Fnac Darty Sa · EURONEXT:FNAC
Fnac Darty Sa — FY2016 Earnings Presentation
50 slides from Fnac Darty Sa's earnings presentation, February 2017
Slide 1: Full-Year Results
FNAC DARTY - FULL-YEAR ! RESULTS =
Slide 2: Disclaimer
DISCLAIMER Confidential IMPORTANT NOTICE: By attending the meeting where this presentation is given, or by reading the presentation slides, you agree to be bound by the following limitations and qualifications: Certain information included in this presentation is not based on historical facts but on
Slide 3: 2016 Results Key Highlights
2016 RESULTS KEY HIGHLIGHTS 2016 financial results are solid • Group sales up +2.0%1 • Current operating income up 23% • Current Operating Free Cash Flow2 up 17% • Ajusted Reported Net Income2 up 37% Fnac Darty integration progressing rapidly ⇒ €130m synergies to be delivered one year in advance (en
Slide 4: Preliminary Remarks
Bee ay FNAC DARTY 4. i the . o PRELIMINARY a REMARKS S|. “i
Slide 5: New Reporting Segments
NEW REPORTING SEGMENTS FNAC DARTY FNAC DARTY France & Switzerland France France Fnac France Iberian Peninsula Belgium & Netherlands Darty France Spain Belgium Fnac Switzerland Portugal Netherlands Iberian Peninsula Brazil Spain Other Countries Portugal Belgium Benelux Switzerland Fnac Belgium Vanden
Slide 6: Reported & Pro Forma Accounts Definition
REPORTED & PRO FORMA ACCOUNTS DEFINITION Consolidation period for each perimeter Reported accounts Pro forma accounts 2015 2016 2015 2016 FNAC Jan-Dec Jan-Dec Jan-Dec Jan-Dec DARTY / Aug-Dec Jan-Dec Jan-Dec Pro forma adjustments recorded in relation to accounting policy differences and Purchase Pric
Slide 7: Financial Review
FNAC DARTY FINANCIAL REVIEW
Slide 8: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS Group sales up +2.0%1 for the full year 2016 Current operating income up 23% to €203m €9m synergies already delivered Current Operating Free Cash Flow2 up 17% Ajusted Reported Net Income2 up 37% NB : Pro Forma figures except for net income evolution (reported figures) 1 At c
Slide 9: Operational Performance
OPERATIONAL PERFORMANCE ANALYSIS IN PRO FORMA FIGURES
Slide 10: Satisfactory Sales Performance in Q4 2016
SATISFACTORY SALES PERFORMANCE IN Q4 2016 Satisfactory stable Q4 2016 at 2,424€m Q4 2016 sales evolution by geography • Markets under pressure Pro Forma * • Gross margin improving France Switzerland France and Iberian • Fnac sales slightly growing while Darty sales Group Switzerland Peninsula Benelu
Slide 11: FY 2016 Group Sales: +2.0%
FY 2016 GROUP SALES : +2.0%* Context: • H1 benefiting from TV digital switch in France Group sales evolution by quarter – Pro Forma * • Weaker markets in H2 Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 • Underlying consumption environment remains 6.3% sluggish 3.8% • Competition still strong 2.0% 0.0% -0
Slide 12: Current Operating Income Up 23% to €203m Pro Forma
CURRENT OPERATING INCOME UP 23% TO €203M PRO FORMA 2015 2016 Sales up +1.9% and +2.0% at constant Forex Pro % Change €m Pro Forma Forma Gross Margin under control despite Franchise dilutive effect reflecting well managed REVENUES 7,278 7,418 1.9% commercial policy • Gross Margin up +30bp in H2 2016
Slide 13: France and Switzerland: Strong Growth
FRANCE AND SWITZERLAND : STRONG GROWTH €m 2015 2016 % Change Peak in sales in H1 due to TV digital switch, Revenues 5,734 5,854 2.1% good resilience in H2 in more difficult Life-for-like 2.4% markets Current operating Internet and Omnichannel growing faster 131.4 176.3 34.2% income Acceleration of n
Slide 14: Iberian Peninsula: Continuing Progress in Tough Markets
IBERIAN PENINSULA: CONTINUING PROGRESS IN TOUGH MARKETS €m 2015 2016 % Change Contrasted consumption trends Revenues 657 656 -0.2% • Markets difficult and competitive in Spain Life-for-like -0.6% • Portugal performance improving quarter after quarter benefiting from consumption trend Current operati
Slide 15: Benelux: Dynamic Growth, Solid Presence in Belgium
BENELUX : DYNAMIC GROWTH- SOLID PRESENCE IN BELGIUM €m 2015 2016 % Change Positive growth notably driven by internet Revenues 887 908 2.4% and network expansion (+4 stores) Like for Like 1.3% Vanden Borre offering a robust and healthy Current operating 9.6 3.8 -60.0% model income Operating margin 1.
