) for 2023/24 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 2023/24 is 12.4p. This is
more than 8.25p 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 1.77 times. This means that
100% of the executive directors’ awards will vest on 22 April 2024. The Committee believes this outturn is appropriate and is
reflective of performance over the performance period. 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
Thierry Garnier 181,366 24,856 468.7
Bernard Bot 128,090 17,555 331.0
1. The number of shares shown represents the proportion of the Alignment Share award granted in April 2021, which is expected to vest on 22 April 2024.
2. Based on dividends accrued to date of publication of the report.
3. Calculated using the three-month average share price to 31 January 2024 of 227.3p. No value was attributable to share price growth.
Directors’ remuneration report continued
Kingfisher 2023/24 Annual Report and Accounts98
Governance Financial StatementsStrategic Report Other Information
5. Delivering Value Incentive (audited information)
As detailed in the 2019/20 Annual Report, the Committee approved the grants made under the DVI in October 2019 to both executive
directors. The 2019 DVI award consolidated three years’ worth of long-term share awards. Therefore, in line with Policy, no award
under the DVI was made in 2020 or in 2021. Both the executive directors have a main DVI award worth 760%/650% of salary at the
time of the grant. Thierry Garnier was also granted a recruitment award delivered through the DVI. This was valued at 80% of salary at
the time of the grant.
The 2019 DVI award is dependent on EPS, ROCE and Relative TSR performance. Performance was measured within a five-year time
horizon of the award over two performance periods, each applying to one half of the total award (i) 1 February 2019 to 31 January
2022 and (ii) 1 February 2021 to 31 January 2024, to better align with the phasing of the company’s strategy at the time. No vesting
can occur under the plan until July 2024. In 2022, the Committee assessed the performance versus. targets for the first performance
period which ended on 31 January 2022. The targets, performance and resulting formulaic outturn is detailed in the 2021/22 Annual
Report and the following table.
EPS growth (p.a.)
(33% of award)
2021/22 ROCE
(33% of award)
TSR %ile vs. comparator group
(33% of award)
Zero 4.0% 10.5% n/a
1x Target 5.0% 11.0% 50
th
2x Target 8.0% 11.5% 60
th
3x Target 11.5% 12.5% 70
th
4x Target 15.0% 13.5% 80
th
Outturn 21.1% 14.5% 55
th
percentile
Formulaic Outturn
(as DVI Multiple, for each element) 4x Target 4x Target 1.55x Target
Total Formulaic Outturn
(as DVI Multiple) 3.18x Target or 79.6% of Maximum
At the March 2024 Remuneration Committee meeting, the Committee reviewed performance against the measures and targets
attached to the second performance period which ended on 31 January 2024. The formulaic outturn for the second performance
period of the DVI for all three measures (EPS growth, ROCE, and TSR) was below threshold resulting in 0% vesting for this proportion
of the award as detailed in the following table.
EPS growth (p.a.)
(33% of award)
1
2023/24 ROCE
(33% of award)
TSR %ile vs. comparator group
(33% of award)
Zero 4.0% 12.00% n/a
1x Target 5.0% 12.25% 50
th
2x Target 6.0% 12.50% 60
th
3x Target 10.0% 13.50% 70
th
4x Target 16.0% 15.00% 80
th
Outturn (8.2)% 7.8% 42
nd
percentile
Formulaic Outturn
(as DVI Multiple, for each element) 0x Target 0x Target 0x Target
Total Formulaic Outturn
(as DVI Multiple) 0.0x Target or 0.0% of Maximum
1. As disclosed when the targets were originally published, EPS growth is calculated from a re-based 2020/21 EPS figure of 25.6p to reflect non-recurring cost
savings of £85 million related to Covid-19. Furthermore the EPS figure used for 2023/24 has been adjusted for share buybacks.
Alongside the formulaic vesting of the first performance period of 3.18x target, or 79.6% of maximum, the overall vesting of the DVI
award was also subject to a quality of earnings test prior to the vesting date which the Committee used to determine if the formulaic
outturn was reasonable. The test included considering the overall execution of the strategy, balance sheet health, the relative
performance of growth vs. returns, the level of transformational costs relative to the plan (Capex and P&L costs), and the overall GDP
growth level in the economy. Following the quality of earnings test, the Committee determined this level of outturn was appropriate.
This means that 1.59x target or 39.8% of maximum of the executive directors’ awards (including Thierry Garnier’s recruitment award)
will vest on 30 July 2024.
99Kingfisher 2023/24 Annual Report and Accounts
The number and value of the awards vested for the current executive directors are therefore as follows:
Name
Number of
shares
vested
1
Number of
dividend
equivalents
2
Value of
shares vested
3
£’000
Thierry Garnier 1,117,364 153,157 2,887.4
Thierry Garnier (recruitment) 117,617 16,120 303.9
Bernard Bot 675,004 92,523 1,744.3
1. The number of shares shown represents the DVI award granted in October 2019, which is expected to vest on 30 July 2024.
2. Based on dividends accrued to date of publication of the report.
3. Calculated using the three-month average share price to 31 January 2024 of 227.3p. For the main awards, £150.7k and £91.0k of the value for the CEO and CFO
was attributable to share price growth respectively. For the CEO’s recruitment award, £15.9k was attributable to share price growth.
The approved 2019 and 2022 Policies require executive directors to retain 50% of their vested post-tax DVI shares and allows for
the sale of up to 50% of any vested post-tax DVI shares regardless of whether they have met their shareholding requirement. Thierry
Garnier has signalled to the Committee, his intention to sell 50% of his vested post-tax DVI shares in line with the approved policy.
The company has agreed if a sale is to occur, that the sale of these shares will occur in a 5 day window later this year. A set time
frame to sell shares will be determined to ensure that the sale of these shares are not linked to market and corporate events
with the actual time period taking into account closed periods. Shareholders will be informed of the details of the sale via RNS.
6. 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 88.
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
inlieuof employer
contributions
intoDCScheme
Cash allowance rate
as % of salary
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 2023/24
£’000
Total
pension benefit as
a % of base salary
Thierry Garnier n/a 109.4 109.4 12.5%
Bernard Bot n/a 77.3 77.3 12.5%
Payments to past directors (audited information)
There were no payments made to past directors.
Payments for loss of office (audited information)
There were no payments made to directors for loss of office.
Directors’ remuneration report continued
Kingfisher 2023/24 Annual Report and Accounts100
Governance Financial StatementsStrategic Report Other Information
FTSE 100 Kingfisher
Value (£)
1 Feb 2014 31 Jan 2015 31 Jan 2016 31 Jan 2017 31 Jan 2018 31 Jan 2019 31 Jan 2023
31 Jan 2024
31 Jan 202231 Jan 202131 Jan 2020
50
100
150
200
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 £101,500 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 1,300,000 DKK per annum for fulfilling this role.
Both executive directors retain their fees.
Performance graph
The graph below shows Kingfisher’s total shareholder return for the 10 years to 31 January 2024, which assumes that £100 was
invested in Kingfisher on 1 February 2014. 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.
101Kingfisher 2023/24 Annual Report and Accounts
Directors’ remuneration report continued
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 2014 to
31 January 2024.
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/DVI
grant level
as a % of
salary
3
LTIP/DVI %
of
maximum
vesting
Value of
vested
shares
£’000
CEO’s single
figure
£’000
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
100 706.2
11
n/a n/a n/a 1,964.4
2023/24 Thierry Garnier 20.8 364.9 80
12
100 468.7 840
13
39.8 3,191.3
14
5,073.1
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. The DVI grant shows
the award level at the point of grant, five 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.
11. The value of the 2020 Alignment Share award for Thierry Garnier and Bernard Bot has been updated using the share price at date of vesting (28 July 2023) of
247.1p and includes values of dividend equivalents accrued from date of grant to vesting.
12. The figure for 2023/24 represents 100% of the 2021 Alignment Share Award granted to Thierry Garnier, vesting based on performance against the underpins
as detailed in this Remuneration report.
13. The figure for 2023/24 represents 100% of the main DVI Award and recruitment Award (760% and 80% respectively) granted to Thierry Garnier vesting based
on performance against the measures as detailed in this Remuneration report.
14. This represents the combined vested value of main DVI award and Recruitment Award (£2,887.4k and £303.9k respectively).
Kingfisher 2023/24 Annual Report and Accounts102
Governance Financial StatementsStrategic Report Other Information
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 2023/24 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
2023/24 2022/23 2021/22 2020/21 2023/24 2022/23 2021/22 2020/21 2023/24 2022/23 2021/22 2020/21
Executive directors
Thierry Garnier
2
4.7% 2.8% 8.9% -6.7% 21.6%
20.1%/
1.2%
3
-85.8%/
-10.9%
3
112%/
15.2%
3
37.6% -58.2% 24.2% n/a
Bernard Bot
2
4.7% 2.8% 8.9% -6.7% 0.3% -4.5% -1.0% 1.0% 37.6% -60.3% 24.2% n/a
Non-executive directors
Andrew Cosslett 4.0% 3.0% 10.0% -9.1% -0.6% 6.6% 1.1% 8.6% n/a n/a n/a n/a
Claudia Arney 3.1% 0.0% 12.8% 17.7%
4
n/a n/a n/a n/a n/a n/a n/a n/a
Catherine Bradley
5
2.5% 23.2%
6
47.3% n/a n/a n/a n/a n/a n/a n/a n/a n/a
Jeff Carr 2.8% 11.6%
6
12.8% -10% n/a n/a n/a n/a n/a n/a n/a n/a
Sophie Gasperment
7
9.8% 0.0% 47.5% -10% n/a n/a n/a n/a n/a n/a n/a n/a
Rakhi Goss-Custard 2.8% 45.2%
6
13.3% -10% n/a n/a n/a n/a n/a n/a n/a n/a
Bill Lennie
8
3.5% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
All Kingfisher plc employees 8.2%
10
7.4% -2.6% -13.8% 4.6% 27.4% -31.8%
9
-33.0% 58.6%
10
-60.8% 70.1% 977%
All UK employees
11
5.7% 11.0% 7.1% -0.6% 4.1% 12.5% -6.3% -19.1% 98.1% -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. Became a member of the Remuneration Committee
in June 2023.
8. Joined on 1 May 2022. The percentage change for 2023/24 is calculated using full time equivalent fees for 2022/23.
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. Kingfisher PLC changes in base salary and bonus influenced by changes in the population.
11. 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.
2023/24
£m
2022/23
£m Percentage change
Overall expenditure on pay 2,068 2,002 3.3%
Share buybacks undertaken during the year
1
160 337 -52.6%
Total dividends paid in the year 237 246 -3.7%
1. During the year, the Group purchased 67 million of the company’s own shares for cancellation at a cost of £160 million as part of its capital returns programme.
103Kingfisher 2023/24 Annual Report and Accounts
Pay ratio analysis
Year Method
25
th
percentile
pay ratio
Median
pay ratio
75
th
percentile
pay ratio
2023/24
Option B (i.e. 25
th
percentile, median and 75
th
percentile individual identified from
our April 2023 gender pay gap analysis)
1
221:1 212:1 190:1
2022/23 Option B
2
93:1 86:1 80:1
2021/22 Option B 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. The CEO total remuneration figure captured in the disclosed pay ratio above is consistent with the value in the single figure table, and so captures the entirety
of the DVI value which will vest in 2024. However, because the DVI was structured as a consolidated award that combined three years worth of incentive into
one long term incentive plan, if presented on an annualised basis, the effective DVI value earned for 2023/24 would be £1,063.8k for the CEO, with a restated
total remuneration figure of £2,945.6k. Restating the CEO pay ratios on this basis would result in ratios of 129:1 at the 25
th
percentile, 123:1 at median and 110:1 at
the 75
th
percentile.
2. Ratios for 2022/23 have been restated using actual share price at vesting of 2020 Alignment Share Award (247.1p) rather than the three month average share
price, between November 2022 and January 2023, 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 25
th
percentile, median and 75
th
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 25
th
percentile, median and 75
th
percentile were £22.9k, £23.9k and £26.8k respectively comprising
salary and employer contribution to pension. The salaries for these employees were £21.8k, £22.8k and £25.5k 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, including most recently in respect
of the outcomes in the annual bonus, Alignment Share and DVI awards. Further details of the DVI award are set out earlier in this
report, however the award is a one-off award that combines three years worth of long term incentive opportunity into a single grant.
This therefore inflates the single year figure in which the award vests (2023/24) and results in greater volatility in our pay ratio
analysis. 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 2024. Calculations are based on a share price of 220.4p
per share (being the closing price of a Kingfisher share on 31 January 2024).
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
as of 31 Jan 24
(% of base
salary)
4
31 Jan 24 31 Jan 23
Thierry Garnier
5
100,000 100,000 625,990 – 5,740,340 350% 108%
Bernard Bot
5
80,000 80,000 326,291 – 3,413,441 270% 89%
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 and 2020 Alignment Share awards which vested in 2022 and 2023 respectively.
2. These awards include nil-cost options to Thierry Garnier and Bernard Bot in respect of the 2021 Alignment Share awards, the 2019 Delivering Value Incentive
award and the 2022 and 2023 Performance Share Plan awards.
3. Shareholding requirement as of 31 January 2024.
4. Between 1 February 2024 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 10,307,271 ordinary shares at 31 January 2024.
Directors’ remuneration report continued
Kingfisher 2023/24 Annual Report and Accounts104
Governance Financial StatementsStrategic Report Other Information
Share awards made during the financial year (audited information)
Options and awards over shares were made during the year ended 31 January 2024 under the Kingfisher Performance Share Plan
rules (KPSP) in respect of the 2023 Performance Share Plan (PSP) award.
2023 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 20 Apr 23 930,814 2,394 31 Jan 26 20 Mar 33
Bernard Bot 20 Apr 23 621,526 1,599 31 Jan 26 20 Mar 33
1. Vesting date of 20 April 2026.
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 257.2p per share, for 20 April 2023.
3. The shares will vest subject to performance against the performance conditions over the period to the end of the 2025/26 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 2023 Performance Share 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% 31.0%
Target (50% vesting) 46.0% 99.0% 34.0%
Stretch (100% vesting) 47.0% 99.5% 36.0%
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 2023.
2024 Performance Share Plan Award
In line with the approved Remuneration Policy, 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 2024).
The measures for the 2024 grant will be broadly similar as those for the 2023 award and are EPS, ROCE, Relative TSR and a basket of
three ESG measures. The measures and targets attached to the vesting of the 2024 award are as follows:
Target 2026/27 EPS (25%) 2026/27 ROCE (25%)
TSR Percentile vs. relative
TSR peer group (25%)
Threshold (25% vesting) 23.0p 8.20% 50
th
Stretch (100% vesting) 30.1p 10.15% 75
th
ESG
(25% weighting)
Target
Climate change
(reduction in scope 1 and 2 emissions)
Sustainable Home Products
(% of total Group sales)
Gender diversity
(% of women in senior leadership)
Threshold (25% vesting) 52.0% 53.0% 31.0%
Target (50% vesting) 55.0% 58.0% 34.0%
Stretch (100% vesting) 62.0% 61.0% 37.0%
105
Kingfisher 2023/24 Annual Report and Accounts
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.
For the 2024 PSP cycle, the Committee decided to replace our previous Forest Positive measure with Sustainable Home Products
(SHP) as a percentage of total Group Sales. The rationale for the change is that Kingfisher is aiming to achieve its Forest Positive
objective of responsibly sourcing 100% of its wood and paper products by 2025/26 and remains on track to do so. As the
performance period for the 2024 PSP ends beyond this date (ending FY 26/27), the Committee concluded that this measure, while
suitable for the 2022 and 2023 PSP, was not suitable for the 2024 PSP. The Committee reviewed a number of different alternatives
and concluded that SHP, as a % of total Group sales, would be a good measure to include in the 2024 PSP. SHP is a key component in
our Responsible Business strategy, representing our main measure for determining achievement against our ‘Customer’ pillar (as
shown in the Responsible Business section on page 25). It is also vigorously validated with both the guidelines set by Kingfisher and
the resulting outturns assessed extensively externally. It is intended that the SHP performance will be assessed on a consistent basis
with the assumptions incorporated into the base year and accompanying target range. All three ESG measures will be weighted
equally within the ESG basket of measures.
One of the key reference points for setting the EPS and ROCE targets is the Group’s internal three-year plan which in itself takes into
account the operating environment. The Committee also reviewed the target ranges taking into account external consensus and
concluded that the ranges for EPS and ROCE appropriately balance being achievable yet stretching. EPS will be based on ‘pence’ in
line with last year.
For ESG measures, targets have been set using our long-term public commitments, internal targets as well as 2023/24 outturns.
Target ranges demonstrate a progression in the target ranges versus the target ranges in the 2023 PSP where applicable.
— For Climate change (reduction in scope 1 and 2 carbon emissions from a 2016/17 baseline), the target took into account our
significant progress to date against our SBTi approved targets including the long term sustainability of targets to date as well as
future possible targets aligned with our net zero commitments.
— Improving the % of women in our senior leadership population (top c.300) remains an important and ongoing area of focus. The
range set takes into account our current outturn and the progress required to achieve our long-term aims.
— The SHP range has been developed taking into account current as well as anticipated progress and our targets.
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 2024.
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), Kingfisher Performance Share Plan (KPSP) and Kingfisher
Share Award Plan (KSAP).
No treasury shares were held or utilised in the year ended 31 January 2024.
Directors’ remuneration report continued
Kingfisher 2023/24 Annual Report and Accounts106
Governance Financial StatementsStrategic Report Other Information
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 2024 and the
comparative figures for the year ended 31 January 2023. 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
2023/24
£’000
Fees
2022/23
£’000
Taxable
benefits
2023/24
£’000
Taxable
benefits
2022/23
£’000
Total
2023/24
£’000
Total
2022/23
£’000
Andrew Cosslett
2
Chair, Nomination Committee Chair R, N 530.3 509.9 1.3
3
1.3
3
531.5 511.1
Claudia Arney Remuneration Committee Chair R, N 89.0 86.3 – – 89.0 86.3
Catherine Bradley Senior Independent Director A, R, N 109.0 106.3 – – 109.0 106.3
Jeff Carr Audit Committee Chair A, R, N 99.0 96.3 – – 98.7 96.3
Sophie Gasperment
4
Responsible Business Committee Chair R, N, RB 94.8 86.3 – – 94.8 86.3
Rakhi Goss-Custard A, R, N, RB 99.0 96.3 – – 98.7 96.3
Bill Lennie A, N 79.0 57.2 – n/a 79.0 57.2
Total 1,100.1 1,038.6 1.3 1.3 1,100.7 1,039.8
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. Andrew Cosslett stepped down from the Remuneration Committee on 27 June 2023. For his role as Chair, he receives a fee of £482,040 per annum. The fees
paid to Andrew Cosslett include a contribution of £48,210 towards the costs of an assistant.
3. These relate to private medical cover for Andrew Cosslett and his family.
4. Sophie Gasperment was appointed to the Remuneration Committee on 27 June 2023 and received an additional fee pro rata from that date.
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 2023/24 and 2022/23 are shown below. No benefits are provided except for
a store discount card of up to 20%.
Fees
£’000
As at
1 February 2023
As at
1 February 2022 % increase
Chair
1
530.3 509.9 4%
Non-executive director fee
2
69.0 66.3 4%
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 10.0 10.0 0%
Remuneration Committee member 10.0 10.0 0%
Responsible Business Committee member 10.0 10.0 0%
1. The Committee reviewed the fee for the company Chair in 2023 and agreed to increase the fee by 4%.
2. The Board reviewed the non-executive fees in 2023 and agreed to increase the fee by 4%.
107Kingfisher 2023/24 Annual Report and Accounts
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 2024. 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 2024
1
Number of shares
held outright as at
31 January 2023
Andrew Cosslett 388,556 388,556
Catherine Bradley 20,000 20,000
Claudia Arney 27,460 27,460
Jeff Carr 210,000 210,000
Sophie Gasperment 10,110 10,110
Rakhi Goss-Custard 6,124 6,124
Bill Lennie 170,000 100,000
1. There have been no changes to the beneficial interests of the non-executive directors between 1 February 2024 and 24 March 2024.
Statement on the implementation of the Remuneration Policy for 2024/25
Implementation of the Policy for executive directors for the year ahead
Base salary
A 4% salary increase will be awarded to the executive directors effective from 1 April 2024. The new salaries are
£917,830 for the CEO and £648,215 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 2024/25 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
— 20% Free cash flow
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 2024/25 are commercially
sensitive as they closely align with annual business priorities and accordingly are not disclosed. These will be
disclosed in the 2024/25 Annual Report and Accounts.
Performance Share Plan
Will be awarded in line with the Policy.
The 2024 Performance Share Plan awards will be granted at the next available grant date. The CEO will be granted an
award of the value of 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
— 25% ESG measures (Climate change, Sustainable Home Products, Gender diversity)
Details of the target ranges for the 2024 PSP are detailed on page 105 to 106.
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.
Directors’ remuneration report continued
Kingfisher 2023/24 Annual Report and Accounts108
Governance Financial StatementsStrategic Report Other Information
Implementation of the Remuneration Policy for non-executive directors for the year ahead
Fees
£’000
As at
1 February 2024
As at
1 February 2023 % increase
Chair
1
546.2 530.3 3%
Non-executive director fee 71.0 69.0 3%
Senior Independent Director fee 20.6 20.0 3%
Audit Committee Chair 20.6 20.0 3%
Remuneration Committee Chair 20.6 20.0 3%
Responsible Business Committee Chair 20.6 20.0 3%
Audit Committee member 10.3 10.0 3%
Remuneration Committee member 10.3 10.0 3%
Responsible Business Committee member 10.3 10.0 3%
1. 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 directors’ fees in 2023/24 and agreed, effective 1 February 2024, that the base fee
will increase by 3% to £71,030. It was also agreed that the Senior Independent Director, Committees’ Chair and members fees would
increase by 3% to £20,600, £20,600 and £10,300 respectively.
Separately, in respect of the company Chair’s fee, the Committee has agreed to award a 3% increase to the total current combined
fee of £530,250 (comprising a core £482,040 fee plus £48,210 towards the cost of an assistant). This increases the combined fee to
£546,160 (core fee of £496,500 plus £49,660 towards an assistant).
