Ecommerce now accounts for 18% of Group FY22 sales versus 8% in FY20, helped by the pandemic accelerating the shift online. Kingfisher had to respond fast during COVID, rapidly evolving a store-picked online model and is now building out its service proposition across its operating divisions. It has built a profitable model, helped by a higher average basket size online. By using stores, it can easily flex the ecommerce model up and down with demand, use labour more efficiently, and benefits from reduced stock investment. Orders can be picked and delivered faster with in-store picking. Range and choice is expected to become the new battleground. In March, Kingfisher launched the B&Q marketplace and is looking to roll this out across its European operating companies. The B&Q marketplace will offer customers an additional 100,000 home improvement products within the next 6 months with plans to scale the business to over 4m SKUs within 5 years. Marketplace could become a material new income stream. Kingfisher charges merchants 10-15% commission on gross sales, with an ambition that its marketplace will generate 40% of its online GMV. We would expect most of this revenue to fall through to profits and be margin enhancing due to the relatively low operating costs and low cost of customer acquisition given Kingfisher’s natural online traffic. While we expect the marketplace to be profit additive, the unknown is the cannibalisation impact on its existing sales base. Kingfisher’s valuation (CY22E/CY23E PE of 8.2x/7.9x) does not look that demanding given its cash generation, and appears to reflect the expectation of lower FY23 profits and little growth into FY24. However, it is difficult to see the shares performing given wider macro concerns, and uncertainty remains over what ‘normalised’ future earnings could look like and whether Kingfisher can become a sustainable growth story.