Slide 16: Strong Free Cash Flow Generation
STRONG FREE CASH FLOW GENERATION €m 2015 2016 % Change Current Free cash flow up +17% to €256m Cash flow from operations before tax, dividends and 198 203 2.5% Good management of working capital interest Change in working capital 117 138 17.9% Capex under control CAPEX -103 -117 13.6% Reduced contri
Slide 17: Financial Results
FINANCIAL RESULTS ANALYSIS IN REPORTED FIGURES
Slide 18: 2016 Reported P&L, Adjusted Net Income Up 37%
2016 REPORTED P&L AJUSTED NET INCOME UP 37% 2015* 2016 % Revenues and current income growths €m reported reported Change mainly driven by Darty consolidation Revenues 3,739 5,369 +43.6% Current operating income 85 161 +89.5% Non current charges related to Darty Non-current operating acquisitions: €2
Slide 19: Non Current Operating Income and Expenses
NON CURRENT OPERATING INCOME AND EXPENSES €m 2015 reported* 2016 reported Expenses related to Darty acquisition -6 -21 Restructuring costs -3 -7 Others -1 -11 Total non current operating expenses -10 -39 * Restated following the reclassification of Brazil in discontinued operations 19
Slide 20: Financial Charges
FINANCIAL CHARGES €m 2015 reported * 2016 reported Cost of net indebtedness -6 -53 of w. one-off expenses related to Darty acquisition financing -31 Other financial charges (net)** -5 -23 of w. Darty bond make - whole payment -15 Financial charges (net) -11 -76 of w. one-off expenses related to Dart
Slide 21: Change in Net Debt
CHANGE IN NET DEBT Reported operating free cash flow: €m €151m 86 198 -38 -96 -20 544 157 -208 -12 -1,029 Net cash position Cash Flow from Change in WC Corporate income Operating Interests and Acquisition Increase/decrease Others Net cash position at December 31, operations before requirement tax pa
Slide 22: Long Term Financing Is in Place
LONG TERM FINANCING IS IN PLACE FINANCING MATURITY PROFILE BOND Coupon: 3.25% In € Million 800 €650M Maturity: Sept 2023 700 600 500 400 650 Bond TERM LOAN Euribor +250bps 300 €200M 200 52 81 22 Maturity: avril 2021 100 8 50 Term 0 Loan 2017 2018 2019 2020 2021 and beyond RCF Euribor +200bps Maturit
Slide 23: Balance Sheet
BALANCE SHEET 31/12/2015 31/12/2016 €m Shareholders’ Strong equity 564 1,040 funds Reasonable leverage Net Debt Ownership of a significant real -544 208 estate portfolio from Darty 23
Slide 24: Strategic Review
FNAC DARTY STRATEGIC REVIEW
Slide 25: Fnac Darty Creation of a Leader
FNAC DARTY CREATION OF A LEADER Creating a market leader A market leader in the French electronics, 1 editorial & home appliances retail market 1 A combination of two iconic French brands which will benefit customers Significant synergy potential Combination of two highly recognised 6 2 and well-res
Slide 26: Fnac Darty Profile
FNAC DARTY PROFILE €7,4Bn revenue - 27 000 employees Top 3 European Omnichannel Retailer in household appliances, consumer electronics and entertainment products • Strong leadership positions in key markets • Inspiring, well-respected and complementary brands Dense store network in 10 countries and
Slide 27: Iconic Complementary Brands
ICONIC COMPLEMENTARY BRANDS “L’agitateur “Le contrat culturel” de confiance” Values: Values: Independence, Passion, Discovery Service, Confidence, Accessible 72% spontaneous brand awareness for Editorial Top-of-mind brand awareness in home Products in France(1) appliances in France 47% spontaneous b
Slide 28: Strong Leadership Position