The increases for non-executive directors’ and Chair are 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
Andrew Cosslett 1 April 17 31 March 26
Claudia Arney 1 November 18 31 October 24
Bernard Bot 21 October 19 12 months rolling
Catherine Bradley 2 November 20 1 November 26
Jeff Carr 1 June 18 31 May 27
Thierry Garnier 25 September 19 12 months rolling
Sophie Gasperment 1 December 18 30 November 24
Rakhi Goss-Custard 1 February 16 31 January 25
Bill Lennie 1 May 22 30 April 25
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.
The Remuneration Report has been approved by the Board of Directors and signed on its behalf by:
Claudia Arney
Chair of the Remuneration Committee
24 March 2024
109Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 67 and
the Corporate governance report on pages 68 to 109. 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) 110
Annual General Meeting (AGM) 189
Corporate Governance report, including reports
from Board committees
68 – 109
Directors’ interests 96 – 109
Directors’ statement of responsibility 113
Diversity and inclusion 14 – 16, 76 – 77
Employee share schemes note 31
Equal opportunities including disabled employees 16
Financial instruments and financial
risk management
note 24, note 25
Financial review (LR9.8.4 R) 48 – 54
Future developments 59
Viability statement and going concern 65 – 67
Governance and risk management for climate change 28 – 46
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 – 16
Risk management and internal control 59 – 64, 82 – 83
Statement on engagement with employees 14 – 17, 19, 78
Statement on engagement with external stakeholders 17 – 23
Streamlined Energy and Carbon Reporting 28 – 46
Waiver of dividends 111
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
70to 71. Details of the directors’ interests in the shares of
thecompany can be found in the Directors’ remuneration report
on pages 104 and 108. 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 stand for election or re-election by shareholders.
During the year, there have been no changes made to the Board.
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
if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 2023 AGM
to allot shares, as permitted by the company’s Articles. During
the year, 1,916,378 shares were issued under the terms of the
Sharesave Plan at prices between 159.0 pence and 275.0 pence
per share.
This resolution was in line with guidance issued by the
Investment Association and remains in force until the conclusion
of the 2024 AGM, or if earlier, until close of business on
26 September 2024. The company will seek to renew this
standard authority at the 2024 AGM.
110 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
Purchase of own shares
Shareholders further approved a resolution at the 2023 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 19 September 2023 (following the £300 million buyback
programme that was announced on 23 May 2022 and completed
on 16 August 2023). This decision was reflective of the ongoing
balance sheet strength and low leverage and the Board’s
confidence in the outlook including cash generation for the
2023/24 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 67,386,971 ordinary
shares of 15
5/7
pence per share at an average price of £2.30 per
share, for a total consideration of £155 million (excluding stamp
duty). This represents 3.6% of the company’s issued share
capital for the year ended 31 January 2024.
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 2024
AGM, or if earlier, until close of business on 26 September 2024.
The company will seek to renew this standard authority at the
2024 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 70 to 71.
Dividends
The interim dividend of 3.80p per ordinary share was paidon
17 November 2023. The Board is recommending a finaldividend
of 8.60p per ordinary share, making a total ordinary dividend for
the year of 12.40p per ordinary share. Subject to the approval of
shareholders at the 2024 AGM, the final dividend will be paid on
25 June 2024 to shareholders on the register on 17 May 2024.
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 2022/23
(paid July 2023)
15,121,106
100% £1,300,415.12
Interim 2023/24
(paid November 2023)
11,914,455
100% £452,749.29
Total for year to 31 January 2024 £1,753,164.41
Major shareholdings
As at 31 January 2024, 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 13.04
BlackRock, Inc. 7.75
Mondrian Investment Partners Limited 5.00
The following notifications were received after 31 January 2024
up to 24 March 2024:
% of total
voting rights
BlackRock, Inc. 7.73
Mondrian Investment Partners Limited 4.95
111
Kingfisher 2023/24 Annual Report and Accounts
Other Information
Political donations
The company made no political donations during the year
(2022/23: £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
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.
Share capital
The share capital of the company comprises ordinary shares of
15
5/7
pence per share. All 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 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.
— 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.
— Each director has taken all the steps that he or she ought
to have taken as a director 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 Section 418 of the Act.
Directors’ report approval
The directors’ report was approved by a duly authorised
committee of the Board of Directors on 24 March 2024 and
signed on its behalf by
Chloe Barry
Company Secretary
24 March 2024
Directors’ report continued
112 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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 24 March 2024 and signed on its behalf by
Chloe Barry
Company Secretary
24 March 2024
113Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 balance sheets;
— the consolidated and parent company statements of changes
in equity;
— the consolidated cash flow statement; and
— the related notes 1 to 37 to the group financial statements and
1 to 14 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 2024 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.
114 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic 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); and
— Inventory provisioning.
Materiality The materiality that we used for the group financial statements was £28m which was determined on the
basis of approximately 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 95% of the group’s revenue, 99% of the group’s profit before
tax and 95% of the group’s net assets.
Significant changes in our
approach
In our audit report on the 2022/23 audit of the financial statements, we identified a key audit matter
relating to transfer pricing provisions and the recoverability of the EU state aid receivable.
This year, we consider there to be a lower level of judgement for both of these items and so they are no
longer included as a key audit matter. With respect to transfer pricing provisions, the provision and total
estimated residual exposure has not significantly changed from the prior period, and there has been no
legislative movement such that, we would need to perform additional assessments over the balance.
With respect to EU state aid, there have been no significant developments over the period that would
influence the recoverability of the debtor. Given these developments, we therefore consider the risk of
material misstatement to have reduced.
No other significant changes in approach were noted in the current year.
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.
115Kingfisher 2023/24 Annual Report and Accounts
Other Information
Independent auditors’ report continued
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 2024, property, plant and equipment totalled £3,206 million (31 January 2023: £3,205
million) and right-of-use assets totalled £1,881 million (31 January 2023: £1,947 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 £76 million
(2022/23: net impairment charge of £139 million) across the stores or Cash Generating Units (‘CGUs’).
Of this total net charge, £104 million (2022/23: £149 million) represented an impairment charge and
£28 million (2022/23: £10 million) impairment reversals.
Given the ongoing difficult trading conditions there is an increased level of judgement and estimation
required to determine an appropriate cash flow forecast. We have maintained continued focus and audit
attention on this matter to reflect that this continues to be an important area of focus for the audit.
Impairment of store-based assets is primarily evaluated with reference to the higher of value in use and
fair value less cost to sell of stores. The value in use is calculated as the net present value of future cash
flows, driven by the group’s board-approved three-year plan, a long-term growth rate, and a discount
rate. 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 assumptions 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 which could be manipulated by management to achieve a
desired outcome.
The key assumptions applied by management, in the group’s store-based asset impairment
assessments are:
— forecast short term cash flows, which include the stores sales assumptions and margin/contribution
and 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.
116 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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:
— 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 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. Inventory provisioning
Key audit matter
description
As at 31 January 2024, net inventory, after recognising relevant provisions, is £2,914 million (2022/23:
£3,070 million) as disclosed in note 2 and 19 to the financial statements.
Assessing the valuation of inventory, in accordance with IAS 2 ‘Inventories’, requires significant
judgement in estimating the net recoverable value 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.
In doing so we carried out the following procedures with respect to the recording of obsolescence
and net realisable value of inventories:
— obtained an understanding of relevant controls across the Group and banners relating to the level
or provisioning;
— assessing 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 expected clearance activity;
— verifying that the inputs used by Management to determine whether a provision is required or
the value of the calculated provision, are correct. These inputs include recent sales prices and
historical stock ageing;
— recomputing the provisions recorded to verify that 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; and
— a retrospective review of the provisioning judgements made in the prior period including an
assessment of the level of inventory write-offs made in the 2023/24 period.
Key observations The results of our audit work were satisfactory and we conclude that the level of inventory provisions is
appropriate.
117Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 £28 million (2022/23: £35 million) £25 million (2022/23: £32 million)
Basis for determining
materiality
Approximately 5% of adjusted profit before tax
(2022/23: c.5%). Adjusting items are defined in note
2a with analysis included in note 6.
1% of net assets (2022/23: 0.6% of net assets)
which has been capped at 90% of group
materiality.
Rationale for the
benchmark applied
We have determined materiality on a basis that is
consistent with FY22/23.
Adjusted profit before tax was selected as the
basis of materiality because this is the primary
measure by which stakeholders and the market
assess performance of the group.
We excluded adjusting items when determining the
basis for materiality because the items, primarily
relating to net impairment charges of assets,
introduce significant volatility to results and 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
£568m
£28m
Group materiality
£28.0m
Component
materiality range
£9.8m - £17.6m
Audit Committee
reporting threshold
£1.4m
Materiality
118 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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% (2022/23: 70%) of group materiality 70% (2022/23: 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 have not been significant.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report
to the Committee all audit differences in excess of £1.4 million
(2022/23: £1.75 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 1,600 stores (2022/23: over 1,500 stores) in
eight countries (2022/23: eight countries) across Europe.
We have focused our group audit scope primarily on significant
trading entities and 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.
Full audit scope
Specified audit procedures
Review at group level
Full audit scope
Specified audit procedures
Review at group level
Full audit scope
Specified audit procedures
Review at group level
Revenue Profit before tax Net assets
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, Brico Depot Romania 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 audit procedures. These entities account for
93% (2022/23: 94%) of the group’s revenue, 99% (2022/23: 92%)
of the group’s profit before tax and 95% (2022/23: 89%) of the
group’s net assets.
31%
5%
64%
33%
66%
1%
93%
7%
0%
119Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 banner 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 trading entities, IT controls were relied on 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 all in scope
trading entities.
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.
Climate change is included in the Group’s principal risks (as set
out on page 60-64. The group currently considers climate to
have limited impact over its three year planning horizon (as
stated on page 140) 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. Further, senior members of the group
audit team completed in-person visits to the component audit
teams and engaged with the component audit teams regarding
matters affecting their audit which also included engagement and
dialogue with local management teams.
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.
120 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
8. Other information
The other information comprises the information included in the
annual report 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,
the directors 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
provisioning. 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.
121Kingfisher 2023/24 Annual Report and Accounts
Other Information
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 UK General Data Protection Regulations 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 provisioning 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
teams, 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 67;
— 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 65 – 66;
— the directors’ statement on fair, balanced and
understandable set out on page 80;
— the board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on page 60-64;
— the section of the annual report that describes the
review of effectiveness of risk management and internal
control systems set out on page 82-83; and
— the section describing the work of the audit committee
set out on page 80-83.
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.
122 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report
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.
15. Other matters which we are required to address
15.1 Auditor tenure
Following the recommendation of the audit committee, we were
appointed 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 15 years, covering the years ending 31 January 2010 to
31 January 2024.
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) 4.1.15R – DTR 4.1.18R,
these financial statements will form part of the Electronic
Format Annual Financial Report filed on the National Storage
Mechanism of the FCA in accordance with DTR 4.1.15R – DTR
4.1.18R. This auditor’s report provides no assurance over
whether the Electronic Format Annual Financial Report has
been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
Nicola Mitchell FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
24 March 2024
We have nothing to report in respect of these matters.
We have nothing to report in respect of these matters.
123Kingfisher 2023/24 Annual Report and Accounts
Consolidated income statement
Year ended 31 January 2024
2023/24
2022/23
Before Adjusting Before Adjusting
adjusting items adjusting items
£ millions
Notes items
(note 6)
Total
items
(note 6)
Total
Sales
4
12,980
–
1 2,980
1 3,059
–
13,05 9
Cost of sales
(8,204)
–
(8,204)
(8,26 4)
–
(8,26 4)
Gross profit
4 ,77 6
–
4 ,77 6
4,795
–
4,7 95
Selling and distribution expenses
 (3, 143)(87)(3,230)(3,087)(136)(3,223)
Administrative expenses
 (98 2)(8)(990)(868)(12)(880)
Other income
23
2
25
25
1
26
Share of post
-tax results of joint
ventures and associates
18
(1)
–
(1)
5
–
5
Operating profit
5
673
(93)
580
870
(147)
723
Finance costs
(133)
–
(133)
(129)
–
(129)
Finance income
28
–
28
17
–
17
Net finance costs
7
(105)
–
(105)
(112)
–
(112)
Profit before taxation
8
56 8
(93)
475
758
(147)
611
Income tax expense
10
(15 3)
23
(130)
(169)
29
(140)
Profit for the year
415
(70)
345
589
(118)
471
Earnings per share
11
Basic
18.2p
23.8p
Diluted
18.0p
23.5p
Adjusted basic
21.9p
29.7p
Adjusted diluted
2 1.6p
29.4p
The proposed dividend for the year ended 31 January 2024, subject to approval by shareholders at the Annual General Meeting, is 12. 40p
per share, comprising an interim dividend of 3.80p in respect of the six months ended 31 July 2023 and a final dividend of 8.60p.
124 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Consolidated statement of comprehensive income
Year ended 31 January 2024
£ millions
Notes
2023/24
2022/23
Profit for the year
345
471
Remeasurements of post
-employment benefits
28
(42)
(278)
Inventory cash
flow hedges – fair value (losses)/gains
(32)
58
Tax on items that will not be reclassified
28
85
Total items that will not be reclassified subsequently to profit or loss
 (46)(135)
Currency translation differences
Group
(3)
129
Joint ventures and associates
(1)
11
Transferred to income statement
(2)
–
Inventory cash flow hedges
– losses/(gains) transferred to income statement
12
(5)
Tax on items that may be
reclassified
(2)
–
Total items that may be reclassified subsequently to profit or loss
4
135
Other comprehensive expense for the year
(42)
–
Total comprehensive income for the year
303
471
125Kingfisher 2023/24 Annual Report and Accounts
Consolidated statement of changes in equity
Year ended 31 January 2024
2023/24
Share Own Capital Other
capital Share shares Retained redemption reserves Total
£ millions
 Notes (note 29) premium held earnings reserve (note 30) equity
At 1 February 202
3
30 5
2,228
(22)
3,7 96
71
285
6,663
Profit for the year
–
–
–
345
–
–
345
Other comprehensive
expense for the year
–
–
–
(20)
–
(22)
(42)
Total comprehensive income
/(expense) for
the year
–
–
–
325
–
(22)
303
Inventory cash flow hedges
– losses
transferred to inventories
–
–
–
–
–
33
33
Share
-based compensation
31
–
–
–
22
–
–
22
New shares issued under share schemes
–
–
–
4
–
–
4
Own shares issued
under share schemes
–
–
15
(15)
–
–
–
Purchase of own shares for cancellation
 29
(11)
–
–
(153)
11
–
(153)
Purchase of own shares for ESOP trust
–
–
(24)
–
–
–
(24)
Dividends
 12
–
–
–
(237)
–
–
(237)
Tax on equity items
–
–
–
(1)
–
(6)
(7)
At 31 January 2024
294
2,228
(31)
3,7 41
82
290
6,604
2022/23
Share Own Capital Other
capital Share shares Retained redemption reserves Total
£ millions
 Notes (note 29) premium held earnings reserve (note 30) equity
At 1 February
2022
325
2,228
(46)
4, 025
50
196
6,778
Profit for the year
–
–
–
471
–
–
471
Other comprehensive (
expense)/income for
the year
–
–
–
(18 1)
–
181
–
Total comprehensive income for the year
–
–
–
2 90
–
181
471
nventory 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
–
(2 75)
Dividends
 12
–
–
–
(2 46)
–
–
(2 46)
Tax on equity items
–
–
–
–
–
25
25
At 31 January 2023
305
2,228
(22)
3,796
71
285
6,663
126 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Consolidated balance sheet
At 31 January 2024
£ millions
 Notes
2023/24
2022/23
Non-current assets
Goodwill
13
2,398
2,408
Other intangible assets
14
368
371
Property, plant and equipment
15
3,206
3,205
Investment property
16
27
30
Right-of-use assets
17
1,88 1
1,947
Investments in joint ventures and associates
18
19
30
Post-employment benefits
28
212
251
Deferred tax assets
26
10
16
Other tax authority asset
35
68
64
Other receivables
20
15
19
8,204
8 ,341
Current assets
Inventories
19
2,914
3,070
Trade and other receivables
20
344
347
Derivative assets
24
2
16
Current tax assets
73
40
Cash and cash equivalents
21
360
286
Assets held for sale
3
3
3,696
3 ,762
Total assets
1 1,90 0
12,103
Current liabilities
Trade and other payables
22
(2,445)
(2,48 3)
Borrowings
23
(7)
(16)
Lease liabilities
33
(366)
(343)
Derivative liabilities
24
(23)
(47)
Current tax liabilities
(12)
–
Provisions
 27
(9)
(10)
(2,862)
(2,899)
Non-current liabilities
Other payables
22
(3)
(4)
Borrowings
23
(102)
(1 02)
Lease liabilities
33
(2,00 1)
(2,101)
Derivative liabilities
24
(1)
(5)
Deferred tax liabilities
26
(207)
(205)
Provisions
27
(7)
(10)
Post
-employment benefits
28
(113)
(114)
(2,4 34)(2,54 1)
Total liabilities
(5,296)
(5,44 0)
Net assets
5
6,604
6,663
Equity
Share capital
29
294
305
Share premium
2,228
2,228
Own shares held in ESOP trust
(31)
(22)
Retained earnings
3,7 41
3,796
Capital redemption reserve
82
71
Other reserves
30
290
285
Total equity
6,604
6,663
The financial statements were approved by the Board of Directors on 24 March 2024 and signed on its behalf by:
Thierry Garnier
Chief Executive Officer
Bernard
Bot
Chief Financial Officer
127Kingfisher 2023/24 Annual Report and Accounts
Consolidated cash flow statement
Year ended 31 January 2024
£ millions
Notes
2023/24
2022/23
Operating activities
Cash generated by operations
32
1,438
984
Income tax paid
 (1 17)(130)
French tax
authority payment
–
(34)
Net cash flows from operating activities
1,32 1
820
Investing activities
Purchase of property, plant and equipment and intangible assets
5
(363)
(449)
Disposal of property, plant and equipment, intangible assets
, and assets held for sale
2
2
Purchase of businesses
(3)
–
Disposal of subsidiaries and associates
9
8
Interest received
16
5
Interest element of lease rental receipts
1
1
Principal element of lease rental receipts
3
3
Advance
payments on right-of-use assets
(4)
(7)
Advance receipts on right
-of-use assets
–
2
Dividends received from joint ventures and associates
–
3
Net cash flows used in investing activities
(339)
(432)
Financing activities
Interest paid
 (7)(5)
Interest element of lease rental payments
 (126)(124)
Principal element of lease rental payments
 (348)(329)
Issue of fixed term debt
–
99
New shares issued under share schemes
4
8
Purchase of own shares for cancellation
(160)
(337)
Purchase of own shares for ESOP trust
(24)
(9)
Ordinary dividends paid to equity shareholders of the Company
 12
(237)
(24 6)
Net cash flows
used in financing activities
(898)
(94 3)
Net
increase/(decrease) in cash and cash equivalents and bank overdrafts
84
(555)
Cash and cash equivalents and bank overdrafts at beginning of year
270
809
E
xchange differences
(1)
16
Cash and cash equivalents
and bank overdrafts at end of year
33
353
270
128 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Notes to the consolidated financial statements
1 General information
Kingfisher plc (‘the Company’), its subsidiaries, joint ventures and
associates (together ‘the Group’) supply home improvement
products and services through a network of retail stores and other
channels, located mainly in the United Kingdom and continental
Europe. The nature of the Group’s operations and its principal
activities are set out in the Strategic Report on pages 1 to 67.
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
of the Company’s separate financial statements.
These consolidated financial statements have been approved
for issue by the Board of Directors on 24 March 2024.
2 Principal accounting policies
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to the years presented.
a. Basis of preparation
The consolidated financial statements of the Company, its
subsidiaries, joint ventures and associates are made up to 31
January, except as disclosed in note 18 of the consolidated
financial statements. The current financial year is the year ended
31 January 2024 (‘the year’ or ‘2023/24’). The comparative
financial year is the year ended 31 January 2023 (‘the prior year’
or ‘2022/23’). The consolidated income statement and related
notes represent results from continuing operations, there being
no discontinued operations in the years presented.
The consolidated financial statements have been prepared
in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006
and International Financial Reporting Standards (IFRS Standards)
as issued by the IASB.
The consolidated 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. A summary of
the Group’s principal accounting policies is set out below.
The preparation of financial statements in accordance with
IFRS requires the use of certain accounting estimates and
assumptions. It also requires management to exercise its
judgement in the process of applying the Group’s accounting
policies. The areas involving critical accounting judgements
and key estimation uncertainties, which are significant to the
consolidated financial statements, are outlined in note 3.
Going concern
Based on the Group’s liquidity position and cash flow projections,
including a forward looking remote downside scenario, the
Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in
operational existence for the foreseeable future and they
continue to adopt the going concern basis of accounting in
preparing the consolidated financial statements for the year
ended 31 January 2024.
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 on pages 1 to 67. The financial
position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the financial review on pages
48 to 54. The principal risks and viability statement of the Group
are set out on pages 59 to 66. In addition, note 25 includes the
Group’s financial risk management objectives and exposures to
liquidity and other financial risks. The Directors have considered
these areas alongside the principal risks and how they may
impact the going concern assessment.
As of 31 January 2024, Kingfisher had access to over £900m
of liquidity, comprising cash and cash equivalents (net of bank
overdrafts) of £353m and access to an undrawn Revolving Credit
Facility (RCF) of £550m (of which £46m expires at the end of
May 2025, with the balance expiring at the end May 2026). The
ratio of net debt to EBITDA was 1.6 as of 31 January 2024.
In considering whether the Group’s financial statements can be
prepared on a going concern basis, the Directors have reviewed
the Group’s business activities together with factors likely to
affect its performance, financial position and access to liquidity
(including consideration of financial covenants and credit ratings).
The terms of the RCF require that the ratio of Group operating
profit (excluding adjusting items) to net interest payable
(excluding interest on 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 2024, Kingfisher was compliant with this requirement.
In forming their outlook on the future financial performance, the
Directors considered the risk of higher business volatility and the
potential negative impact of the general economic environment
on household and trade spend.
129Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
2 Principal accounting policies continued
The Directors’ review also included consideration of a remote
scenario that models the impact of a significant demand or
supply shock preventing the Group from realising a large part
of its sales over the period of a month, followed by subdued
demand for the remainder of the year. The total loss of sales
in this scenario is c.£1.5bn (12% over the impacted period). The
scenario assumes the impact of lost sales is partially offset by a
limited set of mitigating actions on variable and discretionary
costs, capital expenditure and the suspension of capital returns
to shareholders. Even under this remote scenario, which requires
drawing on the RCF for a few months, the Group retains
headroom on its credit facilities.
