Q1 sales down 24% impacted by COVID19. First week of May LFL +2.7% post stores reopening Q1 sales were down 24% at constant FX (LFLs down 24.8%). The positive trends seen in Q4 continued up to 14th March reflecting operational improvements in France and the implementation of a more devolved trading approach across the Group. E-commerce is up 4-fold since lockdown. Stores started reopening in France and the UK in the second half of April with over 95% of Group stores now open (the Republic of Ireland and Spanish stores are still closed). Group LFLs have returned to positive territory yoy in May. Relative sales trends have improved, with Group LFL sales moving from -74% in first week of April (first full week post closure in UK and France) to +2.7% yoy in first week of May (UK +18.7%, France -18.7%, Poland +35.8% and Romania +16%). In the final week of April and first week of May, LFLs were helped by the phased reopening of stores in the UK and France. The first week of May reflect exceptional demand in the UK and Poland in particular. We believe this reflected pent-up demand, though we suspect DIY is likely to have a reasonable summer given consumers are likely to continue spending plenty of time at home. Our sales forecasts had broadly assumed sales down 40% in May/June/July, then down 10% for 3 months, and flat for the rest of the year. We now place these under review. Sufficient liquidity headroom – access to over £2 billion The company has confirmed its eligibility for the Bank of England’s Covid Corporate Financing Facility (CCFF). It also has a €600m (c.£525m) term facility guaranteed by the French State, which has to be drawn down. An un-drawn £250m RCF has been agreed in addition to its original fully drawn 2 RCFs totalling £775m. Management does not envisage having to use the additional facilities under its current planning assumptions. Waiting for strategic update with FY20 results – no date set yet As discussed in our note, When large stores are an advantage published 29/4/20, we expected Kingfisher to be able to implement social distancing within its stores more easily than most and, while there are likely to have been increased costs, this statement shows demand is there. We await Mr Garnier’s strategic update on how the new team is progressing with sorting out the ‘ONE Kingfisher’ strategy, which was poorly implemented by the previous team, and how he will address the long term structural pressures the Group has been under from the shift online, which will have been accelerated with COVID-19, and the move from DIY to DIFM. We still struggle to see where longer term sustainable growth will come from.