Kingfisher (KGF)

Equity Research 22 September 2026 | 6:00PM BST

Kingfisher (KGF.L) Gross margin driven underlying PBT beat drives earnings higher; PT to 360p, Neutral

KGF.L 12m Price Target: 360p Price: 305.7p Upside: 17.8% NEUTRAL Richard Edwards GS View: Kingfisher delivered 1H27 adj. PBT +5% ahead of consensus ex | Goldman Sachs International one-offs, driven by gross margins +70bps yoy despite difficult weather Ben Williams conditions (too hot) impacting B&Q/Brico Depot France, with | Goldman Sachs International outperformance at Screwfix (+5.6% LFL) and Poland (+2.2% LFL). Kingfisher’s strategic growth drivers continue to perform well (trade Hamish Bogdan | Goldman Sachs International +16% ex-Screwfix, E-commerce +16% ex-Screwfix, and marketplace GMV +42% to £372mn with retail profit contribution of £13.4mn +91% yoy). The profit beat in the first half and upgraded FY guidance leads to a Key Data _____________________________________ Market cap: £5.3bn / $7.1bn more evenly weighted FY PBT growth guide (GSe 1H/2H ex one-offs Enterprise value: £7.2bn / $9.6bn 3m ADTV: £17.3mn / $23.2mn +6%/+8%) which we believe provides relief given the current consumer United Kingdom backdrop and prior 2H weighted guide (see our HAC forecast). We Europe General and Food Retail M&A Rank: 3 continue to view the c.9% FY27E FCF yield as supportive for shares Leases incl. in net debt & EV?: Yes

despite our view for a tougher 2H backdrop and spots of sales weakness GS Forecast __________________________________ 1/26 1/27E 1/28E 1/29E in 1H; TP to 360p (from 340p), Neutral rated. Revenue (£ mn) New 12,942.0 13,067.2 13,378.8 13,769.5 Revenue (£ mn) Old 12,942.0 13,184.8 13,548.9 13,955.1 Kingfisher reported £404mn 1H27 adj. PBT (inc. £14mn one-off EPS (p) New EPS (p) Old business rate refund). This was primarily led by gross margin +70bp P/E (X) and 2Q LFL +1% benefiting from strong Screwfix, Poland and Iberia Dividend yield (%) 4.4 4.1 4.1 4.2 FCF yield (%) performances, in part offset by weaker trends from B&Q and Brico CROCI (%)

Depot, with hot weather good for seasonal/cooling products but a N debt/EBITDA (ex lease,X) (0.3) (0.3) (0.3) (0.3)

headwind for building and construction categories. 1H27 dividend 1/26 7/26 1/27E --

per share was 3.8p and FCF was £339mn. EPS (p) --

GS Factor Profile ______________________________ FY27 guidance updated: 1) Adj. PBT £595mn-£635mn inc. £14mn Growth

one-off (from £565mn-£625mn); 2) FCF £480mn-£520mn inc. Financial Returns

£14mn one-off (from £450mn-£510mn); 3) Ongoing share buyback Multiple programme of £300mn, £125mn purchased to date. Integrated

Implications: We update FY27E/28E PBT to £612mn/£630mn (from £588mn/£623mn). This assumes FY27E/FY28E LFL Percentile 20th 40th 60th 80th 100th

+0.6%/+1.5% (from +0.9%/+1.6%), and 2H/FY27E PBT growth of KGF.L relative to Europe Coverage

c.+8%/+9% (c.+8%/+7% ex one-offs; from c.+14%/+5%). TP KGF.L relative to Europe General and Food Retail

increases to 360p (from 340p); Neutral rated. Source: Company data, Goldman Sachs Research estimates. See disclosures for details.

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Kingfisher (KGF.L)

Kingfisher (KGF.L) Balance Sheet (£ mn) _______________________________________ NEUTRAL Rating since Mar 22, 2021 1/26 1/27E 1/28E 1/29E Cash & cash equivalents Accounts receivable Inventory 2,768.0 2,705.2 2,682.9 2,707.9 Ratios & Valuation __________________________________________ Other current assets /26 1/27E 1/28E 1/29E Total current assets 3,574.0 3,548.0 3,568.7 3,640.7 EV/sales (X) 0.5 0.5 0.5 0.5 Net PP&E 3,206.0 3,422.7 3,629.1 3,837.2 Lease adj EV/EBITDAR (X) 5.0 4.8 4.6 4.3 Net intangibles 2,239.0 2,239.0 2,239.0 2,239.0 EV/EBIT (X) Total investments P/E (X)…