Given current trading and expectations for the business, the
Directors believe that this scenario reflects a remote outcome
for the Group. Should a more extreme scenario occur than
currently modelled by the Directors under this remote scenario,
the Group would need to implement additional operational or
financial measures.
Changes to accounting policies as a result of new standards
issued and effective
The following new or amended accounting standards are in issue
and effective for the current reporting period:
— IFRS 17 (including the June 2020 Amendments to IFRS 17) –
Insurance Contracts
— Amendments to IAS 1 and IFRS Practice Statement 2 –
Disclosure of Accounting Policies
— Amendments to IAS 12 – Deferred Tax related to Assets
and Liabilities arising from a Single Transaction
— Amendments to IAS 8 – Definition of Accounting Estimates
The above new or amended accounting standards did not have a
material impact on the consolidated financial statements.
Standards issued but not yet effective
At the date of the approval of these financial statements, the
following standards which have not been applied in these
financial statements were in issue, but not yet effective:
— Amendments to IAS 12 – International Tax Reform – Pillar
Two Model Rules
— Amendments to IFRS 10 and IAS 28 – Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture
— Amendments to IAS 1 – Classification of Liabilities as Current
or Non-current
— Amendments to IFRS 16 – Lease Liability in a Sale and
Leaseback
— Amendments to IAS 7 and IFRS 7 – Supplier Finance
Arrangements
— IFRS S1 – General Requirements for Disclosure of
Sustainability-related Financial Information and IFRS S2 –
Climate-related Disclosures
— Amendments to IAS 21 – Lack of Exchangeability
These new standards are not expected to have a material impact
on the consolidated financial statements.
Risks and uncertainties
The principal risks and uncertainties to which the Group is exposed
are set out in the Strategic Report on pages 59 to 64.
Use of non-GAAP measures
In the reporting of financial information, the Group uses certain
measures that are not required under IFRS, the generally
accepted accounting principles (‘GAAP’) under which the Group
reports. Kingfisher believes that retail profit, adjusted pre-tax
profit, adjusted effective tax rate, and adjusted earnings per
share provide additional useful information on performance and
trends to shareholders. These and other non-GAAP measures
(also known as ‘Alternative Performance Measures’), such as net
debt, are used by Kingfisher for internal performance analysis
and incentive compensation arrangements for employees. The
terms ‘retail profit’, ‘adjusting items’, ‘adjusted’, ‘adjusted effective
tax rate’, ‘net cash flow’ and ‘net debt’ are not defined terms
under IFRS and may therefore not be comparable with similarly
titled measures reported by other companies. They are not
intended to be a substitute for, or superior to, GAAP measures.
Retail profit is defined as continuing operating profit before
central costs, the Group’s share of interest and tax of joint
ventures and associates and adjusting items. Central costs
principally comprise the costs of the Group’s head office before
adjusting items.
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 disposal/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.
130 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
The term ‘adjusted’ refers to the relevant measure being
reported for continuing operations excluding adjusting items.
The adjusted effective tax rate is calculated as continuing
income tax expense excluding 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, 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.
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.
Refer to the Financial Review for definitions of all of the Group’s
Alternative Performance Measures, including further information
on why they are used and details of where reconciliations to
statutory measures can be found where applicable.
b. Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company, its subsidiaries, joint ventures
and associates.
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over
which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power over the entity.
Subsidiaries acquired are recorded under the acquisition method of
accounting and their results included from the date of acquisition.
The results of subsidiaries which have been disposed are
included up to the effective date of disposal.
The consideration transferred for the acquisition of a subsidiary
is the fair values of the assets transferred, the liabilities incurred
and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifiable
assets acquired and liabilities and contingent liabilities assumed in
a business combination are measured initially at their fair values
at the acquisition date. On an acquisition-by-acquisition basis,
the Group recognises any non-controlling interest in the
acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net assets. Subsequent to
acquisition, the carrying amount of non-controlling interests is
the amount of those interests at initial recognition plus the non-
controlling interests’ share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests
having a deficit balance.
The excess of the consideration transferred, the amount of any
non-controlling interests in the acquiree and the acquisition-date
fair value of any previous equity interests in the acquiree over
the fair value of the identifiable net assets acquired is recorded
as goodwill. If this is less than the fair value of the net assets of
the subsidiary acquired in the case of a bargain purchase, the
difference is recognised directly in the income statement.
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred. Accounting policies of acquired subsidiaries have
been changed where necessary to ensure consistency with
the policies adopted by the Group.
(ii) Joint ventures and associates
Joint ventures are entities over which the Group has joint
control. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions
about the relevant activities require the unanimous consent of
the parties sharing control. The equity method is used to account
for the Group’s investments in joint ventures.
Associates are entities over which the Group has the ability to
exercise significant influence but not control or joint control,
generally accompanied by a shareholding of between 20% and
50% of the voting rights. The equity method is used to account
for the Group’s investments in associates.
Under the equity method, investments are initially recognised at
cost. The Group’s share of post-acquisition profits or losses is
recognised in the income statement within operating profit, and
its share of post-acquisition movements in other comprehensive
income is recognised in other comprehensive income. The
cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. When the Group’s share of
losses equals or exceeds its interest, including any other long-
term receivables, the Group does not recognise any further
losses, unless it has incurred obligations or made payments on
behalf of the joint venture or associate.
Unrealised gains on transactions between the Group and its joint
ventures and associates are eliminated to the extent of the
Group’s interest. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of joint ventures and associates
have been changed where necessary to ensure consistency with
the policies adopted by the Group.
The equity method of accounting is discontinued from the date
an investment ceases to be a joint venture or associate, that is
the date on which the Group ceases to have joint control or
significant influence over the investee or on the date it is
classified as held for sale.
131Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
2 Principal accounting policies continued
In March 2022, the three-year cumulative inflation in Turkey
exceeded 100% and as a result, hyperinflationary accounting was
applied for the years ended 31 January 2023 and 31 January
2024 in respect of the Group’s joint venture in Turkey.
The Group’s consolidated financial statements include the equity
accounted results and financial position of its Turkish joint
venture restated to the current purchasing power as at the year-
end date, with hyperinflationary gains and losses in respect of
monetary items being reported in operating profit. Prior year
comparatives are not restated. Both the joint venture investment
and results are translated at the rate of exchange at the balance
sheet date.
c. Foreign currencies
(i) Presentation and functional currencies
The consolidated financial statements are presented in Sterling,
which is the Group’s presentation currency. Items included in the
financial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which
the entity operates (i.e. its functional currency).
(ii) Transactions and balances
Transactions denominated in foreign currencies are translated into
the functional currency at the exchange rates prevailing on the
date of the transaction or, for practical reasons, at average
monthly rates where exchange rates do not fluctuate significantly.
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. Exceptions to this are where the monetary
items form part of the net investment in a foreign operation or are
designated and effective net investment hedges. Such exchange
differences are initially deferred in equity.
(iii) Group companies
The balance sheets of overseas subsidiaries are expressed in
Sterling at the rates of exchange at the balance sheet date.
Profits and losses of overseas subsidiaries are expressed in
Sterling at average exchange rates for the period. Exchange
differences arising on the retranslation of foreign operations,
including joint ventures and associates, are recognised in a
separate component of equity.
On consolidation, exchange differences arising from the
retranslation of the net investment in foreign entities, and of
borrowings, lease liabilities and other currency instruments
designated as hedges of such investments, are taken to equity.
When a foreign operation is sold, such exchange differences
recorded since 1 February 2004 (being the date of transition to
IFRS) are recognised in the income statement as part of the gain
or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign
entity and translated at the rates of exchange at the balance
sheet date. Goodwill arising prior to 1 February 2004 is
denominated in Sterling, and not subsequently retranslated.
(iv) Principal rates of exchange against Sterling
2023/24
2022/23
Average rate
Year end rate
Average rate
Year end rate
Euro
1.15
1.17
1.17
1.13
US Dollar
1.25
1.27
1.23
1.23
Polish Zloty
5.20
5.08
5.48
5.34
Romanian Leu
5.71
5.83
5.76
5.58
Turkish Lira
1
38.64
38.64
23.18
23.18
1. The Turkish Lira average exchange rates represent the closing rates for the
year, due to the application of hyperinflation accounting in Turkey.
d. Revenue recognition
Sales represent the supply of home improvement products and
services, including commission from sales of third-party
products through Kingfisher websites (i.e. ‘marketplace’
arrangements). Sales exclude transactions made between
companies within the Group, Value Added Tax, other sales-
related taxes and are net of returns, trade and staff discounts.
Revenue is recognised when control of the goods or services
are transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in
exchange for those goods or services.
Revenue from in-store product sales is recognised when the
customer takes possession of the products (i.e. on payment).
Revenue from online ‘click & collect’ product sales is recognised
on collection of the products. Where customers have a right to
return purchased goods in exchange for a refund, a liability for
returns is recognised based on historic trends and offset against
revenue in the period in which the sale was made. An asset (with
a corresponding adjustment to cost of sales) is also recognised
for goods expected to be returned from customers. Where
award credits such as vouchers or loyalty points are provided as
part of the sales transaction, the amount allocated to the credits
is deferred and recognised when the credits are redeemed and
the Group fulfils its obligations to supply the awards.
Revenue from sales of delivered products is recognised on
delivery. Supply of delivered products is judged to be one single
performance obligation.
Service sales typically comprise kitchen and bathroom
installations. Revenue from these services is recognised on
completion of the relevant installation.
Commission revenue is earned from the sale of third-party
products through Kingfisher websites. This is referred to as a
marketplace arrangement. Kingfisher acts as an agent in such
arrangements and recognises the net commission receivable
within sales, generally when an order is placed.
132 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Sales from delivered products, installation services and
marketplace arrangements represent only a small component of
the Group’s sales as the majority relates to in-store and online
‘click & collect’ purchases of products.
Other income includes external rental income and gains on disposal
of assets. Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease.
e. Rebates
Rebates received from suppliers mainly comprise volume
related rebates on the purchase of inventories. Contractual
volume related rebates are accrued as units are purchased
based on the percentage rebate applicable to forecast total
purchases over the rebate period, where it is probable the
rebates will be received and the amounts can be estimated
reliably. Discretionary rebates are not anticipated and only
recognised once earned. Rebates relating to inventories
purchased but still held at the balance sheet date are deducted
from the carrying value so that the cost of inventories is
recorded net of applicable rebates. Such rebates are credited
to the cost of sales line in the income statement when the goods
are sold.
Other rebates received, such as those related to advertising and
marketing, including retail media income from suppliers, are
credited to cost of sales in the income statement when the
relevant conditions have been fulfilled.
f. 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.
g. Intangible assets
(i) Goodwill
Goodwill represents the future economic benefits arising from
assets acquired in a business combination that are not individually
identified and separately recognised. Such benefits include future
synergies expected from the combination and intangible assets
not meeting the criteria for separate recognition.
Goodwill is carried at cost less accumulated impairment losses.
Goodwill is not amortised and is tested annually for impairment at
country level (except for NeedHelp), representing the lowest
level at which it is monitored for internal management purposes,
by assessing the recoverable amount of each cash generating
unit or groups of cash generating units to which the goodwill
relates. The recoverable amount is assessed by reference to the
net present value of expected future pre-tax cash flows (‘value-
in-use’) or fair value less costs to sell if higher. The pre-tax
discount rates are derived from the Group’s weighted average
cost of capital, taking into account the cost of equity and debt, to
which specific market-related premium adjustments are made
for each country in which the cash generating unit (‘CGU’)
operates. Long-term growth rates are derived from external
long-term inflation forecasts for the territories in which the
businesses operate. When the recoverable amount of the
goodwill is less than its carrying amount, an impairment loss is
recognised immediately in the income statement which cannot
subsequently be reversed. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating to the
entity sold.
(ii) Computer software
Where software is not an integral part of a related item of
computer hardware, it is classified as an intangible asset. Costs
that are directly associated with the acquisition or production of
identifiable software products controlled by the Group, which
are expected to generate economic benefits exceeding costs
beyond one year, are recognised as intangible assets.
Capitalised costs include those of software licences and
development, including costs of employees, consultants and an
appropriate portion of relevant overheads.
Costs related to the configuration and customisation in cloud
computing arrangements, where they do not give the Group
power to control the future economic benefits and to restrict
access of others to those benefits, are not capitalised as they do
not meet the definition of intangible benefits under IAS 38. Such
costs are expensed as incurred. Configuration and customisation
in cloud computing arrangements are only capitalised where a
separate asset is created and capitalisable under IAS 38.
Costs associated with identifying, sourcing, evaluating or
maintaining computer software are recognised as an expense
as incurred.
Software under development is held at cost less any provisions
for impairment, with impairment reviews being performed
annually, or when there is an indication of impairment.
Amortisation commences when the software assets are available
for use and is over their estimated useful lives of two to ten years.
h. Property, plant and equipment
(i) Cost
Property, plant and equipment held for use in the business are
carried at cost less accumulated depreciation and any provisions
for impairment.
Properties that were held at 1 February 2004 are carried at
deemed cost, being the fair value of land and buildings as at the
transition date to IFRS. All property acquired after 1 February
2004 is carried at cost less accumulated depreciation.
(ii) Depreciation
Depreciation is provided to reflect a straight-line reduction from
cost to estimated residual value over the estimated useful life of
the asset as follows:
133Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
2 Principal accounting policies continued
Freehold land
–
not depreciated
Freehold buildings
–
over remaining useful life
Leasehold improvements
–
over remaining period
of the lease
Fixtures and fittings
–
between 4 and 20 years
Computers and electronic equipment
– between 3 and 5 years
Motor
cars
–
4 years
Commercial vehicles
–
between 3 and 10 years
(iii) Impairment
At each reporting date an assessment is performed as to
whether there are any indicators that property, plant and
equipment, 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 has
decreased. Should such indicators exist, the assets’ recoverable
amounts are subsequently estimated. For store impairment
testing, each individual store is determined to be a cash
generating unit. The recoverable amount is assessed by
reference to the net present value of expected future pre-tax
cash flows (‘value-in-use’) of the relevant cash generating unit
or fair value less costs to sell if higher. A vacant possession
valuation basis is used to approximate the fair value less costs
to sell. The pre-tax discount rates are derived from the Group’s
weighted average cost of capital, taking into account the cost
of equity and debt, to which specific market-related premium
adjustments are made for each country. Long-term growth rates
are derived from external long-term inflation forecasts for the
territories in which the businesses operate. Any impairment or
impairment reversal is charged or credited to the income
statement in the period in which it occurs.
(iv) Disposal
The gain or loss arising on the disposal or retirement of an asset
is determined as the difference between the net sales proceeds
and the carrying amount of the asset and is recognised in the
income statement. Sales of land and buildings are accounted for
when there is an unconditional exchange of contracts.
(v) Subsequent costs
Subsequent costs are included in the related asset’s carrying
amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can
be measured reliably.
All other repairs and maintenance are charged to the income
statement in the period in which they are incurred.
i. Leased assets
The Group assesses whether a contract is or contains a lease at
inception of the contract. Typically, lease contracts relate to
properties such as stores and distribution centres, and
equipment leases such as mechanical handling equipment and
vehicles. The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all lease
arrangements in which it is the lessee, 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 as 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 operating
company in which the lease is contracted, 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
Group is reasonably certain to exercise an option to extend (or
not to terminate) a lease.
The Group 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. A lease liability which is denominated in a currency
that is not the functional currency of the relevant Group entity
(e.g. a Euro-denominated lease in Castorama Poland) is
translated into that entity’s functional currency with foreign
exchange gains and losses recorded in the income statement,
unless the lease liability is designated as a net investment hedge
with foreign exchange gains and losses recorded in other
comprehensive income.
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. Right-of-use assets are depreciated on a
straight-line basis over the remaining lease term.
Lessor accounting
Leases for which the Group 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 Group 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.
134 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Rental income from operating leases is recognised on a straight-
line basis over the term of the relevant lease.
Amounts due from lessees under finance leases are recognised
as receivables at the amount of the Group’s net investment in
the leases. Finance lease income is allocated to accounting
periods so as to reflect a constant periodic rate of return on the
Group’s net investment outstanding in respect of the leases.
j. Investment property
Investment property is property held by the Group to earn rental
income or for capital appreciation. Investment properties are
carried at cost less depreciation and provision for impairment.
Depreciation is provided on a consistent basis with that applied
to property, plant and equipment.
k. Capitalisation of borrowing costs
Interest on borrowings to finance the construction of properties
held as non-current assets is capitalised from the date work
starts on the property to the date when substantially all the
activities which are necessary to get the property ready for use
are complete. Where construction is completed in parts, each
part is considered separately when capitalising interest. Interest
is capitalised before any allowance for tax relief.
l. Inventories
Inventories are carried at the lower of cost and net realisable
value, on a weighted average cost basis.
Trade discounts and rebates received are deducted in
determining the cost of purchase of inventories. Cost includes
appropriate attributable overheads and direct expenditure
incurred in the normal course of business in bringing goods to
their present location and condition. Costs of inventories include
the transfer from equity of any gains or losses on qualifying cash
flow hedges relating to purchases.
Net realisable value represents the estimated selling price in the
ordinary course of business less the estimated costs necessary to
make the sale. Write downs to net realisable value are made for
slow moving, display, damaged or obsolete items and other events
or conditions resulting in expected selling prices being lower than
cost. The carrying value of inventories reflects known and
expected losses of product in the ordinary course of business.
m. Employee benefits
(i) Post-employment benefits
The Group operates various defined benefit and defined
contribution pension schemes for its employees, some of which
are required by local legislation. 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 Group
usually pays fixed contributions into a separate entity. In all cases
other than some of the legally required schemes, a separate fund
is being accumulated to meet the accruing liabilities. The assets
of each of these funds are either held under trusts or managed
by insurance companies and are entirely separate from the
Group’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 the statement of comprehensive income as they arise.
For defined contribution schemes, the Group 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 Group 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.
n. Taxation
The income tax expense represents the sum of the tax currently
payable and deferred tax. The tax currently payable is based on
taxable profit for the year.
The Group is subject to income taxes in numerous jurisdictions
and there are many transactions for which the ultimate tax
determination is uncertain during the ordinary course of
business. For uncertain tax positions, on the basis that tax
authorities have full knowledge of the relevant information it is
determined whether it is probable that, in aggregate, an outflow
of economic resources will occur following investigation. The
potential impact of the relevant tax authority’s examination of the
uncertain tax positions is measured to make the best estimate of
the amount of the tax benefit that may be lost, for which liabilities
are then recorded. Where the final outcome of these matters is
different from the amounts which were initially recorded, such
differences will impact the income tax and deferred tax liabilities
in the period in which such determination is made. These
adjustments in respect of prior years are recorded in the
income statement, or directly in equity, as appropriate.
135Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
2 Principal accounting policies continued
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 liabilities are not recognised
if the temporary difference arises from the initial recognition of
goodwill in a business combination. Deferred tax assets and
liabilities are not 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 Group 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
to other comprehensive income or directly to equity, in which
case the current or deferred tax is also recognised in other
comprehensive income or directly in equity.
Current and deferred tax assets and liabilities are offset against
each other when they relate to income taxes levied by the same
tax jurisdiction and when the Group intends to settle its current
tax assets and liabilities on a net basis.
Operating levies, such as certain revenue, property and payroll-
based taxes, are not treated as income tax and are included within
operating profit. The timing of recognition of a liability to pay an
operating levy is determined by the event identified under the
relevant legislation that triggers the obligation to pay the levy.
o. Provisions and contingent liabilities
Provisions are recognised when the Group 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.
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. Credits or charges arising from changes in the rate used to
discount the provisions are recognised within net finance costs.
Contingent liabilities are possible obligations arising from past
events, whose existence will only be confirmed by future
uncertain events that are not wholly within the Group’s control, or
present obligations where it is not probable that an outflow of
resources will be required or the amount of the obligation cannot
be reliably measured. If the outflow of economic resources is not
considered remote, contingent liabilities are disclosed but not
recognised in the financial statements.
p. Financial instruments
Financial assets and financial liabilities are recognised on the
Group’s balance sheet when the Group becomes a party to the
contractual provisions of the financial instrument. Financial
assets are derecognised when the contractual rights to the cash
flows from the financial asset expire or the Group 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 or are substantially modified.
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.
(i) Cash and cash equivalents
Cash and cash equivalents include cash in hand, uncleared credit
card receipts, deposits held on call with banks and other short-
term highly liquid investments with original maturities of three
months or less. For cash flow statement reporting purposes, the
Group considers bank overdrafts as part of cash and cash
equivalents because they are repayable on demand and form
part of the Group’s cash management.
(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
136 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
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. To measure the expected
credit losses, trade receivables are grouped based on the days
past due. Trade receivables are written off when there is no
reasonable expectation of recovery.
(iv) Trade payables
Trade payables are initially recognised at fair value and are
subsequently measured at amortised cost.
(v) Derivatives and hedge accounting
Derivatives are initially recorded at fair value on the date a
derivative contract is entered into and are subsequently carried
at fair value.
Derivatives embedded in other financial instruments or other
host contracts are treated as separate derivatives when their
risks and characteristics are not closely related to those of host
contracts, and the host contracts are not carried at fair value
with unrealised gains or losses reported in the income statement.
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. Changes in
the fair value of derivatives transacted as hedges of operating
items and financing items are recognised in operating profit and
net finance costs respectively.
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 Group
designates certain financial instruments as:
— a hedge of the fair value of an asset or liability or
unrecognised firm commitment (‘fair value hedge’);
— a hedge of a highly probable forecast transaction or firm
commitment if foreign currency risk is hedged (‘cash flow
hedge’); or
— a hedge of a net investment in a foreign operation (‘net
investment hedge’).
Fair value hedges
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. Gains or losses from
remeasuring the corresponding hedging instrument are
recognised in the same line of the income statement.
Cash flow hedges
Changes in the effective portion of the fair value of derivatives
that are designated as hedges of future cash flows are
recognised directly in other comprehensive income, with any
ineffective portion being recognised immediately in the income
statement where relevant. If the cash flow hedge of a firm
commitment or forecast transaction results in the recognition of
a non-financial asset or liability, then, at the time it is recognised,
the associated gains or losses on the derivative that had
previously been deferred in equity are included in the initial
measurement of the non-financial asset or liability. For all other
hedges, amounts deferred in equity are recognised in the
income statement in the same period in which the hedged item
affects net profit or loss.
Net investment hedges
Where the Group hedges net investments in foreign operations
through foreign currency borrowings or lease liabilities, the gains
or losses on retranslation are recognised in other
comprehensive income. If the Group uses derivatives as the
hedging instrument, the effective portion of the hedge is
recognised in other comprehensive income, with any ineffective
portion being recognised immediately in the income statement.
Gains and losses accumulated in equity are recycled through the
income statement on disposal of the foreign operation.
In order to qualify for hedge accounting, the Group 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 Group 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. At that time, any cumulative gain or loss on
the hedging instrument is retained in equity until the highly
probable forecast transaction occurs. If a hedged transaction is
no longer expected to occur, the net cumulative gain or loss
deferred in equity is transferred to the income statement.
q. Assets and liabilities held for sale
Non-current assets and disposal groups are classified as held for
sale if their carrying amounts will be recovered through a sale
transaction rather than through continuing use. This condition is
regarded as met only when the sale is highly probable and the
asset or disposal group is available for immediate sale in its
present condition subject only to terms that are usual and
customary for sales of such assets.
137Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
2 Principal accounting policies continued
Management must be committed to the sale, which should be
expected to qualify for recognition as a completed sale within
one year from the date of classification as held for sale.
Non-current assets and disposal groups classified as held for
sale are measured at the lower of carrying amount and fair value
less costs to sell. This excludes financial assets, deferred tax
assets and assets arising from employee benefits, which are
measured according to the relevant accounting policy.
Property, plant and equipment, right-of-use assets and intangible
assets are not depreciated once classified as held for sale. The
Group ceases to use the equity method of accounting from the
date on which an interest in a joint venture or an interest in an
associate becomes classified as held for sale.
r. 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 once shares are cancelled,
maintaining non-distributable reserves.
s. Reserves
The following describes the nature and purpose of each reserve
within equity:
(i) Share capital
The nominal value of proceeds received for shares issued.
(ii) Share premium
Proceeds received in excess of the nominal value of shares
issued, net of any transaction costs.
(iii) Own shares held
Shares held by The Employee Share Ownership Plan Trust.
(iv) Capital redemption reserve
Amounts transferred from share capital on repurchase of
issued shares.
(v) Other reserves, comprising:
— Translation reserve – Gains or losses arising on retranslating
the net assets of overseas operations into the Group’s
presentation currency including gains or losses on net
investment hedges.
— Cash flow hedge reserve – Cumulative gains and losses on
‘effective’ hedging instruments.
— Other – Represents the premium on the issue of convertible
loan stock in 1993 and the merger reserve relating to the
acquisition of Darty in 1993.
(vi) Retained earnings
All other net gains and losses and transactions with owners that
are not recognised elsewhere.
3 Critical accounting judgements and key sources
of estimation uncertainty
The preparation of consolidated financial statements under IFRS
requires the Group 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. The significant judgements applied in the preparation
of the financial statements, along with estimates and assumptions
which have a significant risk of causing a material adjustment to
the carrying amount of assets and liabilities within the next
financial year, are discussed below.
Key sources of estimation uncertainty
Inventories
The carrying amount of inventories recognised on the balance
sheet, which are carried at the lower of cost and net realisable
value, are subject to estimates around rates of provision applied
to certain inventory items. The level of provisions recorded are
subject to estimation uncertainty in determining the eventual
sales price of goods to customers in the future, as well as
assessing which items may be slow-moving or obsolete. This is
impacted by factors such as stock turn, range or delisted status,
shrinkage, damage, obsolescence and range review activity.
Range reviews and resulting clearance activity adds additional
complexity to assessing the level of inventory that may become
obsolete and the expected net realisable value of inventory
which will be sold.
The carrying amount of inventories subject to estimation
uncertainty is £2,914m (2022/23: £3,070m). A 1% increase in the
provision as a percentage of gross inventory (before provisions
and a deduction for rebates), which based on management’s
judgement represents a reasonably possible change, would
result in a £32m decrease in the carrying amount of inventories
(2022/23: £33m).
The quantity, age and condition of inventories are regularly
measured and assessed as part of range reviews and inventory
counts undertaken throughout the year and across the Group.
Impairment of store based assets
The Group applies procedures to ensure that its assets are
carried at no more than their recoverable amount. These
procedures, by their nature, require estimates and assumptions
to be made. The most significant are set out below.
138 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Store assets are reviewed for impairment if events or changes in
circumstances indicate that their carrying amount may not be
recoverable, or where there is any indication that an impairment
loss recognised in a previous period either no longer exists or
has decreased. When a review for impairment is conducted, the
recoverable amount of an asset or a cash generating unit is
determined as the higher of fair value less costs to sell and
value-in-use.
The determination of value-in-use for store assets requires the
estimation of future cash flows expected to arise from the
continuing operation of the store and the determination of
suitable discount and long-term growth rates in order to
calculate the present value of the forecast cash flows.
Judgement is also required around the nature and level of
overheads that are necessarily incurred to generate cash inflows
in the context of allocation to individual store cash generating
units. Note that the estimation of future cash flows and
determination of suitable discount rates requires a greater level
of judgement than the determination of long-term growth rates.
Sales projections take into consideration both external factors
such as market expectations, and internal factors such as trading
plans. For certain stores, they assume sales increases that are
higher than recent experience and market growth expectations,
driven by an improved and differentiated offer. Assumed margin
percentage improvements reflect increased sales of the
Group’s own exclusive brands (OEB) as well as lower cost of
sales from leveraging our key vendors, and better clearance
management. Higher assumed operating profit percentages
reflect operational leverage from increased sales as well as cost
savings through operational efficiencies, including more efficient
organisation and leveraging our goods not for resale (GNFR)
spend. Actual outcomes could vary significantly from these
estimates and sensitivity analyses are undertaken to assess the
impact of projected benefits not being realised.
The pre-tax discount rates applied to the cash flow forecasts are
derived from the post-tax weighted average cost of capital for
each of the territories in which the Group operates. The
assumptions used in the calculation of the weighted average
cost of capital are based on observable external market data.
Cash flows beyond the period of the strategic plans are
calculated using a long-term growth rate based on inflation
expectations which does not exceed the long-term average
growth rates for the countries in which the Group’s stores
operate.
As a result of this review, the Group has recorded net store
asset impairment charges of £76m (2022/23: £139m net charges)
as adjusting items, principally relating to revised financial
projections.
The following changes in assumptions, which based on the
Group’s previous experience and management’s judgement
represent reasonably possible changes, would lead to the
following impacts on the net impairment charge:
Assumption
Change in assumption
Impact on net impairment charge
Operating cash
–
Decrease by 10%
Increase by £
49m
flows
–
 Increase by 10%
Decrease by £
38m
Post
-tax
–
Increase by 1%
Increase by £
42m
discount rate
–
 Decrease by 1%
Decrease by £
38m
Further information relating to store assets is provided in notes 15
and 17.
Post-employment benefits
The present value of the defined benefit liabilities recognised on
the balance sheet is dependent on a number of market rates and
assumptions including interest rates of high-quality corporate
bonds, inflation and mortality rates. The net interest expense or
income is dependent on the interest rates of high-quality
corporate bonds and the net deficit or surplus position. The market
rates and assumptions are based on the conditions at the time and
changes in these can lead to significant movements in the
estimated obligations. During the year, changes in financial and
demographic assumptions have resulted in a decrease in defined
benefit liabilities of £188m (2022/23: £991m decrease). To help the
reader understand the impact of changes in the key market rates
and assumptions, a sensitivity analysis is provided in note 28.
Critical accounting judgements
Adjusting items
The Group separately reports adjusting items in order to
calculate adjusted results, as it believes these adjusted measures
provide additional useful information on continuing performance
and trends to shareholders.
Judgement is required in determining whether an item should be
classified as an adjusting item or included within adjusted results.
The Group’s definition of adjusting items is outlined in note 2 (a).
During the year the Group has recorded, before taxation, a
charge for adjusting items of £93m (2022/23: £147m charge).
Total adjusting items after taxation were a charge of £70m
(2022/23: £118m charge). Refer to note 6 for further information
on adjusting items.
Income taxes
The Group is subject to income taxes in numerous jurisdictions in
which it operates and there are many transactions for which the
ultimate tax determination is open to differing interpretations
during the ordinary course of business. Significant judgement may
therefore be required in determining the liability for income taxes in
each of these territories. Where it is anticipated that additional
taxes are probable, the Group recognises liabilities for the estimate
of any potential exposure. These judgements are continually
reassessed, and where the final outcome of these matters is
different from the initially recorded amount, such differences will
impact the income tax and deferred tax liabilities in the period in
which such determination is made. These adjustments in respect
of prior years are recorded in the income statement, or directly in
other comprehensive income as appropriate, and are disclosed in
the notes to the accounts. Refer to notes 10 and 26.
139Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
3 Critical accounting judgements and key sources
of estimation uncertainty continued
Judgement has continued to be required in determining the
outcome of the European Commission’s state aid investigation
into the Group Financing Exemption section of the UK controlled
foreign company rules. In January 2021, the Group received a
charging notice from HM Revenue & Customs (HMRC) for £57m,
which was paid in February 2021, with a further £7m interest paid
in April 2021.
The UK Government and the Group, along with other UK-based
multinational groups, appealed the European Commission
decision to the European Courts. On 8 June 2022, the General
Court of the European Union dismissed several of those appeals,
including the UK Government’s. This decision has been appealed
to the European Court of Justice and the hearing took place on
10 January 2024. The Advocate General’s opinion is expected on
11 April 2024 and the final decision will follow after that, the date
of which is not known.
The final impact on the Group remains uncertain but based upon
advice taken, the Group considers that the amount paid of £64m
plus accrued interest of £4m, which is included in non-current
assets, will ultimately be recovered. Further details are provided
in note 35.
Consideration of climate-related matters
In preparing these financial statements, the Group has considered
the inclusion of climate change as a ‘principal risk’ and the potential
impacts of climate change on these financials. The rationale for
this being included as a principal risk is included in the risks section
pages 59 to 64. Climate scenario analysis has been performed and
is set out in the TCFD disclosures on pages 28 to 46. The financial
impacts of these scenarios, once mitigating actions and
opportunities are taken into account over the respective time
horizons, are expected to be less than the results of the Group’s
impairment sensitivity analysis on operating cash flows (see
impairment of store based assets above).
The potential impacts of climate change on the financials have
been considered in the following areas:
— Carrying value and remaining useful economic lives of
property, plant and equipment;
— Carrying value of inventories and valuations of other assets
and of provisions;
— Viability statement assessment of the Group over the next
three years; and
— Cash flow forecasts used for the purposes of impairment
assessments of store based assets and goodwill.
To support our net zero ambitions, the Group continues to invest
in more sustainable fixed assets. The Group has not recognised
any impairments or significant levels of accelerated depreciation
to existing fixed assets in the year resulting from such actual and
planned investments (i.e. due to a reduction in recoverable
amounts or expected remaining lives). Current assets including
trade receivables and inventories at the balance sheet date are
expected to be received and utilised respectively within a short
timeframe, and therefore no climate-related risks have been
identified for these balances, whilst the Group is not currently
aware of adverse exposures from climate-change requiring
provisions to be recognised.
The Group’s internal three-year financial plans act as the basis for
the Viability Statement financial modelling and for impairment
reviews of non-current assets including store-based assets and
goodwill. They include consideration of climate-related risks and
opportunities expected within this internal financial planning time
horizon. Within this modelling, cash flow sensitivities are
performed, for which the most severe scenario in the Viability
Statement estimates the impact of a demand or supply shock
preventing the Group from realising a large part of its sales during
the peak trading period. The shock, as described in the Viability
Statement on pages 65 to 66, would go far beyond the expected
short-term impact from a remote climate-driven extreme weather
event, such as severe flooding and the resulting damage to one of
the group’s distribution centres or network.
The financial modelling of climate change scenarios performed
by an external party, as described in the TCFD disclosure on
pages 28 to 46, identified the ten-year consumer preference risk
as having the largest gross adverse impact (before mitigating
actions) on the Group’s discounted cash flows. Given this is a
gross and longer-term risk, before mitigating action and
opportunities, it is not deemed reasonably possible for it to have
an impact above 10%, which is the sensitivity performed for store
asset impairment purposes. It is therefore not judged to be a key
driver in determining the outcome of the impairment exercise,
nor that of the viability statement.
Therefore, the Group has concluded that climate change risk
does not represent a critical accounting judgement or key
source of estimation uncertainty for the current year financial
statements. This classification will be reassessed in future
reporting periods as we continue to review the impacts, risks and
opportunities presented by climate change and the Group's
commitments to address the challenges presented.
140 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
4 Sales
£ millions
2023/24
2022/23
B&Q
3,849
3,835
Screwfix
2,538
2,365
Total UK & Ireland
6,387
6,200
Castorama
2,219
2,302
Brico D
épôt
2,027
2,150
Total France
4,246
4,452
Poland
1,694
1,734
Iberia
371
373
Romania
269
285
Other
1
13
15
Other International
2,347
2,407
Total Group
12,980
13,059
1. Other’ consists of the consolidated results of Screwfix International, NeedHelp and revenue from franchise and wholesale agreements.
5 Segmental analysis
Income statement
2023/24
Other
£ millions
UK & Ireland
France
Poland Other
International
Total
Sales
6,387
4,246
1,694
653
2,347
12,980
Retail profit/(loss)
555
139
82 (27)
55
749
Central costs
(60)
Share of interest and tax of joint ventures
and associates
 (16)
Adjusting items
(93)
Operating profit
 580
Net finance costs
 (105)
Profit before taxation
475
2022/23
Other
£ millions
UK & Ireland
France
Poland Other
International
Total
Sales
 6,200 4,452 1,734 673 2,407 13,059
Retail profit/(loss)
603
195
148 (23)
125
923
Central costs
(49)
Share of interest and tax of joint ventures
and associates
 (4)
Adjusting
items
(147)
Operating profit
723
Net finance costs
 (112)
Profit before taxation
611
141Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
5 Segmental analysis continued
Balance sheet
2023/24
Other
£ millions
UK & Ireland
France
Poland Other
International
Total
Segment assets
2,931
1,753
1,195 360
1,555
6,239
Central
assets
83
Goodwill
2,398
Net debt
(2,116)
Net assets
 6,604
2022/23
Other
£
millions
UK & Ireland
France
Poland Other
International
Total
Segment assets
3,084
1,914
1,106 366
1,472
6,470
Central
assets
59
Goodwill
2,408
Net debt
 (2,274)
Net assets
 6,663
Other segmental information
2023/24
Other
£ millions
UK & Ireland
France
Poland Other
International
Central
Total
Capital expenditure
182
88
70 22
92
1
363
Depreciation and amortisation
401
137
70 32
102
1
641
Impairment losses
21
44
11 39
50
–
115
Impairment reversals
 (18) (8) –
(29
)
(2)
–
(28)
Non-current assets
1
4,480
2,127
1,005
279
1,284
8
7,899
2022/23
Other
£ millions
UK & Ireland France Poland Other International Central Total
Capital expenditure
 251 113 60 18 78 7 449
Depreciation and
amortisation
357
140 56 29 85 – 582
Impairment losses
 64 70 1 30 31 – 165
Impairment reversals
 – (10) – – – – (10)
Non
-current assets
1
 4,516 2,217 922 317 1,239 19 7,991
1. Non-current assets comprise goodwill, other intangible assets, property, plant and equipment, investment property, right-of-use assets and investments in joint
ventures and associates.
The operating segments disclosed above are based on the information reported internally to the Board of Directors and Group
Executive, representing the geographical areas in which the Group operates. The Group only has one reportable business segment,
being the supply of home improvement products and services. The majority of the sales in each geographical area are derived from
in-store and online sales of products.
The ‘Other International’ segment consists of Poland, Iberia, Romania, the joint venture Koçtaş in Turkey, NeedHelp, Screwfix
International and results from franchise and wholesale agreements. Poland has been shown separately due to its significance.
Central costs principally comprise the costs of the Group’s head office before adjusting items. Central assets and liabilities comprise
unallocated head office and other central items including pensions, insurance, interest and tax.
142 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
6 Adjusting items
£ millions
2023/24
2022/23
Included within selling and distribution expenses
Net store asset impairment losses
(76)
(139)
Operating model restructuring
(11)
–
Release of France and other restructuring provisions
–
3
(87)
(136)
Included within administrative expenses
NeedHelp
goodwill impairment
(8)
–
Romania
goodwill impairment
–
(16)
Release of Castorama Russia disposal warranty liability
–
4
(8) (12)
Included within other income
Profit on disposal of Crealfi associate investment
2
–
Profit on
exit of properties
–
1
2
1
Adjusting
items before tax
(93)
(147)
Prior year and other adjusting tax items
23
29
Adjusting items
(70)
(118)
In consideration of 2023/24 performance, we have revised future projections for a number of stores across the Group’s portfolio. This
has resulted in the recognition of £76m of net store impairment charges in the year. Impairment charges of £104m have been recorded
principally in France, Romania and the UK, partially offset by impairment reversals of £28m principally in the UK.
An impairment charge of £8m has been recorded relating to the goodwill originally recorded on the acquisition of NeedHelp in 2020/21,
principally driven by revised financial projections.
During the year, the Group commenced formal consultation with employee representatives regarding a proposed Group Technology
operating model restructuring programme. Operating model restructuring costs of £11m have been recorded in the year, primarily related
to this programme. The total cost is expected to be c.£15m by FY 2024/25.
On 30 June 2023, the Group completed the disposal of its 49% interest in its French associate investment Crealfi S.A., for cash proceeds
of £9m, resulting in a gain on disposal of £2m.
Prior year and other adjusting tax items relate principally to deferred tax credits recorded in respect of the impairment and restructuring
expenses noted above, movements in prior year provisions to reflect a reassessment of expected outcomes, agreed positions with tax
authorities and items that have time-expired.
7 Net finance costs
£ millions
2023/24
2022/23
Bank overdrafts
, bank loans and derivatives
–
(3)
Fixed term debt
 (7) (2)
Lease liabilities
 (126) (124)
Finance costs
(133)
(129)
Cash and cash equivalents and short-term deposits
16
5
Net interest income on defined benefit pension schemes
7
11
Finance lease income
1
1
Other interest income
4
–
Finance
income
28
17
Net finance costs
(105)
(112)
Interest on bank loans and fixed term debt interest includes amortisation of issue costs on borrowing facilities of £nil (2022/23: £1m).
143Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
8 Profit before taxation
The following items of expense/(income) have been charged/(credited) in arriving at profit before taxation:
£ millions
2023/24
2022/23
Research and development recognised as an expense
–
1
Amortisation of intangible assets
1
111
84
Depreciation of property, plant and
equipment, investment property and right-of-use assets
530
498
Impairment of goodwill
8
16
Impairment of intangible assets
3
3
Impairment of property, plant and equipment, right
-of-use assets, investment property and assets held for sale
104
146
Reversal of impairment of property, plant and equipment and right
-of-use assets
(28)
(10)
Write
-down to recoverable amount of trade and other receivables
3
7
1. Of the amortisation of intangible assets charge, £1m (2022/23: £1m) and £110m (2022/23: £83m) are included in selling and distribution expenses and
administrative expenses respectively.
Auditor’s remuneration
£ millions
2023/24
2022/23
Fees payable for
the audit of the Company and consolidated financial statements
1.1
1.0
Fees payable to the Company’s auditor and their associates for other services to the Group:
The audit of the Company’s subsidiaries pursuant to legislation
1.7
1.7
Audit fees
2.8
2.7
Audit
-related assurance services
0.2
0.2
Other assurance services
0.1
0.1
Non
-audit fees
0.3
0.3
Auditor’s remuneration
3.1
3.0
Details of the Group’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 page 82.
Audit-related assurance services relate to the interim review. No services were provided pursuant to contingent fee arrangements.
144 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
9 Employees and Directors
£ millions
2023/24
2022/23
Wages and salaries
1,687
1,628
Social
security costs
298
295
Post
-employment benefits
Defined contribution
50
47
Defined benefit (current service cost)
11
13
Share
-based compensation
22
19
Employee benefit expenses
2,068
2,002
Number thousands
2023/24
2022/23
Stores
69
73
Administration
7
7
Average number of persons employed
76
80
The average number of persons employed excludes those employed by the Group’s joint ventures and associates.
Remuneration of key management personnel
£ millions
2023/24
2022/23
Short
-term employee benefits
8.4
9.1
Post
-employment benefits
0.5
1.0
Termination benefits
0.3
0.8
Share
-based compensation
6.5
4.3
15.7
15.2
The Group defines key management personnel as being those members of the Board of Directors and the Group Executive.
Further detail with respect to the Directors’ remuneration is set out in the Directors’ Remuneration Report on pages 84 to 109. Other
than as set out in the Directors’ Remuneration Report, there have been no transactions with key management during the year
(2022/23: £nil).
10 Income tax expense
£ millions
2023/24
2022/23
UK corporation tax
Current tax on profits for the year
 (73) (44)
Adjustments in respect of
prior years
2
3
(71) (41)
Overseas tax
Current tax on profits for the year
(37)
(77)
Adjustments in respect of prior years
8
4
(29) (73)
Current tax
 (100) (114)
Deferred tax
Current year
(25)
(25)
Adjustments in respect of prior
years
(4)
(3)
Adjustments in respect of changes in tax rates
 (1) 2
Deferred tax
(30)
(26)
Income tax expense
(130)
(140)
145Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
10 Income tax expense continued
Factors affecting tax charge for the year
The tax charge for the year differs from the standard rate of corporation tax in the UK of 25% (2022/23: 19%). The differences are
explained below:
£ millions
2023/24
2022/23
Profit before taxation
475
611
Profit multiplied by the standard rate of corporation tax in the UK of
24%
1
(2022/23: 19%)
(114)
(116)
Net expense not deductible for tax purposes
 (9) (18)
Temporary differences:
Losses not recognised
(12)
(6)
Foreign tax rate
differences
–
(6)
Adjustments in respect of prior years
6
4
Adjustments in respect of changes in tax rates
 (1) 2
Income tax expense
(130)
(140)
1. The UK corporation tax rate increased from 19% to 25% with effect from 1 April 2023. A blended rate of 24% is used in the reconciliation above to reflect this change.
The adjusted effective tax rate on profit before adjusting items is 27% (2022/23: 22%). The effective tax rate calculation is set out in the
Financial Review on page 50.
The overall tax rate for the year is 27% (2022/23: 23%). This predominately reflects the blend of tax rates and profits in the Group’s
various jurisdictions, the applicable tax treatment of adjusting items and losses made by companies which have not been recognised
for deferred tax. This has been partially offset by a release of prior year provisions which reflect a reassessment of expected
outcomes, agreed positions with tax authorities and items that have time expired. Net expense not deductible for tax purposes does
not include any significant values that have been netted off.
In addition to the amounts charged to the income statement, tax of £19m has been credited directly to equity (2022/23: £110m credit)
of which £nil (2022/23: £3m credit) is included in current tax and a £19m credit (2022/23: £107m credit) is included in deferred tax. This
principally relates to post-employment benefits.
In July 2023 Finance (No.2) Act 2023 was enacted in the UK which implemented the global minimum tax rules, commonly referred to
as Pillar Two. The rules implement a domestic top-up tax and a multinational top-up tax in the UK which will be effective for the Group
with effect from 1 February 2024. The rules will require the Group to pay top-up taxes in the UK in respect of any operations in
territories where the minimum taxation level of 15% has not been met. Where overseas jurisdictions in which the Group operates have
implemented qualified domestic minimum top-up tax rules, any top-up tax due may be payable in that jurisdiction in part or in full. The
Group has applied the exception to IAS 12 in respect of recognising and disclosing information relating to deferred tax assets and
liabilities arising in respect of Pillar Two.
The Group has assessed the impact of Pillar Two to estimate the exposure to top-up taxes arising from 1 February 2024 and the
impact is expected to be negligible. The Group will continue to closely monitor further developments in respect of Pillar Two to
assess the impact on financial performance.
During the prior year, a payment of €40m (£34m) was made to the French tax authorities relating to a historic tax liability. This amount
was fully provided for in previous years.
Changes in tax rates
The UK corporation tax rate increased from 19% to 25% on 1 April 2023. This increase was substantively enacted on 24 May 2021 and
as such the effect on deferred tax balances was reflected in prior year financial statements.
There were no significant changes to tax rates announced in the year relating to the overseas territories in which the Group operates.
146 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
11 Earnings per share
Pence
2023/24
2022/23
Basic earnings per share
18.2
23.8
Effect of
dilutive share options per share
(0.2)
(0.3)
Diluted earnings per share
18.0
23.5
Basic earnings per share
18.2
23.8
Adjusting items before tax
per share
4.9
7.4
Prior year and other adjusting tax items
per share
(1.2)
(1.5)
Adjusted basic
earnings per share
21.9
29.7
Diluted earnings per share
18.0
23.5
Adjusting items before tax
per share
4.8
7.3
Prior year and other adjusting tax items
per share
(1.2)
(1.4)
Adjusted diluted earnings per share
21.6
29.4
Basic earnings per share is calculated by dividing the profit for the year attributable to equity shareholders of the Company by the
weighted average number of shares in issue during the year, excluding those held in the Employee Share Ownership Plan trust (‘ESOP
trust’) which for the purpose of this calculation are treated as cancelled.
For diluted earnings per share, the weighted average number of shares is adjusted to assume conversion of all dilutive potential
ordinary shares. These represent share options granted to employees where both the exercise price is less than the average market
price of the Company’s shares during the year and any related performance conditions have been met.
The calculation of basic and diluted earnings per share is based on the profit for the year attributable to equity shareholders of the
Company. A reconciliation of statutory earnings to adjusted earnings is set out below:
£ millions
2023/24
2022/23
Earnings
345
471
Adjusting items before tax
93
147
Prior year and other adjusting tax items
 (23) (29)
Adjusted earnings
415
589
The weighted average number of shares in issue during the year, excluding those held in the ESOP trust, is set out below:
Weighted average number of shares (millions)
2023/24
2022/23
Basic
1,898
1,980
Diluted
1,921
2,002
12 Dividends
£ millions
2023/24
2022/23
Dividends paid to equity shareholders of the Company
Ordinary interim dividend for the year ended 31
January 2024 of 3.80p per share
(year ended 31 January 2023: 3.80p per share)
72
74
Ordinary final dividend for the year ended 31 January 2023 of 8.60p per share
(year ended 31 January 2022: 8.60p per share)
165
172
237
246
The proposed dividend for the year ended 31 January 2024, subject to approval by shareholders at the Annual General Meeting, is 12.40p
per share, comprising an interim dividend of 3.80p in respect of the six months ended 31 July 2023 and a final dividend of 8.60p.
147Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
13 Goodwill
£ millions
Cost
At 1 February 20
23
2,457
Exchange differences
(2)
At 31 January 202
4
2,455
Impairment
At 1 February 20
23
(49)
Charge for the year
 (8)
At 31 January 202
4
(57)
Net carrying amount
At 31 January 202
4
2,398
Cost
At 1 February 20
22
2,457
At 31 January 202
3
2,457
Impairment
At 1 February 20
22
(33)
Charge for the year
(16)
At 31 January 202
3
(49)
Net carrying amount
At 31 January 202
3
2,408
An impairment charge of £8m has been recorded in the year relating to the goodwill originally recorded on the acquisition of NeedHelp in
2020/21, principally driven by revised financial projections. In the prior year, an impairment charge of £16m was recorded relating to the
Romania business. This arose due to a significant increase in the discount rate and revised financial projections in the prior year. Both
NeedHelp and Romania are included within the ‘Other International’ operating segment.
Impairment tests for goodwill
Goodwill has been allocated for impairment testing purposes to groups of cash generating units (‘CGUs’) as follows:
£ millions
 UK
France
Poland
Romania
NeedHelp
Total
At 31 January 202
4
Cost
1,796
521
81
49
8
2,455
Impairment
–
–
–
(49)
(8)
(57)
Net carrying amount
1,796
521
81
–
–
2,398
At 31 January 202
3
Cost
1,796
523
81
49
8
2,457
Impairment
–
–
–
(49)
–
(49)
Net carrying amount
1,796
523
81
–
8
2,408
The recoverable amounts of the CGUs have been determined based on value-in-use calculations.
The groups of CGUs for which the carrying amount of goodwill is deemed significant are the UK, France and Poland. The key
assumptions used for value-in-use calculations are set out below.
148 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Assumptions
The cash flow projections are based on approved strategic plans covering a three-year period. These are based on both past
performance and expectations for future market development. The projections reflect the expected benefits from certain strategic
initiatives, including an increased offer, an improved digital journey and improved operational efficiency. As required under IFRS, cash
flows related to uncommitted future restructurings and enhancement capital expenditure are excluded from the projections for
impairment testing purposes. For further details, refer to the Strategic Report on pages 1 to 67.
Key drivers in the strategic plans are sales growth, margin and operating profit percentages. Sales projections take into consideration
both external factors such as market expectations, and internal factors such as execution on our strategy. They assume sales
increases in each country that are driven by an enlarged offer, an improved digital journey and local trading initiatives. Assumed gross
margin percentages benefit from increased sales of the Group’s higher margin own exclusive brands (OEB), vendor negotiations and
operational leverage from increased sales on logistics and distribution costs. Assumed operating profit percentages reflect better
utilisation of fixed costs as well as cost savings through operational efficiencies, including a more efficient organisation and leveraging
our goods not for resale spend.
Cash flows beyond the period of the strategic plans are calculated using a long-term growth rate based on inflation expectations
which does not exceed the long-term average growth rate for the countries in which the Group’s CGUs operate.
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 amounts of the UK, France and Poland CGUs to exceed their recoverable amounts.
The pre-tax discount rates are derived from the Group’s weighted average cost of capital, taking into account the cost of equity and
debt, to which specific market-related premium adjustments are made for each country in which the CGU operates.
The risk adjusted nominal discount rates and long-term nominal growth rates used are as follows:
2023/24
2022/23
Annual % rate
UK
France
Poland
UK
France Poland
Pre
-tax discount rate
11.0
10.4
11.3
11.7 11.3 12.5
Post
-tax discount rate
8.8
8.2
9.7
9.3
9.0 10.8
Long
-term growth rate
2.0
1.6
2.5
2.0
2.3 3.5
149Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
14 Other intangible assets
Computer
£ millions
software
Other
Total
Cost
At 1 February 202
3
888
16
904
Additions
108
3
111
Disposals
 (2)
–
(2)
Exchange differences
 (2)
–
(2)
At 31 January 202
4
992
19
1,011
Amortisation
At 1 February 202
3
(520)
(13) (533)
Charge for the year
(111)
–
(111)
Impairment losses
(3)
–
(3)
Disposals
2
–
2
Exchange differences
2
–
2
At 31 January 202
4
(630)
(13) (643)
Net carrying amount
At 31
January 2024
362
6
368
Cost
At 1 February 2022
836
14
850
Additions
 127 – 127
Disposals
 (78) – (78)
Exchange differences
3
2
5
At 31 January 202
3
888
16
904
Amortisation
At 1 February 202
2
(511)
(9) (520)
Charge for the year
 (84) – (84)
Impairment losses
–
(3)
(3)
Disposals
78
–
78
Exchange differences
 (3) (1) (4)
At 31 January 202
3
(520)
(13) (533)
Net carrying amount
At 31 January 202
3
368
3 371
Additions in the current and prior year primarily related to the development of IT infrastructure for the benefit of the Group.
Computer software cost includes £457m (2022/23: £418m) of internally generated development costs with a £191m (2022/23:
£202m) net carrying amount. None of the Group’s other intangible assets have indefinite useful lives.
150 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
15 Property, plant and equipment
Land and Fixtures, fittings
£ millions
buildings
and equipment
Total
Cost
At 1 February 20
23
2,737
3,486
6,223
Additions
41
219
260
Disposals
 (11) (51) (62)
Reclassified from assets held for sale
17
–
17
Exchange differences
(23)
(17)
(40)
At 31 January 202
4
2,761
3,637
6,398
Depreciation
At 1 February 20
23
(590) (2,428) (3,018)
Charge for the
year
(35)
(181) (216)
Impairment losses
 (28) (24) (52)
Impairment reversals
22
3
25
Disposals
11
50
61
Reclassified from assets held for sale
(17)
–
(17)
Exchange differences
9
16
25
At 31 January 202
4
(628)
(2,564) (3,192)
Net carrying
amount
At 31 January 202
4
2,133
1,073
3,206
Cost
At 1 February 2022
2,596
3,186
5,782
Additions
45
280
325
Disposals
(2)
(40)
(42)
Exchange differences
 98 60 158
At 31 January 2023
 2,737 3,486 6,223
Depreciation
At 1
February 2022
(473)
(2,231) (2,704)
Charge for the year
 (35) (164) (199)
Impairment losses
 (67) (33) (100)
Impairment reversals
 5 – 5
Disposals
 1 39 40
Exchange differences
(21)
(39)
(60)
At 31 January 2023
 (590) (2,428) (3,018)
Net carrying amount
At 31 January 2023
2,147 1,058 3,205
Assets in the course of construction included above at net carrying amount
At 31 January 202
4
22
147
169
At 31 January 20
23
24
195
219
151Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
15 Property, plant and equipment continued
Net impairment charges of £27m have been recorded in the year (2022/23: £95m) resulting from revised financial projections. Current
year impairment charges of £52m (2022/23: £100m) principally relate to store property and equipment assets in France, Romania and the
UK, partially offset by impairment reversals of £25m (2022/23: £5m) principally in the UK. The net store impairment charges of £27m have
been recorded as adjusting items. See note 6.
Total capitalised borrowing costs included within property, plant and equipment, net of depreciation, is £16m (2022/23: £16m).
The Group does not revalue properties within its financial statements. A formal valuation of the portfolio was undertaken by external
professional valuers in October 2023, with the valuations then reviewed for any significant updates to 31 January 2024. Based on this
exercise the value of property is £2.7bn (2022/23: £2.8bn) on a sale and leaseback basis with Kingfisher in occupancy. The key
assumption used in calculating this is the estimated yields. Property, plant and equipment market valuations are considered to have
been determined by level 3 inputs as defined by the fair value hierarchy of IFRS 13, ‘Fair value measurement’. A vacant possession
valuation basis is used to approximate the fair value less costs to sell when reviewing for impairment.
Fixtures, fittings and equipment includes items such as store racking, computers and electronic equipment, motor cars and
commercial vehicles.
16 Investment property
£ millions
Cost
At 1 February 202
3
41
Disposals
(1)
At 31 January 2024
 40
Depreciation
At 1 February 2023
 (11)
Impairment losses
 (2)
At 31 January 2024
(13)
Net carrying amount
At 31 January 2024
27
Cost
At 1 February 2022
 39
Reclassified from assets held for sale
 2
At 31 January 2023
41
Depreciation
At 1 February 2022
 (6)
Impairment losses
 (5)
At 31 January 2023
 (11)
Net carrying amount
At 31 January 2023
 30
152 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
17 Leases
The Group is a lessee of various retail stores, offices, warehouses and plant and equipment under lease agreements with varying
terms, escalation clauses and renewal rights. The Group is also a lessor and sub-lessor of space with freehold and leasehold
properties respectively.
Right-of-use assets
£ millions
2023/24
2022/23
Land and buildings
1,772
1,873
Fixtures, fittings and equipment
109
74
Net carrying amount
1,881
1,947
Leased fixtures, fittings and equipment includes items such as mechanical handling equipment and vehicles.
£ millions
2023/24
2022/23
At beginning of year
1,947
1,885
Additions
1
253
339
Depreciation charge for the year
 (314) (299)
Impairment losses
 (50) (41)
Impairment reversals
3
5
Other movements
45
34
Exchange differences
(3)
24
At end of year
1,881
1,947
1. Right-of-use asset additions include new leases, lease renewals and increases in term and/or scope for existing leases.
Net right-of-use asset impairment charges of £47m (2022/23: £36m) relate to store based assets and are resulting from revised
financial projections. The net store impairment charges of £47m have been recorded as adjusting items. See note 6.
Amounts included in profit and loss
£ millions
2023/24
2022/23
Short
-term rentals
(59)
(65)
Sublease income
1
1
Depreciation of right
-of-use assets
Property leases (276) (262)
Equipment leases
(38)
(37)
Interest on lease liabilities
Property leases
(121)
(120)
Equipment leases
(5)
(4)
Amounts recognised in the cash flow statement
£ millions
2023/24
2022/23
Interest element of lease rental payments
Property leases
(121)
(120)
Equipment leases
(5)
(4)
Principal element of lease rental payments
Property leases
(310)
(292)
Equipment leases
(38)
(37)
Total cash outflow for leases
(474)
(453)
153Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
17 Leases continued
Maturity analysis of operating lease receivables
Undiscounted total future minimum rentals receivable under non-cancellable operating leases are as follows:
£ millions
2023/24
2022/23
Year 1
5
4
Year 2
5
4
Year 3
4
3
Year 4
4
3
Year 5
3
3
Year 6 and onwards
18
16
39
33
Maturity analysis of finance lease receivables
The following table reconciles the undiscounted sublease rentals receivable under non-cancellable finance leases to the present
value of sublease receivables as disclosed as part of trade and other receivables (note 20):
£ millions
2023/24
2022/23
Year 1
3
4
Year 2
3
5
Year 3
2
3
Year 4
1
2
Year 5
1
1
Year 6 and onwards
1
1
Total undiscounted sublease receipts receivable
11
16
Unearned finance income
(2)
(3)
Sublease receivables
9
13
Other lease disclosures
The maturity analysis of lease liabilities has been reflected in note 25 Financial risk management.
Lease arrangements under which rental payments are contingent upon sales, other performance or usage are not significant for
the Group.
There are no corporate restrictions imposed by lease arrangements such as those concerning dividends, additional debt and
further leasing.
Sale and leaseback transactions
No sale and leaseback transactions were entered into in the current or prior year.
154 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
18 Investments in joint ventures and associates
£ millions
At 1 February 202
3
30
Share of post
-tax results
(1)
Disposals
1
(9)
Exchange differences
(1)
At 31 January 2024
19
£ millions
At 1 February 20
22
17
Share of post
-tax results
5
Dividends
 (3)
Exchange differences
 11
At 31 January 202
3
30
No goodwill is included in the carrying amount of investments in joint ventures and associates (2022/23: £nil).
Details of the Group’s significant joint ventures and associates are shown below:
Principal place Class of
of business
% interest held
shares owned
Main activity
Principal joint ventures
Koçtaş Yapı Marketleri Ticaret A.Ş.
Turkey
50%
Ordinary
Retailing
UNIO S.A.S.
France
50%
Ordinary
Sourcing
Principal associate
Crealfi S.A.
France
49%
Ordinary
Finance
2
2, 3
1, 2
1. The Group completed the disposal of its interest in Crealfi S.A. on 30 June 2023, resulting in a gain on disposal of £2m.
2. The financial statements of these companies are prepared to 31 December.
3. The Group established UNIO S.A.S. in France on 31 May 2023 as a joint venture with Mr. Bricolage Group.
Aggregate amounts relating to joint ventures and associates:
2023/24
2022/23
£ millions
Joint ventures
Associates
Total
Joint ventures
Associates
Total
Non
-current assets
27
–
27
24
2
26
Current assets
41
–
41
48
43
91
Current liabilities
(43)
–
(43)
(46)
(35)
(81)
Non-current liabilities
(6)
–
(6)
(5)
(1)
(6)
Share of net assets
19
–
19
21
9
30
Sales
163
–
163
143
3
146
Operating expenses
(148)
–
(148)
(135)
(2)
(137)
Operating profit
15
–
15
8
1
9
Net finance costs
 (16)
–
(16)
–
–
–
Profit before taxation
(1)
–
(1)
8
1
9
Income tax expense
–
–
–
(4)
–
(4)
Share of post-tax results
(1)
–
(1)
4
1
5
The Group’s Turkish joint venture, Koçtaş, has prepared its financial statements under IAS 29 – Financial reporting in hyperinflationary
economies.
155Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
19 Inventories
£ millions
2023/24
2022/23
Finished goods for resale
2,914
3,070
The cost of inventories recognised as an expense and included in cost of sales for the year ended 31 January 2024 is £7,362m
(2022/23: £7,437m).
20 Trade and other receivables
£ millions
2023/24
2022/23
Non-current
Prepayments
9
9
Sublease receivables
6
10
15
19
Current
Trade receivables
101
89
Allowance for expected credit losses
 (9) (8)
Net trade receivables
92
81
Property receivables
4
5
Sublease receivables
3
3
Merchandise returns asset
11
11
Prepayments
79
64
Rebates due from suppliers
119
143
Other receivables
36
40
344
347
Trade and other receivables
359
366
The fair values of trade and other receivables approximate to their carrying amounts. Refer to note 25 for further information on the credit
risk associated with trade and other receivables.
Other receivables include items related to other taxation and social security.
21 Cash and cash equivalents
£ millions
2023/24
2022/23
Cash at bank and in hand
290
259
Cash equivalents
70
27
Cash and cash equivalents
360
286
Included in cash and cash equivalents is restricted cash of £41m (2022/23: £51m) relating to cash held by the Group’s captive insurance
company and in virtual captive arrangements.
Other cash and cash equivalents, fixed for periods of up to three months, comprise bank deposits and investments in money market
funds. The carrying value of cash and cash equivalents are approximated to their fair values.
156 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
22 Trade and other payables
£ millions
2023/24
2022/23
Current
Trade payables
1,239
1,291
Other
taxation and social security
262
238
Deferred income
153
179
Contract to purchase own shares
for cancellation
–
7
Merchandise returns provision
20
21
Payroll creditors and accruals
217
199
Accruals and other payables
554
548
2,445
2,483
Non-current
Accruals and other payables
3
4
Trade and other payables
2,448
2,487
The fair values of trade and other payables approximate to their carrying amounts.
Included in trade payables are amounts at 31 January 2024 of £122m (2022/23: £146m) for which suppliers have received payment
from finance providers. Suppliers choose to enter into these arrangements, which provide them with the option of access to earlier
payment at favourable interest rates from the finance providers based on Kingfisher’s investment grade credit rating. The total
size of these facilities at the reporting date is £373m (2022/23: £385m). If suppliers do not choose early payment under these
arrangements, their invoices are settled in accordance with the originally agreed payment terms. Under certain of these
arrangements, the Group has agreed extended payment terms, however these arrangements do not provide the Group with a
significant benefit of additional financing and accordingly are classified as trade payables.
Accruals and other payables include items related to goods not for resale, property, capital expenditure, insurance and interest.
23 Borrowings
£ millions
2023/24
2022/23
Current
Bank o
verdrafts
7
16
7
16
Non
-current
Bank loans
3
3
Fixed term debt
99
99
102
102
Borrowings
109
118
Bank loans
Non-current bank loans have an average maturity of four years (2022/23: two years) and are arranged at fixed rates of interest with
an effective interest rate of 3.6% (2022/23: 1.8%).
157Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
23 Borrowings continued
Fixed term debt
2023/24
2022/23
Principal Effective Carrying amount Carrying amount
outstanding
Maturity date
Coupon
interest rate £m £m
GBP
Term Loan
£50m
23/06/25
1
SONIA + 0.70%
5.9%
50
50
GBP Term Loan
£50m
17/01/26
1
SONIA + 0.75%
6.0%
49
49
99
99
1. During the prior year the Group entered into two new £50m bilateral term loans with a maturity tenor of two years. During the current year, these term loans
were extended by six months and one year respectively. Both loans were fully drawn at 31 January 2024.
As at 31 January 2024, the Group had an undrawn revolving credit facility (RCF) of £550m, of which £46m expires in May 2025 and
£504m expires in May 2026.
The terms of the committed RCF and 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. At 31 January 2024, the Group was in compliance with this requirement.
Fair values
Fair value
£ millions
2023/24
2022/23
Bank o
verdrafts
7
16
Bank loans
3
3
Fixed term debt
101
102
Borrowings
111
121
Fair values of borrowings have been calculated by discounting cash flows at prevailing interest and foreign exchange rates. This has
resulted in level 2 inputs as defined by the fair value hierarchy of IFRS 13, ‘Fair value measurement’.
24 Derivatives
£ millions
2023/24
2022/23
Current assets
2
16
Current liabilities
(23)
(47)
Non
-current liabilities
(1)
(5)
(22) (36)
The net fair value of derivatives by hedge designation at the balance sheet date is:
£ millions
2023/24
2022/23
Cash flow hedges
 (21) (36)
Non
-designated hedges
(1)
–
(22)
(36)
The Group holds the following derivative financial instruments at fair value:
£ millions
2023/24
2022/23
Foreign exchange contracts
2
16
Derivative assets
2
16
Foreign exchange contracts
(24)
(52)
Derivative liabilities
(24) (52)
(22)
(36)
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.
All the derivatives held by the Group at fair value are considered to have fair values determined by level 2 inputs as defined by the fair
value hierarchy of IFRS 13, ‘Fair value measurement’, representing significant observable inputs other than quoted prices in active markets
158 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
for identical assets or liabilities. There are no non-recurring fair value measurements nor have there been any transfers of assets or
liabilities between levels of the fair value hierarchy.
At 31 January 2024, net financing derivative assets included in net debt amount to £nil (2022/23: £2m).
Cash flow hedges
Forward foreign exchange contracts hedge currency exposures of forecast inventory purchases. At 31 January 2024 the Sterling
equivalent amount of such contracts is £822m (2022/23: £1,276m). These are located in the derivative asset and derivative liability
lines in the consolidated balance sheet with carrying amounts of £2m asset and £23m liability. The associated fair value gains and
losses will be transferred to inventories when the purchases occur during the next 18 months. The amount recognised in other
comprehensive income during the year is a loss of £32m (2022/23: £58m gain). Losses of £33m (2022/23: £117m gain) have been
transferred to inventories for contracts which matured during the year. During the year, losses of £12m (2022/23: £5m gain) have
been transferred to the income statement due to ineffectiveness arising from differences in timing and amount of forecast
transactions relating to foreign currency inventory purchases. The weighted average hedged rates for derivatives outstanding
at 31 January 2024 for our material currencies are EUR/USD 1.10 and GBP/USD 1.25.
Hedge effectiveness is assessed at the inception of the hedge relationship and on an ongoing basis to ensure that an economic
relationship exists between the hedged item and the hedging instrument. The Group enters into hedge relationships where the critical
terms of the hedging instrument match exactly with the terms of the hedged item. The Group performs a qualitative and, where
necessary, a quantitative assessment of effectiveness.
For foreign currency inventory purchases, ineffectiveness may arise if the timing or amount of the forecast transaction changes
from what was originally estimated or if there are changes in the credit risk of the Group or the derivative counterparty. Foreign
currency basis spread of the derivative has been excluded from the hedge designation. The non-designated element is immediately
recognised in the income statement. The amount is immaterial in both years.
Non-designated hedges
The Group has entered into certain derivatives to provide a hedge against fluctuations in the income statement arising from balance
sheet positions. At 31 January 2024, the Sterling equivalent amount of such contracts is £463m (2022/23: £481m). These have not
been accounted for as hedges, since the fair value movements of the derivatives in the income statement offset the retranslation of
the balance sheet positions. These include short-term foreign exchange contracts. These are located in the derivative liability line in
the consolidated balance sheet with a carrying amount of £1m.
The Group has reviewed all significant contracts for embedded derivatives and none of these contracts has any embedded derivatives
which are not closely related to the host contract and therefore the Group is not required to account for these separately.
The Group enters into netting agreements with counterparties to manage the credit and settlement risks associated with over-the-
counter derivatives. These netting agreements and similar arrangements generally enable the Group and its counterparties to settle cash
flows on a net basis and set-off liabilities against available assets in the event that either party is unable to fulfil its contractual obligations.
Offsetting of derivative assets and liabilities:
Net amounts of Gross amounts
Gross amounts derivatives
of derivatives not
Gross amounts offset in the presented in the offset in the
of recognised consolidated consolidated consolidated
£ millions
derivatives balance sheet balance sheet
balance sheet
Net amount
At 31 January 2024
Derivative assets
2
–
2
(2)
–
Derivative liabilities
(24)
–
(24)
2
(22)
At 31 January 20
23
Derivative assets
16
–
16
(16)
–
Derivative liabilities
(52)
–
(52)
16
(36)
Net investment hedges
Foreign currency denominated lease liabilities are designated as hedging the exposure to movements in the spot retranslation of the
Group’s investment in foreign subsidiaries. The gains and losses on retranslation of the hedging instruments are presented in the
translation reserve within other reserves to offset gains and losses on the hedged balance sheet exposure. The nominal values of
these lease liabilities is £232m (2022/23: £197m). The amount recognised in the translation reserve is a gain of £9m (2022/23: £3m
loss). There is no ineffectiveness for 2023/24. The cumulative total amount recognised in the translation reserve in relation to net
investment hedges is a loss of £103m (2022/23: £112m).
159Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
24 Derivatives continued
Categories of financial instruments
The table below sets out the carrying amount of financial assets and liabilities for each financial instrument category as defined by IFRS 9:
2023/24
2022/23
Fair value
Fair value
through other
Fair value
through other
Fair value
comprehensive
through
Amortised
comprehensive through profit Amortised
£ millions
income
profit or loss
cost
Total
income or loss
cost
Total
Cash and cash equivalents
–
–
360
360
–
–
286
286
Trade and other receivables
– current
2
–
–
254
254
–
–
10
10
Trade and other receivables
– non-current
2
–
–
6
6
–
–
272
272
Derivative assets
2
–
–
2
16
–
–
16
Trade and other payables – current
2
–
–
(1,793)
(1,793)
–
–
(1,846)
(1,846)
Trade and other payables
– non-current
2
–
–
(3)
(3)
–
–
(4)
(4)
Derivative liabilities
– current
(22)
(1)
–
(23)
(47)
–
–
(47)
Derivative liabilities
– non-current
(1)
–
–
(1)
(5)
–
–
(5)
Borrowings
– current
–
–
(7)
(7)
–
–
(16)
(16)
Borrowings
– non-current
–
–
(102)
(102)
–
–
(102)
(102)
Lease liabilities
– current
–
–
(366)
(366)
–
–
(343)
(343)
Lease liabilities
– non-current
–
–
(2,001)
(2,001)
–
–
(2,101)
(2,101)
Financial assets and liabilities
(21)
(1)
(3,652)
(3,674)
(36)
–
(3,844)
(3,880)
1
1
1. Relating to derivatives in designated hedge relationships.
2. Excluding non-financial items relating to prepayments, merchandise returns assets and provisions and deferred income, and non-contractual items relating to
other taxation and social security payables and payroll creditors and accruals.
25 Financial risk management
The Group’s treasury function has primary responsibility for managing certain financial risks to which the Group is exposed. The Board
reviews the levels of exposure regularly and approves treasury policies covering the use of financial instruments required to manage
these risks. Kingfisher’s treasury function is not run as a profit centre and does not enter into any transactions for speculative purposes.
In the normal course of business, the Group uses financial instruments including derivatives. The main types of financial instruments
used are fixed term debt, bank loans and deposits, money market funds, interest rate swaps and foreign exchange contracts.
Interest rate risk
Borrowings arranged at floating rates of interest expose the Group to cash flow interest rate risk, whereas those arranged at fixed
rates of interest expose the Group to fair value interest rate risk. The Group manages its interest rate risk by entering into certain
interest rate derivative contracts which modify the interest rate payable on the Group’s underlying debt instruments.
Currency risk
The Group’s principal currency exposures are to the Euro, US Dollar, Polish Zloty and Romanian Leu. The Euro, Polish Zloty and
Romanian Leu exposures are operational and arise through the ownership of retail businesses in France, Spain, Portugal, the Republic
of Ireland, Poland and Romania.
In particular, the Group generates a substantial part of its profit from the Eurozone and, as such, is exposed to the economic
uncertainty of its member states. The Group continues to monitor potential exposures and risks and consider effective risk
management solutions.
It is the Group’s policy not to hedge the translation of overseas earnings into Sterling. In addition, the Group has significant
transactional exposure arising on the purchase of inventories denominated in US Dollars, which it hedges using forward foreign
exchange contracts. Under Group policies, the Group’s operating companies are required to hedge committed inventory purchases
and a proportion of forecast inventory purchases arising in the next 18 months. This is monitored on an ongoing basis.
The Group also has exposure to certain leases denominated in currencies which are different from the functional (reporting)
currencies of the lessee. To reduce the Group’s exposure to this, most of the affected lease liabilities have been designated as net
investment hedges of Group assets held in the same currency.
160 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
The Group’s policy is to manage the interest rate and currency profile of its debt and cash using derivative contracts. The effect
of these contracts on the Group’s net debt is as follows:
2023/24
Sterling
Euro
US Dollar
Other
£ millions
Fixed
Floating
Fixed
Floating
Fixed
Floating
Fixed
Floating
Total
At 31 January 2024
Net
(debt)/cash before financing
derivatives and lease liabilities
–
(10)
(2)
135
–
90
–
38
251
Financing derivatives
–
(391)
–
85
–
305
–
1
–
Lease liabilities
 (1,722)
–
(596)
–
–
–
(49)
–
(2,367)
Net
(debt)/cash
(1,722)
(401) (598)
220
–
395
(49)
39
(2,116)
2022/23
Sterling
Euro
US Dollar
Other
£ millions
Fixed
Floating
Fixed
Floating
Fixed
Floating
Fixed
Floating
Total
At 31 January 2023
Net
cash/(debt) before financing
derivatives and lease liabilities
 – 9 (2) 105 – 28 – 28 168
Financing derivatives
 – (425) – 39 – 326 – 62 2
Lease liabilities
 (1,821) – (582) – – – (41) – (2,444)
Net
(debt)/cash
(1,821)
(416) (584) 144 – 354 (41) 90 (2,274)
Financial instruments principally affected by interest rate and currency risks, being the significant market risks impacting the Group, are
borrowings, deposits and derivatives. The following analysis illustrates the sensitivity of net finance costs (reflecting the impact on profit) and
derivative cash flow hedges (reflecting the impact on other comprehensive income) to changes in interest rates and foreign exchange rates.
2023/24
2022/23
Net finance Net finance
£ millions
costs costs
Effect of 1% rise in interest rates on net finance costs
Sterling
 (4) (4)
Euro
2
1
US Dollar
4
4
Other
–
1
Due to the Group’s hedging arrangements and offsetting foreign currency assets and liabilities, there is no significant impact on profit from
the retranslation of financial instruments.
2023/24
2022/23
Derivative Derivative
cash flow cash flow hedges
£ millions
hedges increase increase
Effect of 10% appreciation in foreign exchange rates on derivative cash flow hedges
US Dollar against Sterling
69
50
US Dollar against Euro
22
36
US Dollar against other
9
20
The impact of changes in foreign exchange rates on cash flow hedges results from retranslation of forward purchases of US Dollars used
to hedge forecast US Dollar purchases of inventories. The associated fair value gains and losses are deferred in equity until the purchases
occur. See note 24 for further details.
The sensitivity analysis excludes the impact of movements in market variables on the carrying amount of trade and other payables
and receivables, due to the low associated sensitivity, and are before the effect of tax. It has been prepared on the basis that the
Group’s debt, hedging activities, hedge accounting designations, and foreign currency proportion of debt and derivative contracts
remain constant, reflecting the positions at 31 January 2024 and 31 January 2023 respectively. As a consequence, the analysis relates
to the position at those dates and is not necessarily representative of the years then ended. In preparing the sensitivity analysis it is
assumed that all hedges are fully effective. The effects shown above would be reversed in the event of an equal and opposite change
in interest rates and foreign exchange rates.
161Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
25 Financial risk management continued
Liquidity risk
The Group 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.
At 31 January 2024, the Group had an undrawn revolving credit facility (RCF) of £550m, of which £46m is due to expire in May 2025,
with the balance expiring in May 2026.
The following table analyses the Group’s financial liabilities and derivatives into relevant maturity groupings based on the remaining
period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows (including interest) and as such may differ from the amounts disclosed on the balance sheet.
2023/24
Less than More than
£ millions
On demand 1 year
1-2 years
2-3 years
3-4 years
4-5 years
5 years Total
At 31 January 202
4
Bank overdrafts
(7)
–
–
–
–
–
–
(7)
Trade and other payables
1
–
(1,793)
(3)
–
–
–
–
(1,796)
Bank loans
and fixed term debt
–
(6)
(105)
(1)
(1)
–
–
(113)
Lease liabilities
–
(470)
(439)
(395)
(339)
(283)
(1,107)
(3,033)
Derivative financial liabilities:
Derivative contracts
– receipts
–
788
39
–
–
–
–
827
Derivative
contracts – payments
–
(812)
(41)
–
–
–
–
(853)
Derivative financial assets:
Derivative contracts
– receipts
–
442
16
–
–
–
–
458
Derivative contracts
– payments
–
(439)
(15)
–
–
–
–
(454)
2022/23
Less than More than
£ millions
On demand
1 year
1-2 years
2-3 years
3-4 years
4-5 years
5 years
Total
At 31 January 2023
Bank overdrafts
(16)
–
–
–
–
–
–
(16)
Trade and other payables
1
–
(1,846)
(4)
–
–
–
–
(1,850)
Bank loans
and fixed term debt
–
(5)
(105)
–
–
–
–
(110)
Lease
liabilities
–
(456)
(439) (399) (353) (300) (1,241) (3,188)
Derivative financial liabilities:
Derivative contracts
– receipts
–
996
100
–
–
–
–
1,096
Derivative contracts
– payments
–
(1,043)
(107)
–
–
–
–
(1,150)
Derivative financial
assets:
Derivative contracts
– receipts
–
658
3
–
–
–
–
661
Derivative contracts – payments
–
(643)
(3)
–
–
–
–
(646)
1. Excluding non-financial items relating to deferred income and merchandise returns provisions and non-contractual items relating to other taxation and social
security payables and payroll creditors and accruals.
162 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Credit risk
The Group manages credit risk from investing activities in accordance with treasury policy. The Group deposits surplus cash with a
number of banks with strong long-term credit ratings (BBB and above) and with money market funds with AAA credit ratings offering
same-day liquidity. An exposure limit for each counterparty is agreed by the Board covering the full value of deposits and the fair
value of derivative assets. Credit risk is also managed by spreading investments and entering into derivative contracts across several
counterparties. As of 31 January 2024 the highest total cash investment with a single counterparty was £21m (2022/23: £7m).
The table below analyses the Group’s cash and cash equivalents and derivative assets by credit exposure, excluding cash held in
stores and cash in transit.
Credit rating of counterparty
£ millions
AAA
AA+
AA
AA-
A+
A
A-
BBB +/-
Other rating
Total
Cash
and cash equivalents
2
115
–
–
–
145
13
1
5
2
281
Derivative assets
–
–
–
–
2
–
–
–
–
2
At 31 January 202
4
115
–
–
–
147
13
1
5
2
283
1
Credit rating of counterparty
£ millions
AAA
AA+
AA
AA-
A+
A
A-
BBB +/-
Other rating
Total
Cash
and cash equivalents
2
1
–
–
–
208
7
7
3
–
226
Derivative assets
–
–
–
–
14
2
–
–
–
16
At 31 January 202
3
1
–
–
–
222
9
7
3
–
242
1
1. Standard & Poor’s equivalent rating shown. The Group determines this rating with reference to the majority credit rating from either Standard & Poor’s,
Moody’s or Fitch where applicable.
2. Cash and cash equivalents excludes cash held in stores and cash in transit balances of £79m (2022/23: £60m).
The Group applies the low credit risk simplification under IFRS 9 for expected credit losses relating to cash at bank, short-term
deposits and money market funds. The resulting expected credit losses are not significant.
The Group’s exposure to credit risk at the reporting date is the carrying value of trade and other receivables, cash at bank, short-
term deposits and the fair value of derivative assets. Trade and other receivables mainly relate to trade receivables and rebates
which comprise low individual balances with short maturity spread across a large number of unrelated customers and suppliers,
resulting in low credit risk levels. They do not have a significant financing component and therefore the Group measures expected
credit losses using lifetime expected losses.
The estimated lifetime expected losses are based on historical loss rates adjusted where necessary for expected changes in
economic conditions.
At 31 January 2024, trade and other receivables that are past due amount to £44m (2022/23: £47m), of which £4m (2022/23: £7m)
are over 120 days past due.
Capital risk
Capital risk management disclosures are provided in the Financial Review on pages 53 to 54.
26 Deferred tax
£ millions
2023/24
2022/23
Deferred tax assets
10
16
Deferred tax liabilities
 (207) (205)
(197)
(189)
163Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
26 Deferred tax continued
Deferred tax assets and liabilities are offset against each other when they relate to income taxes levied by the same tax jurisdiction and
when the Group intends, and has the legally enforceable right, to settle its current tax assets and liabilities on a net basis.
2023/24
Accelerated Short-term Post- Investment in
tax Gains on timing employment
£ millions
depreciation
property
Leases
differences
Tax losses
benefits subsidiaries
Other
Total
At 1 February 202
3
(215)
(56)
130
44
1
(99)
(1)
7
(189)
(Charge)/credit to income
statement
(15)
4
(10)
(7)
–
(2)
1
(1)
(30)
(Charge)/c
redit to equity
–
–
(2)
1
–
22
–
(2)
19
Exchange differences
3
2
–
–
–
(2)
–
–
3
At 31 January 2024
(227)
(50)
118
38
1
(81)
–
4
(197)
2022/23
Accelerated Short-term Post- Investment in
tax Gains on timing employment
£ millions
depreciation property Leases differences Tax losses benefits subsidiaries Other Total
At 1 February 2022
(170)
(61)
127
42
1
(197)
(1)
(7)
(266)
(Charge)/credit to income
statement
 (38) 7 – 2 – 2 – 1 (26)
Credit/(charge) to equity
 – – 1 (1) – 94 – 13 107
Exchange differences
 (7) (2) 2 1 – 2 – – (4)
At 31 January 202
3
(215)
(56) 130 44 1 (99) (1) 7 (189)
At the balance sheet date, the Group has unused trading tax losses of £223m (2022/23: £215m) available for offset against future profits. A
deferred tax asset has been recognised in respect of £1m of such losses (2022/23: £1m). No deferred tax asset has been recognised in
respect of the remaining £222m (2022/23: £214m) due to the unpredictability of future profit streams. Included in this amount there are tax
losses arising in Romania of £149m (2022/23: £141m) which can only be carried forward for a maximum of seven years. Of these, £10m will
expire in the next twelve months, £98m in the next two to five years, and £41m in the next six to seven years. Other unrecognised losses
may be carried forward indefinitely.
At the balance sheet date, the Group also has unused capital tax losses of £10m (2022/23: £10m) available for offset against future
capital gains. No deferred tax asset has been recognised in the year in respect of such losses (2022/23: £nil). All of these losses may
be carried forward indefinitely.
A deferred tax liability of £1m (2022/23: £1m) has been recognised in the period, reflecting the withholding tax anticipated to arise in
light of a planned repatriation of certain earnings that were generated in the current year. Except for this liability, all other unremitted
earnings of overseas subsidiaries and joint ventures are continually reinvested by the Group. Therefore, as no tax is expected to be
payable on these earnings in the foreseeable future, no deferred tax liabilities are recorded in relation to them. Additional earnings
which could be remitted on which there would be tax to pay total £241m (2022/23: £235m).
27 Provisions
Onerous
property
£ millions
contracts
Restructuring
Total
At 1 February 2023
4
16
20
Charged
to income statement
–
6
6
Released to income statement
(2)
–
(2)
Utilised in the year
–
(7)
(7)
Exchange differences
–
(1)
(1)
At 31 January 202
4
2
14
16
Current liabilities
1
8
9
Non
-current liabilities
1
6
7
2
14
16
164 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Onerous property contracts exclude contracts related to restructuring programmes which are included in the restructuring provisions.
The provisions are based on the present value of future cash outflows relating to rates and service charges. Rental obligations under
onerous property contracts are included within lease liabilities.
Restructuring provisions include both the cost of people change and the cost to exit stores and property contracts.
Restructuring provisions predominately relate to costs in France to restructure the business as part of the Group’s legacy
transformation and store closure plans. Amounts charged to the income statement in the current year of £6m are principally
related to operating model restructuring costs incurred in the year. Refer to note 6 for further details.
The ultimate costs and timing of cash flows related to the above provisions are largely dependent on the timing of the related
people costs.
28 Post-employment benefits
The Group operates a variety of post-employment benefit arrangements covering both funded and unfunded defined benefit
schemes and defined contribution schemes. The most significant defined benefit and defined contribution schemes are in the UK.
The principal overseas defined benefit schemes are in France, where they are mainly retirement indemnity in nature.
Defined contribution schemes
Costs for the Group’s defined contribution pension schemes, at rates specified in the individual schemes’ rules, are as follows:
£ millions
2023/24
2022/23
Charge to operating profit
50
47
From July 2012, an enhanced defined contribution pension scheme was offered to all UK employees. Eligible UK employees have been
automatically enrolled into the scheme since 31 March 2013.
Defined benefit schemes
The Group’s principal defined benefit arrangement is its funded, final salary pension scheme in the UK. This scheme was closed to
new entrants from April 2004 and was closed to future benefit accrual from July 2012.
The scheme operates under trust law and is managed and administered by the Trustee on behalf of members in accordance with the
terms of the Trust Deed and Rules and relevant legislation. The Trustee Board consists of ten Trustee Directors, made up of five
employer-appointed Directors, one independent Director and four member-nominated Directors. The Trustee Board delegates day-
to-day administration of the scheme to the Group pensions department of Kingfisher plc.
The main risk to the Group is that additional contributions are required if investment returns and demographic experience are worse
than expected. The scheme therefore exposes the Group to actuarial risks, such as longevity risk, currency risk, inflation risk, interest
rate risk and market (investment) risk. The Trustee Board regularly reviews such risks and mitigating controls, with a risk register being
formally approved on an annual basis. The assets of the scheme are held separately from the Group and the Trustee’s investment
strategy includes a planned medium-term de-risking of assets, switching from return-seeking to liability-matching assets. Other de-
risking activities have included the scheme acquiring an interest in a property partnership, as set out further below, and entering into
bulk annuities.
A full actuarial valuation of the scheme is carried out every three years by an independent actuary for the Trustee and the last full
valuation was carried out 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. This agreement has been reached with reference to a funding objective that targets a longer-term, low risk funding
position in excess of the minimum statutory funding requirements. This longer-term objective is based on the principle of the scheme
reaching a point where it can provide benefits to members with a high level of security, thereby limiting its reliance on the employer
for future support. The Company monitors the scheme funding level on a regular basis and will reassess with the scheme Trustee the
appropriate level of contributions at future valuations.
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 UK scheme is
recognised in full.
165Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
28 Post-employment benefits continued
The Group is aware of the High Court ruling in the case of Virgin Media Ltd v NTL Pension Trustees II Ltd & Ors and the subsequent
appeal by Virgin Media Ltd, scheduled for 25 June 2024. The Group is monitoring the outcome of the appeal, and any additional
hearings, as well as confirmation from the Government as to whether it will issue new regulations in response to this issue.
UK scheme interest in property partnership
In 2010/11, the Group established a partnership, Kingfisher Scottish Limited Partnership (‘Kingfisher SLP’), as part of an arrangement
with the UK scheme Trustee to address an element of the scheme deficit and provide greater security to the Trustee. The
partnership interests are held by the Group and by the scheme, the latter resulting from investments of £78m and £106m made by the
Trustee in January and June 2011 respectively. These investments followed Group contributions of the same amounts into the
scheme. In accordance with IAS 19, ‘Employee benefits’, the investments held by the scheme in Kingfisher SLP do not represent plan
assets for the purposes of the Group’s consolidated financial statements. Accordingly, the reported pension position does not reflect
these investments.
UK property assets with market values of £83m and £119m were transferred, in January 2011 and June 2011 respectively, into the
partnership and leased back to B&Q Limited. The Group retains control over these properties, including the flexibility to substitute
alternative properties. The Trustee has a first charge over the properties in the event that Kingfisher plc becomes insolvent. The
scheme’s partnership interest entitles it to much of the income of the partnership over the 20-year period of the arrangement. At the
end of this term, Kingfisher plc has the option to acquire the Trustee’s partnership interest in Kingfisher SLP.
The Group has control over the partnership and therefore it is consolidated in these Group financial statements. Accordingly,
advantage has been taken of the exemptions provided by Regulation 7 of the Partnerships (Accounts) Regulations 2008 from the
requirements for preparation, delivery and publication of the partnership’s accounts.
Income statement
2023/24
2022/23
£ millions
UK
Overseas
Total
UK
Overseas
Total
Amounts charged
/(credited) to operating profit
Current service cost
3
8
11
3
10
13
Past service credit
–
(3)
(3)
–
–
–
Administration costs
4
–
4
4
–
4
7
5
12
7
10
17
Amounts
(credited)/charged to net finance costs
Net interest (income)/expense
 (11)
4
(7)
(12)
1
(11)
Total (credited)/charged to income statement
(4)
9
5
(5)
11
6
Of the net charge to operating profit, a £8m charge (2022/23: £13m) and £4m charge (2022/23: £4m) are included in selling and distribution
expenses and administrative expenses respectively. Remeasurement gains and losses have been reported in the statement of
comprehensive income.
166 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Balance sheet
2023/24
2022/23
£ millions
UK
Overseas
Total
UK
Overseas
Total
Present value of defined benefit obligations
 (1,826) (133) (1,959) (1,979) (134) (2,113)
Fair value of scheme assets
2,038
20
2,058
2,230
20
2,250
Net surplus/(deficit) in schemes
212
(113)
99
251
(114)
137
Movements in the surplus or deficit are as follows:
2023/24
2022/23
£ millions
UK
Overseas
Total
UK
Overseas
Total
Net
surplus/(deficit) in schemes at beginning of year
251
(114)
137
540
(130)
410
Current service cost
(3) (8) (11) (3) (10) (13)
Past service credit
–
3
3
–
–
–
Administration costs
(4)
–
(4)
(4)
–
(4)
Net interest income/(expense)
11
(4)
7
12
(1)
11
Net
remeasurement (losses)/gains
(43)
1
(42)
(308)
30
(278)
Contributions paid by employer
–
5
5
14
4
18
Exchange differences
–
4
4
–
(7)
(7)
Net surplus/(deficit) in schemes at end of year
212
(113)
99
251
(114)
137
Movements in the present value of defined benefit obligations are as follows:
2023/24
2022/23
£ millions
UK
Overseas
Total
UK
Overseas
Total
Present value of defined benefit obligations at beginning
of year
(1,979)
(134) (2,113) (2,934) (150) (3,084)
Current service cost
(3)
(8)
(11)
(3)
(10)
(13)
Past service credit
–
3
3
–
–
–
Interest expense
(87)
(4)
(91)
(63) (1) (64)
Remeasurement gains
/(losses) – changes in financial assumptions
136
(2)
134
1,003
32
1,035
Remeasurement gains
/(losses) – changes in demographic
assumptions
54
–
54
(41)
(3)
(44)
Remeasurement (losses)/
gains – experience adjustments
(34)
3
(31)
(59)
1
(58)
Benefits paid
87
5
92
118
4
122
Exchange differences
–
4
4
–
(7)
(7)
Present value of defined benefit obligations at end of year
(1,826) (133) (1,959) (1,979) (134) (2,113)
The present value of UK scheme defined benefit obligations is 50% (2022/23: 51%) in respect of deferred members and 50% (2022/23:
49%) in respect of current pensioners.
The weighted average duration of the UK scheme obligations at the end of the year is 15 years (2022/23: 16 years).
167Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
28 Post-employment benefits continued
Movements in the fair value of scheme assets are as follows:
2023/24
2022/23
£ millions
UK
Overseas
Total
UK
Overseas
Total
Fair value of scheme assets at beginning of year
2,230
20
2,250
3,474
20
3,494
Administration costs
 (4)
–
(4)
(4)
–
(4)
Interest income
98
–
98
75
–
75
Remeasurement losses
– actual return less interest income
(199)
–
(199)
(1,211)
–
(1,211)
Contributions paid by employer
–
5
5
14
4
18
Benefits paid
(87)
(5)
(92)
(118) (4) (122)
Fair value of scheme assets at end of year
2,038
20
2,058
2,230
20
2,250
The fair value of scheme assets is analysed as follows:
2023/24
2022/23
£ millions
UK
Overseas
Total
% of total
UK
Overseas
Total
% of total
Government bonds
1
712
–
712
34%
750
–
750
33%
Corporate bonds
332
–
332
16%
322
–
322
14%
Derivatives
 (49)
–
(49)
(2)%
(16)
–
(16)
(1)%
Equities
33
–
33
2%
46
–
46
2%
Annuities
783
–
783
38%
842
–
842
38%
Cash and other
227
20
247
12%
286
20
306
14%
Total fair value of scheme assets
2,038
20
2,058
100%
2,230
20
2,250
100%
1. Including LDI repurchase agreement liabilities.
All UK scheme assets have quoted prices in active markets, except for £912m (2022/23: £1,078m) of annuity and other assets.
To reduce volatility risk a liability driven investment (‘LDI’) strategy forms part of the Trustee’s management of the UK defined benefit
scheme’s assets, including government bonds, corporate bonds and derivatives. The government bond assets category in the table
above includes gross assets of £1.2bn (2022/23: £1.2bn) and associated repurchase agreement liabilities of £0.5bn (2022/23: £0.4bn).
Repurchase agreements are entered into with counterparties to better offset the scheme’s exposure to interest and inflation rates,
whilst remaining invested in assets of a similar risk profile. Interest rate and inflation rate derivatives are also employed to
complement the use of fixed and index-linked bonds in matching the profile of the scheme’s liabilities.
Following an agreement with the Trustee as part of the 2022 triennial funding valuation, no contributions are expected to be paid to
the UK and overseas pension schemes by the Group during the next financial year.
Principal actuarial valuation assumptions
The assumptions used in calculating the costs and obligations of the Group’s defined benefit pension schemes are set by the Directors
after consultation with independent professionally qualified actuaries. The assumptions are based on the conditions at the time and
changes in these assumptions can lead to significant movements in the estimated obligations, as illustrated in the sensitivity analysis.
The UK scheme discount rate is derived using a single equivalent discount rate approach, based on the yields available on a portfolio
of high-quality Sterling corporate bonds with the same duration as that of the scheme liabilities.
2023/24
2022/23
Annual % rate
UK
Overseas
UK
Overseas
Discount rate
4.85
3.45
4.50
3.50
Price inflation
3.10
2.40
3.25
2.40
Rate of pension increases
2.95
–
3.15
–
Salary escalation
n/a
2.40
n/a
2.40
168 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
For the UK scheme, the mortality assumptions used for IAS 19 purposes have been selected with regard to the characteristics
and experience of the membership of the scheme as assessed from time to time relating to triennial funding valuations. The base
mortality assumptions have been derived using an analysis of current mortality rates carried out by Club Vita for the Trustee and
the CMI life expectancy projection model data published by the UK actuarial profession. The latter allowance is in line with CMI 2022
improvements subject to a long-term rate of 1.5% p.a. for both males and females. The assumptions for life expectancy of UK scheme
members are as follows:
Years
2023/24
2022/23
Age to which current pensioners are expected to live (60 now)
–
Male
85.6
86.2
–
Female
88.3
88.7
Age to which future pensioners are expected to live (60 in 15 years’ time)
–
Male
86.9
87.5
–
Female
90.4
90.8
The following sensitivity analysis for the UK scheme shows the estimated impact on the obligation resulting from changes to key actuarial
assumptions, whilst holding all other assumptions constant.
Assumption
Change in assumption
Impact on defined benefit obligation
Discount rate
Increase/decrease by 0.5%
Decrease/increase by £137m
Price
inflation
Increase/decrease by 0.5%
Increase/decrease by £120m
Rate of pension increases
Increase/decrease by 0.5%
Increase/decrease by £113m
Mortality
Increase/decrease in life expectancy by one year
Increase/decrease by £66m
Due to the asset-liability matching investment strategy, the above impacts on the obligations of changes in discount rate and price inflation
would be significantly offset by movements in the fair value of the scheme assets.
29 Share capital
Number
of ordinary Ordinary
shares share capital
millions £ millions
Allotted, called up and fully paid:
At 1 February 2023
1,940
305
New shares issued under share schemes
2
–
Purchase of own shares for cancellation
(67)
(11)
At 31 January 202
4
1,875
294
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
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 Group purchased 67 million (2022/23: 131 million) of the Company’s own shares for cancellation at a cost of £160m
(2022/23: £337m) as part of its capital returns programme.
169Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
30 Other reserves
2023/24
Translation Cash flow hedge
£ millions
reserve
reserve
Other
Total
At 1 February 20
23
150
(24)
159
285
Inventory cash flow hedges
– fair value losses
–
(32)
–
(32)
Tax on items that will not be reclassified subsequently to profit or loss
–
6
–
6
Currency translation differences
Group
(3)
–
–
(3)
Joint ventures and associates
(1)
–
–
(1)
Transferred to income statement
(2)
–
–
(2)
Inventory cash flow hedges
– losses transferred to income statement
–
12
–
12
Tax on items that may be reclassified subsequently to profit or loss
–
(2)
–
(2)
Other comprehensive
expense for the year
(6)
(16)
–
(22)
Inventory cash flow hedges
– losses transferred to inventories
–
33
–
33
Tax on equity items
–
(6)
–
(6)
At 31 January 2024
144
(13)
159
290
2022/23
Translation Cash flow hedge
£ millions
reserve
reserve
Other
Total
At 1 February 2022
10 27 159 196
Inventory cash flow hedges
– fair value gains
–
58 – 58
Tax on items that will not be reclassified subsequently to profit or loss
–
(12)
–
(12)
Currency translation differences
Group
129
– – 129
Joint ventures and associates
11
– – 11
Inventory cash flow hedges
– gains transferred to income statement
–
(5) – (5)
Other comprehensive income for the year
140
41
–
181
Inventory cash flow hedges
– gains transferred to inventories
– (117) – (117)
Tax on equity items
– 25 – 25
At 31 January 2023
150
(24)
159
285
The ‘other’ category of reserves represents the premium on the issue of convertible loan stock in 1993 and the merger reserve relating to
the acquisition of Darty in 1993.
31 Share-based payments
2023/24
2022/23
Number of Weighted Number of Weighted
options average options average
thousands exercise price £ thousands exercise price £
Outstanding at beginning of year
58,946
0.52
50,503
0.62
Granted during the year
1
25,235
0.45
24,133
0.55
Forfeited and expired during the year
(5,470)
1.12
(3,445) 1.59
Exercised during the year
(7,375)
0.45
(12,245) 0.68
Outstanding at end of
year
71,336
0.46
58,946
0.52
Exercisable at end of year
6,854
0.52
5,976
0.45
1. The weighted average exercise price for options granted during the year represents a blend of nil price Performance Share Plan and Alignment Share awards,
and discounted Sharesave options (see below)
Information on the share schemes is given in note 12 of the Company’s separate financial statements.
Options have been exercised on a regular basis throughout the year. On that basis, the average share price during the year, rather
than at the date of exercise, is £2.41 (2022/23: £2.53). 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 5.4 years (2022/23: 5.6 years).
170 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
The Group recognised a total expense of £22m in the year ended 31 January 2024 (2022/23: £19m) relating to equity-settled share-
based payment transactions.
The fair value of share options and deferred shares is determined by independent valuers using Black-Scholes and stochastic option
pricing models. The inputs of the principal schemes into these models are as follows:
Share price Exercise Expected Expected Dividend Risk free Fair
Date of at grant price life volatility yield rate value
grant £ £ years % % % £
Kingfisher Incentive Share
21/04/16
3.61
–
7
–
–
–
3.61
Plan
– Deferred Bonus
03/05/17
3.40
–
7
–
–
–
3.40
Awards
23/04/18
3.09
–
7
–
–
–
3.09
24/04/19
2.63
–
7
–
–
–
2.63
Performance Share Plan
24/06/22
2.43
–
10
–
–
–
2.43
21/10/22
2.04
–
10
–
–
–
2.43
20/04/23
2.57
–
10
–
–
–
2.57
18/10/23
2.04
–
10
–
–
–
2.57
UK and International
01/11/16
3.64
3.06
5.5
23.5%
2.8%
0.7%
0.39
Sharesave
31/10/17
3.13
2.42
3.5
22.8%
3.4%
0.6%
0.43
31/10/17
3.13
2.42
5.5
22.3%
3.4%
0.8%
0.34
01/11/18
2.62
2.06
3.5
23.2%
4.1%
1.1%
0.33
01/11/18
2.62
2.06
5.5
23.0%
4.1%
0.8%
0.27
01/11/19
2.07
1.59
3.5
25.7%
5.2%
0.4%
0.39
01/11/19
2.07
1.59
5.5
25.1%
5.2%
0.4%
0.35
29/10/20
2.88
2.37
3.5
37.0%
2.8%
0.0%
0.80
29/10/20
2.88
2.37
5.5
32.4%
2.8%
0.0%
0.77
28/10/21
3.31
2.75
3.5
37.4%
3.6%
0.7%
0.88
28/10/21
3.31
2.75
5.5
32.6%
3.6%
0.8%
0.82
28/10/22
2.15
1.77
3.5
38.1%
5.8%
3.3%
0.56
28/10/22
2.15
1.77
5.5
34.0%
5.8%
3.5%
0.53
27/10/23
2.05
1.77
3.5
28.3%
6.1%
4.5%
0.40
27/10/23
2.05
1.77
5.5
34.4%
6.1%
4.3%
0.48
Alignment Shares
19/07/16
3.32
–
10
–
–
–
3.32
24/04/17
3.37
–
10
–
–
–
3.37
23/10/17
3.03
–
10
–
–
–
3.03
23/04/18
3.09
–
10
–
–
–
3.09
29/10/18
2.50
–
10
–
–
–
2.50
24/04/19
2.63
–
10
–
–
–
2.55
30/07/19
2.23
–
10
–
–
–
2.04
21/10/19
2.15
–
10
–
–
–
2.05
28/07/20
2.49
–
10
–
–
–
2.38
23/10/20
3.20
–
10
–
–
–
3.20
22/04/21
3.60
–
10
–
–
–
3.46
21/10/21
3.41
–
10
–
–
–
3.41
Transformation Incentive
19/07/16
3.32
–
10
–
–
–
3.32
Delivering Value Incentive
30/07/19
2.24
–
10
–
–
–
1.75
04/05/21
3.57
–
10
–
–
–
3.19
1
2
3
4
1. Expected life is disclosed based on the UK schemes. For the Kingfisher Incentive Share Plan scheme in the UK, the expiry date is 7 years from the date of grant.
For the Performance Share Plan, Transformation Incentive award and Alignment Share award the expiry date is 10 years from the date of grant. Expiry of the
overseas Alignment Share award is 3 years from the date of grant.
2. Expected volatility was determined for each individual award (or relevant components of an award), by calculating the historical volatility of the Group’s share
price (plus reinvested dividends) immediately prior to the grant of the award, over the same period as the vesting period of each award, adjusted by
expectations of future volatility.
3. As these awards are made under an approved SAYE scheme, option holders cannot be compensated for dividends foregone. As such the historical dividend
yield is used, calculated as dividends announced in the 12 months prior to grant as a percentage of the share price on the date of grant.
4. Risk free rate was determined for each individual award (or relevant components of an award).
171Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
32 Cash generated by operations
£ millions
2023/24
2022/23
Operating profit
580
723
Share of post
-tax results of joint ventures and associates
1
(5)
Depreciation and amortisation
641
582
Net impairment
losses
87
155
Gain on disposal of investments in
associates
(2)
–
Lease gains
(7) (2)
Share
-based compensation charge
22
19
Decrease/(i
ncrease) in inventories
132
(234)
Increase
in trade and other receivables
(6) (44)
Decrease in trade and other payables
(14)
(196)
Movement in provisions
(3)
(13)
Movement in post
-employment benefits
7
(1)
Cash generated by operations
1,438
984
33 Net debt
£ millions
2023/24
2022/23
Cash and cash equivalents
360
286
Bank overdrafts
(7) (16)
Cash and cash equivalents and bank overdrafts
353
270
Bank
loans
(3)
(3)
Fixed term debt
(99)
(99)
Lease liabilities
(2,367)
(2,444)
Net financing derivatives
–
2
Net debt
(2,116)
(2,274)
£ millions
2023/24
2022/23
Net debt at beginning of year
 (2,274) (1,572)
Net
increase/(decrease) in cash and cash equivalents and bank overdrafts
84
(555)
Issue of fixed term debt
–
(99)
Net cash flow
1
84
(654)
Movements in lease liabilities
71
(41)
Exchange differences
and other non-cash movements
3
(7)
Net debt at end of year
 (2,116) (2,274)
1. Refer to the glossary for the definition of net cash flow.
172 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
2023/24
Contract to
Borrowings purchase own Total
(excluding bank Net financing shares for financing
£ millions
overdrafts) derivatives Lease liabilities cancellation liabilities
At 1 February 202
3
(102)
2
(2,444)
(7) (2,551)
Lease rental payments
–
–
474
–
474
Shares purchased for cancellation
–
–
–
160
160
Interest paid
7
–
–
–
7
Cash outflow relating to financing liabilities
7
–
474
160
641
Interest charge
(7)
–
(126)
–
(133)
Lease liability additions
–
–
(253)
–
(253)
Other movements in lease liabilities
–
–
(26)
–
(26)
Recognised liability due to share purchase commitments
–
–
–
(153)
(153)
Fair value movements and e
xchange differences
–
(2)
8
–
6
At 31 January 202
4
(102)
–
(2,367)
–
(2,469)
2022/23
Contract to
Borrowings purchase own Total
(excluding bank Net financing shares for financing
£ millions
overdrafts) derivatives Lease liabilities cancellation liabilities
At 1 February 202
2
(2)
(3) (2,376) (69) (2,450)
Issue of fixed term debt
(99) – – – (99)
Lease rental payments
– – 453 – 453
Shares purchased for cancellation
– – – 337 337
Interest paid
1 3 – – 4
Cash (inflow)/outflow relating to financing liabilities
(98)
3
453
337
695
Interest charge
(1)
(3)
(124)
–
(128)
Lease liability additions
–
–
(335)
– (335)
Other movements in lease liabilities
–
–
(35)
– (35)
Recognised liability due to share
purchase commitments
–
–
–
(275)
(275)
Amortisation of issue costs
(1)
–
–
– (1)
Fair value movements and e
xchange differences
– 5 (27) – (22)
At 31 January 2023
(102) 2 (2,444) (7) (2,551)
34 Commitments
Capital commitments contracted but not provided for by the Group at 31 January 2024 amount to £31m (2022/23: £19m).
173Kingfisher 2023/24 Annual Report and Accounts
Notes to the consolidated financial statements continued
35 Contingent liabilities
The Group is subject to claims and litigation arising in the ordinary course of business and provision is made where liabilities are
considered likely to arise on the basis of current information and legal advice.
The Group files tax returns in many jurisdictions around the world and at any one time is subject to periodic tax audits in the ordinary
course of its business. Applicable tax laws and regulations are subject to differing interpretations and the resolution of a final tax
position can take several years to complete. Where it is considered that future tax liabilities are more likely than not to arise, an
appropriate provision is recognised in the financial statements.
In October 2017, the European Commission opened a state aid investigation into the Group Financing Exemption section of the UK
controlled foreign company rules. While the Group has complied with the requirements of UK tax law in force at the time, in April 2019
the European Commission concluded that aspects of the UK controlled foreign company regime partially constitute illegal state aid.
In January 2021, the Group received a charging notice from HM Revenue & Customs for £57m, which was paid in February 2021, with
a further £7m interest paid in April 2021.
The UK Government and the Group, along with other UK-based multinational groups, appealed the European Commission decision to
the European Courts. In June 2022, the General Court of the European Union dismissed several of those appeals, including the UK
Government’s. This decision has been appealed to the European Court of Justice and the hearing took place on 10 January 2024.
The Advocate General’s opinion is expected on 11 April 2024 and the final decision will follow after that, the date of which is not known.
The final impact on the Group remains uncertain but, based upon advice taken, the Group continues to consider that the amount paid
of £64m plus accrued interest of £4m, which is included in non-current assets, will ultimately be recovered.
Whilst the procedures that must be followed to resolve these types of tax issues make it likely that it will be some years before the
eventual outcome is known, the Group does not currently consider the likelihood of adverse outcomes in relation to these matters
(other than those matters for which liabilities have already been recorded) to be probable.
36 Related party transactions
During the year, the Group 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:
2023/24
2022/23
£
millions
Income
Receivable
Income
Receivable
Transactions with
Koçtaş Yapı Marketleri Ticaret A.Ş. in which the Group
holds a 50% interest
Commission and other income
0.5
–
0.3
–
Transactions with Crealfi S.A. in which the Group held a 49% interest
Provision of employee services
0.1
–
0.2
–
Commission and other income
1.5
–
3.9
1.1
Transactions with the Kingfisher Pension Scheme
Provision of administrative services
0.8
0.2
0.9
0.2
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.
The remuneration of key management personnel is given in note 9.
Other transactions with the Kingfisher Pension Scheme are detailed in note 28.
37 Post balance sheet events
An accounting surplus is recognised for the UK defined benefit pension scheme – refer to note 28. The surplus has been recognised on
the basis that the future economic benefits are unconditionally available to the Group, which is assumed to be via a refund assuming the
full settlement of plan liabilities in the event of a plan wind-up. On 22 November 2023, the UK government announced that the authorised
surplus payments charge would be reduced from 35% to 25% from 6 April 2024. The legislation had not been substantively enacted as at
31 January 2024 and the corresponding deferred tax liability therefore continues to be recognised at 35% at the balance sheet date,
although this was enacted on 11 March 2024. Should this legislation have been enacted at the year-end this would have resulted in a
reduction in the deferred tax liability of £32m with a corresponding credit to other comprehensive income.
174 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Company balance sheet
At 31 January 2024
£ millions Notes 2023/24 2022/23
Non-current assets
Property, plant and equipment 7 8
Right-of-use assets 4 12 13
Trade and other receivables 6 2,974 3,472
Investment in subsidiary 5 6,829 6,833
Post-employment benefits 10 9 10
Deferred tax assets 8 6
9,839 10,342
Current assets
Trade and other receivables 6 46 1,295
Derivative assets 9 – 2
Current tax assets 84 77
Cash and cash equivalents 113 93
243 1,467
Total assets 10,082 11,809
Current liabilities
Trade and other payables 7 (5,234) (6,518)
(5,234) (6,518)
Non-current liabilities
Borrowings 8 (99) (99)
Lease liabilities 4 (13) (13)
(112) (112)
Total liabilities (5,346) (6,630)
Net assets 4,736 5,179
Equity
Share capital 11 294 305
Share premium 2,228 2,228
Own shares held in ESOP trust (31) (22)
Retained earnings 1,452 1,886
Capital redemption reserve 82 71
Other reserves 711 711
Total equity 4,736 5,179
The Company’s loss for the year was £55m (2022/23: loss of £18m).
The financial statements of Kingfisher plc (company number 01664812) were approved by the Board of Directors on 24 March 2024
and signed on its behalf by:
Thierry Garnier Bernard Bot
Chief Executive Officer Chief Financial Officer
175Kingfisher 2023/24 Annual Report and Accounts
Company statement of changes in equity
Year ended 31 January 2024
2023/24
£ millions Notes
Share
capital
(note 11)
Share
premium
Own
shares
held
Retained
earnings
Capital
redemption
reserve
Other
reserves
1
Total
equity
At 1 February 2023 305 2,228 (22) 1,886 71 711 5,179
Loss for the year – – – (55) – – (55)
Other comprehensive expense for the year – – – (1) – – (1)
Total comprehensive expense for the year – – – (56) – – (56)
Share-based compensation 12
– – – 5 – – 5
Capital contributions given relating to share-
based payments
– – – 16 – – 16
New shares issued under share schemes
– – – 4 – – 4
Own shares issued under share schemes
– – 15 (15) – – –
Purchase of own shares for cancellation
(11) – – (153) 11 – (153)
Purchase of own shares for ESOP trust
– – (24) – – – (24)
Dividends
– – – (237) – – (237)
Tax on equity items
– – – 2 – – 2
At 31 January 2024
294 2,228 (31) 1,452 82 711 4,736
2022/23
£ millions Notes
Share
capital
(note 11)
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 expense for the year – – – (7) – – (7)
Total comprehensive expense 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
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.
176 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Notes to the Company financial statements
1 General information
The Company is a public company limited by shares and
incorporated in England and Wales, United Kingdom, and is listed
on the London Stock Exchange. 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 67.
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 2024 (‘the year’ or ‘2023/24’) and
were authorised for issue by the Board of Directors on 24 March
2024. The comparative financial year is the year ended
31 January 2023 (‘the prior year’ or ‘2022/23’).
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 2024. 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;
– 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.
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:
2023/24
Year end rate
2022/23
Year end rate
Euro 1.17 1.13
US Dollar 1.27 1.23
Polish Zloty 5.08 5.34
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).
177Kingfisher 2023/24 Annual Report and Accounts
Notes to the Company financial statements continued
2 Principal accounting policies continued
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.
c. Investments
Investments in subsidiaries are included in the balance sheet at
cost, less any provisions for impairment.
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.
178 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
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.
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’).
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.
179Kingfisher 2023/24 Annual Report and Accounts
Notes to the Company financial statements continued
2 Principal accounting policies continued
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.
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.
180 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
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 80 to 83.
Dividend disclosures are provided in note 12 to the Kingfisher plc consolidated financial statements.
£ millions 2023/24 2022/23
Wages and salaries 36 26
Social security costs 5 4
Post-employment benefits – defined contribution 3 2
Share-based compensation 5 3
Employee benefit expenses 49 35
Number 2023/24 2022/23
Average number of persons employed
Administration 306 263
Directors’ remuneration and details of share option exercises are disclosed in the Directors’ Remuneration report on pages 84 to 109. Total
Directors’ remuneration for the year is £9m (2022/23: £4m).
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 loss 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 2023/24 2022/23
Land and buildings 12 13
Net carrying amount 12 13
Additions to right-of-use assets during the year were £nil (2022/23: £13m).
Amounts included in profit and loss
£ millions 2023/24 2022/23
Depreciation of right-of-use assets
Land and buildings (1) (1)
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 2023/24 2022/23
Current – –
Non-current (13) (13)
(13) (13)
181Kingfisher 2023/24 Annual Report and Accounts
Notes to the Company financial statements continued
5 Investments
£ millions
Investment
in subsidiary
At 1 February 2023 6,833
Capital contributions given relating to share-based payments 16
Contributions received relating to share-based payments (20)
At 31 January 2024 6,829
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.
6 Trade and other receivables
£ millions 2023/24 2022/23
Non-current
Owed by Group undertakings
2,974 3,472
2,974 3,472
Current
Owed by Group undertakings 46 1,295
46 1,295
Trade and other receivables 3,020 4,767
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 £nil (2022/23: £307m) and £nil (2022/23: £983m). Both intercompany loans were repaid on 27 July 2023.
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 undertakings
is £nil (2022/23: £nil).
7 Trade and other payables
£ millions 2023/24 2022/23
Current
Owed to Group undertakings 5,204 6,484
Other taxation and social security 5 5
Contract to purchase own shares for cancellation – 7
Accruals and other payables 25 22
5,234 6,518
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 2023/24 2022/23
Non-current
Fixed term debt 99 99
99 99
The fixed term debt represents two GBP term loans maturing in June 2025 and January 2026.
See notes 23 and 33 to the consolidated financial statements for further details.
182 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
9 Derivatives
The fair value of derivatives at the balance sheet date is:
£ millions 2023/24 2022/23
Foreign exchange contracts – 2
Derivative assets – 2
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 2023/24 2022/23
Charge to operating profit 3 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.
183Kingfisher 2023/24 Annual Report and Accounts
Notes to the Company financial statements continued
10 Post-employment benefits continued
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 2023 (58) 68 10
Interest (expense)/income (3) 3 –
Remeasurement gains/(losses)
1
5 (6) (1)
Benefits paid 3 (3) –
At 31 January 2024 (53) 62 9
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
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 2023/24 2022/23
Equities 1 1
Government and corporate bonds 31 32
Annuities 23 25
Cash and other 7 10
Total fair value of scheme assets 62 68
11 Called up share capital
Number of
ordinary shares
millions
Ordinary
share capital
£ millions
Allotted, called up and fully paid:
At 1 February 2023 1,940 305
New shares issued under share schemes 2 –
Purchase of own shares for cancellation (67) (11)
At 31 January 2024 1,875 294
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
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 67 million (2022/23: 131 million) of the Company’s own shares for cancellation at a cost of
£160m (2022/23: £337m) as part of its capital returns programme.
184 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
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’), and Sharesave plans in the UK and Ireland.
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 £2.41 (2022/23: £2.53). 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 6.9 years (2022/23: 6.6 years).
In the current year the Company recognised a total expense of £5m (2022/23: £3m) relating to equity-settled share-based payment
transactions.
The Executive Directors’ awards are disclosed in the Directors’ Remuneration report on pages 84 to 109. 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 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 £83m (2022/23: £81m) 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 and KISP.
The ESOP trust’s shareholding at 31 January 2024 is 10 million shares (2022/23: 7 million shares) with a nominal value of £2m (2022/23:
£1m) and a market value of £23m (2022/23: £19m). 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:
2023/24
2022/23
£ millions Income Receivable Income Receivable
Transactions with Koçtaş Yap Marketleri Ticaret A.Ş. in which the Kingfisher plc
Group holds a 50% interest
Commission and other income 0.5 – 0.3 –
Transactions with the Kingfisher Pension Scheme
Provision of administrative services 0.8 0.2 0.9 0.2
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 84 to 109. Other transactions with the Kingfisher Pension Scheme are detailed in note 10.
185Kingfisher 2023/24 Annual Report and Accounts
Notes to the Company financial statements continued
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 2024 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.
All related 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).
Wholly-owned subsidiary undertakings
ADSR-Real Estate S.A.S.
1
Halcyon Finance Limited
2
L’Immobiliere Castorama S.A.S.
13
Alcedo Finance Limited
2
Horizons 1000 S.A.S.
10
Martin Pecheur Holdings Limited
22
B&Q (Retail) Guernsey Limited
3
KF10 S.A.S.
31
Melani 1 Sp. z o.o.
12
B&Q (Retail) Jersey Limited
4
KF11 S.A.S.
31
New England Paint Company Limited
2
B&Q Ireland Limited
6
KFL8 S.A.S.
1
Paddington Investment Ireland Limited
32
B&Q Limited
a, 5
KFS Sp. z o.o.
15
Screwfix Direct (Ireland) Limited
6
B&Q Properties Chesterfield Limited
5
Kingfisher (Shanghai) Sourcing Consultancy
Co. Ltd
16
Screwfix Direct Limited
d, 8
B&Q Properties Chestnut Retail Park Limited
e, 5
Kingfisher Asia Limited
17
SCREWFIX S.A.S.
1
B&Q Properties Farnborough Limited
5
Kingfisher Développement S.A.S.
1
Screwfix Spares Limited
8
B&Q Properties Investments Limited
20
Kingfisher France Limited
2
SFD Limited
8
B&Q Properties Limited
5
Kingfisher Group Finance B.V.
28
Sheldon Euro Investments Limited
2
B&Q Properties New Malden Limited
5
Kingfisher Group Limited
2
Sheldon Holdings Limited
2
B&Q Properties Nursling Limited
e, 5
Kingfisher Holdings Limited
b, 2
Sheldon Poland Investments Limited
2
B&Q Properties South Shields Limited
5
Kingfisher Information Technology Services
(France) S.A.S.
1
Société Letranne S.C.I
10
B&Q Properties Sutton-in-Ashfield Limited
5
Kingfisher Information Technology Services
(UK) Limited
2
SOCODI S.A.R.L.
1
B&Q Properties Swindon Limited
5
Kingfisher Insurance Designated Activity
Company
19
Trade Point Limited
5
B&Q Properties Witney Limited
5
Kingfisher International France Limited
f, 7
Zeus Land Investments Limited
2
B&Q Properties Wrexham Limited
5
Kingfisher International Holdings Limited
2
Brico Depot Portugal, S.A.
9
Kingfisher International Products B.V.
18
Brico Dépôt S.A.S.
10
Kingfisher International Products France S.A.S.
1
Bricostore Romania S.A.
11
Kingfisher International Products Limited
2
Castim Sp. z o.o.
12
Kingfisher Investissements S.A.S.
13
Castorama Polska Sp. z o.o
12
Kingfisher Marketplaces Limited
g,
2
Castorama France S.A.S.
13
Kingfisher Pension Trustee Limited
2
Dickens Limited
5
Kingfisher Properties Investments Limited
2
Eijsvogel Finance Limited
2
Kingfisher Retail Media France S.A.S.
27
Euro Depot España SAU
14
Kingfisher Sourcing, Eastern Europe, Sp. z o.o.
12
Euro Dépôt Immobilier S.A.S.
10
Kingfisher TMB Limited
5
Geared Up Limited
8
KSO Istanbul Sourcing Ev Geliştirme Ürünleri ve
Hizmetleri Ltd Sti
21
186 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Related undertakings other than wholly-owned subsidiary undertakings
The undertakings denoted with an asterisk (*) are charitable entities/partnerships and do not have a share capital.
B&Q Foundation
5,
*
Fondation Brico Dépôt pour l'Habitat
26,
*
Fondation Castorama
26,
*
We Share Trust (Suisse) S.A.R.L (Switzerland, immediate parent
undertaking 100%, Group undertaking 80%)
24
The Screwfix Foundation
8,
*
Fundatia Bricodepot
11,
*
Fundacja Castorama
12,
*
Fundación Brico Depôt Iberia
14,
*
Kingfisher Services S.A.S. (France, 80%)
30
Kingfisher Scottish Limited Partnership
c, 20, *
Koçtaş Yap Marketleri Ticaret A.Ş. (Turkey, 50%)
23
UNIO S.A.S. (France, 50%)
29
We Share Trust S.A.S. (France, immediate parent undertaking 95.02%,
Group undertaking 76.02%)
h, 25
We Share Trust Limited (UK, immediate parent undertaking 100%, Group
undertaking 80%)
2
WST Contracting S.A.S. (France, immediate parent undertaking 100%,
Group undertaking 80%)
25
a. Kingfisher Investissements S.A.S. holds 45,663,000 Ordinary shares of £0.05 each and 678,420,375 Ordinary shares of £1 each; Kingfisher plc holds 1,000
Special Shares of £0.05 each, and 1,000 Special A Shares of £0.05 each – each representing 100% of the nominal value of each class of share. These
represent 100% of the total issued share capital.
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. Entities dissolved on 20 February 2024.
f. Entity in process of liquidation as at 31 January 2024.
g. Kingfisher International Holdings Limited holds 200 Ordinary A shares, 100 Ordinary B shares, 5 Ordinary C Shares, 5 Ordinary D Shares and 10 Ordinary E
Shares – each of £1 and each representing 100% of the nominal value of each class of share. These represent 100% of the total issued share capital.
h. The total issued share capital comprises 101,890 Ordinary shares of €1 each and 6,416 Preference shares of €1 each.
Registered offices and country of incorporation:
1. Parc d’Activités, Templemars, 59175, France
2. 1 Paddington Square, London, England, W2 1GG, United Kingdom
3. Redwood House, St Julian’s Avenue, St Peter Port, GY1 1WA, Guernsey
4. 3rd Floor, 44 Esplanade, St Helier, JE4 9WG, 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. C/O Teneo Financial Advisory Limited, The Colmore Building, 20 Colmore Circus, Queensway, Birmingham, B4 6AT, United Kingdom
8. Trade House, Mead Avenue, Houndstone Business Park, Yeovil, Somerset, 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, Warszawa, 02-255, Poland
13. Zone Industrielle, Templemars, 59175, France
14. C/la Selva, 10 Inblau Edificio A 1°, 08820 El Prat de Llobregat, Barcelona, Spain
15. ul. Wielicka 28, Kraków, 30-552, 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/o Womble Bond Dickinson (UK) LLP, 2 Semple Street, Edinburgh, EH3 8BL, Scotland, United Kingdom
21. Barbaros Mahallesi Mor Sümbül Sokak, Nidakule Blok No: 7/3, İçkap no: 127, Ataşehir/İstanbul, Turkey
22. 1st – 2nd Floors, 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland
23. Tasdelen Mahallesi Sirri Celik Bulvari Oto Koc Blok No:9 Cekmekoy, Istanbul, Turkey
24. Rue Saint-Léger, 19, c/o Fiducior SA, Genève, 1204, Switzerland
25. 37, rue Catherine de la Rochefoucauld, Paris, 75009, France
26. 40 Avenue Hoche, Paris, 75008, France
27. Route de l'Epinoy, Parc d'Activités, Templemars, 59175, France
28. Basisweg 10, 1043AP Amsterdam, Netherlands
29. 3, rue du Colonel Moll, Paris, 75017, France
30. Parc d'Activités, ZI Route de l'Epinoy, Templemars, 59175, France
31. Parc d'Activités, rue de l'Epinoy, Templemars, 59175, France
32. B. & Q. Warehouse, Liffey Valley Retail Park East, Ascail an Life, Dublin 22, Ireland
187Kingfisher 2023/24 Annual Report and Accounts
Group five year financial summary
£ millions
2019/20 2020/21 2021/22 2022/23 2023/24
Income statement
Sales
11,513 12,343 13,183
13,059
12,980
Retail profit
786 1,003 1,148
923 749
Central costs
(62)
(54)
(60)
(49)
(60)
Share of interest and tax of joint
ventures and associates before
adjusting items
(7)
(3)
(2)
(4)
(16)
Net finance costs before adjusting items
(173)
(160)
(137)
(112)
(105)
Adjusted pre
-tax profit 544 786 949
758
568
Adjusting items (before tax)
(441)
(30)
58
(147)
(93)
Profit
before taxation 103 756 1,007
611 475
Income tax expense (including adjusting items)
(95)
(164)
(164)
(140)
(130)
Profit for the year
8 592 843
471 345
Balance sheet
Goodwill and other intangible assets
2,755 2,747 2,754
2,779
2,766
Property, plant and equipment and investment property
2,996 3,095 3,111
3,235 3,233
Right
-of-use assets 1,916 1,845 1,885
1,947 1,881
Investments in joint ventures and associates
16 20 17
30 19
Assets and liabilities (excluding net debt) held for sale
138 12 6
3 3
Other net current assets
1
424 105 367
931 844
Post-employment benefits
277
359
410
137
99
Other net non
-current liabilities
1
(194)
(218)
(200)
(125)
(125)
Capital
employed 8,328 7,965 8,350
8,937 8,720
Equity shareholders’ funds
5,802 6,571 6,778
6,663 6,604
Net debt
2,526 1,394 1,572
2,274 2,116
Capital employed
8,328 7,965 8,350
8,937 8,720
Other financial data
Like
-for-like sales growth (1.5)% 7.1% 9.9% (2.1)% (3.1)%
Adjusted effective tax rate
26% 23% 22% 22% 27%
Basic earnings per share (pence)
0.4
28.1
40.3
23.8
18.2
Adjusted basic earnings per share (pence)
19.1 28.7 35.2 29.7
21.9
Ordinary dividend per share
(pence) 3.33 8.25 12.40 12.40
12.40
Gross capital expenditure
2
342 281 397 449
363
Number of stores
3
1,367 1,386 1,474 1,572
1,638
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.
188 Kingfisher 2023/24 Annual Report and Accounts
Governance Financial StatementsStrategic Report Other Information
Shareholder information
Financial calendar
Q1 24/25 trading update
1
21 May 2024
Annual General Meeting 20 June 2024
Half-year results
1
17 September 2024
Q3 24/25 trading update
1
25 November 2024
1. 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 2024 AGM will be held at Number 11, Cavendish Square,
London W1G 0AN on Thursday 20 June 2024 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, England, 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
2024 of 3.80p per ordinary share was paid on 17 November
2023.
The table below provides the payment information for the final
dividend of 8.60p per ordinary share, subject to shareholder
approval at the 2024 AGM.
Ex-dividend date 16 May 2024
Record date 17 May 2024
Final date for return of DRIP mandate forms/
currency elections 4 June 2024
Euro exchange rate notification 5 June 2024
Payment date and DRIP purchase 25 June 2024
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
If calling from within the USA: +1 877 248 4237 (+1 877 CITI ADR)
If calling from outside the USA: +1 781 575 4555
Email: citibank@shareholders-online.com
ADR broker contact
Telephone: +1 212 723 4483/+44 (0) 20 7500 2030
Email: michael.oleary@citi.com/michael.woods@citi.com
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
189Kingfisher 2023/24 Annual Report and Accounts
Other InformationOther Information
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 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 59 to 64.
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).
Shareholder information continued
190 Kingfisher 2023/24 Annual Report and Accounts
Strategic Report Governance Financial Statements
Glossary
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 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
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 an indication of the Group’s ongoing rate of tax.
Adjusted
pre-tax profit
(PBT)
Profit before
taxation
A reconciliation of
adjusted PBT is set out in
the Financial Review
Adjusted PBT 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
(PBT) margin
%
No direct
equivalent
Refer to definition Adjusted PBT is used to report the performance of the business at a Group level
and is separately defined. Adjusted PBT margin % represents adjusted PBT 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 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.
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.
Core and
‘big-ticket’
category
sales±
No direct
equivalent
Not applicable Core and ‘big-ticket’ category sales include the sales from non-seasonal
products across all our categories, including ‘big ticket’ sales (i.e., kitchen,
bathroom & storage). It is used as a measure of our non-seasonal related
performance, which is the majority of Group sales.
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.
191
Kingfisher 2023/24 Annual Report and Accounts
Other InformationOther Information
APM
Closest equivalent
IFRS measure Reconciling items to IFRS measure Definition and purpose
E-commerce
sales
penetration %
No direct
equivalent
Refer to definition E-commerce sales penetration % represents 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
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
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, year-on-year
sales growth for stores that have been open for more than one year. It is a
measure to reflect the Group's performance on a comparable basis.
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.
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 % represents marketplace gross sales as a percentage
of 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 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.
Glossary continued
192 Kingfisher 2023/24 Annual Report and Accounts
Strategic Report Governance Financial Statements
APM
Closest equivalent
IFRS measure Reconciling items to IFRS measure Definition and purpose
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 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 provisions. 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, year-on-
year change in net inventory before the impact of store openings and closures. It
is a measure to reflect the Group’s inventory management on a comparable basis.
Seasonal
category
sales±
No direct
equivalent
Refer to definition Seasonal category sales include the sales from certain products within our
outdoor, electricals, plumbing, heating & cooling (EPHC) and surfaces & décor
categories. It is used as a measure of the performance of our sales that are
subject to the season we are in, or prevailing weather conditions.
± Indicates the inclusion of new APMs during FY 23/24. The new APMs in the table above have been introduced to track the performance of our core and
‘big-ticket’ and seasonal category sales.
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 took the decision to suspend the communication of
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). In November 2023, we restarted the communication of monthly sales figures
to both associations, including the retrospective resubmission of September and October 2023 sales data.
‘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 and wholesale 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.
193Kingfisher 2023/24 Annual Report and Accounts
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