STRONG LEADERSHIP POSITION Attractive online presence(1) Competitive landscape – Ranking by company revenues Amazon 15.9 Revenues in €Bn Fnac Darty 13.6 7.3 Cdiscount 11.1 Ebay 7.4 SNCF 6.3 3.2 La redoute 5.5 1.9 * 1.8 * 1.7 Carrefour 5.4 1.4 Vente privee 5.3 Price minister 5.1 Sources : Omnichannel
Slide 29: A Dense Multiformat Store Network Enhancing Customer Proximity
A DENSE MULTIFORMAT STORE NETWORK ENHANCING CUSTOMER PROXIMITY Complementary networks in France as of 31-Dec-16(1) International presence as of 31-Dec-16 Spain : 29 stores Portugal: 23 stores Belgium: 74 stores Netherlands: 73 stores Switzerland: 6 stores Diversified store formats Franchise 56(2) 96
Slide 30: Fnac Darty Offers Strong Value Creation Potential
FNAC DARTY OFFERS STRONG VALUE CREATION POTENTIAL Commercial Initiatives Omnichannel Digital accross expertise & After Sales Shop in Shop CRM New Services banners Marketplaces Operational synergies Support Purchasing Logistics Deliveries IT functions [ Synergy objective of €130 million brought forwa
Slide 31: Differenciating Omnichannel
NEW INITIATIVES BEYOND SYNERGIES DIFFERENCIATING OMNICHANNEL Store Digital PILLARS EXPERIENCE THREE SEAMLESS Multi-format expansion in Marketplace franchise Mobile Customer service Renowned delivery services Digital store experience Best value proposition: Innovation Omnichannel & Services Customers
Slide 32: Conclusion
E FNAC DARTY CONCLUSION
Slide 33: Conclusion and Outlook
CONCLUSION AND OUTLOOK 2016 results demonstrate Fnac Darty strong potentials €130M Synergies one year ahead of schedule Fnac Darty ready to roll-out new initiatives 33
Slide 34: Appendices
FNAC DARTY SERVICES _ APRES-VENTE ! i APPENDICES
Slide 35: Definitions
DEFINITIONS Pro-forma The figures present the situation by taking into account Darty’s inclusion in the scope of consolidation as from January 1, 2015. The pro-forma financial information includes the consolidated income statements of Fnac and Darty produced on an individual basis after alignment of
Slide 36: KPI - Pro Forma & Reported
KPI - PRO FORMA & REPORTED Reported Pro forma €m 2015 2016 Var. 2015 2016 Var. Revenues 3,739 5,369 43.6% 7,278 7,418 1.9% Current operating income 85 161 89.5% 165 203 23.1% Consolidated net income continued operations 50 22 -56.6% Current* net income continued operations 54 74 +37% Operating free
Slide 37: Q4 and FY Revenue Reported
Q4 AND FY REVENUE REPORTED Change vs Q4 2015 Change vs 2015 at constant at constant FX Q4 2016 FX and 2016 and Like for like Like for like Reported comparable Reported comparable at constant FX at constant FX scope of scope of €m consolidation consolidation France and Switzerland 1,937 81.9% 82.0% 8
Slide 38: Q4 and FY Revenue Pro Forma
Q4 AND FY REVENUE PRO FORMA Change vs Q4 2015 Change vs 2015 at constant FX Q4 2016 at constant FX and Like for like 2016 and comparable Like for like Change comparable Change at constant FX scope of at constant FX scope of €m consolidation consolidation France and 1,937 -0.5% -0.5% -0.3% 5,854 2.1%
Slide 39: Q1-Q2-Q3 Revenue Pro Forma
Q1-Q2-Q3 REVENUE PRO FORMA Change vs Q1 2015 Change vs Q2 2015 Change vs Q3 2015 at constant Q1 at constant FX Q2 at constant Q3 FX and and Like for like FX and Like for like Like for like 2016 Change comparable at constant 2016 Change comparable at constant 2016 Change comparable at constant scope
Slide 40: 2016 Sales by Category Pro Forma
2016 SALES BY CATEGORY PRO FORMA Change 2016 at constant FX and Change comparable scope of €m consolidation Technical products 3,554 2.9% 2.9% Editorial products 1,245 -4.1% -4.2% White goods 1,452 0.2% 0.2% Other products and services 1,167 8.6% 8.8% Total sales 7,418 1.9% 2.0% 40
Slide 41: H1 and H2 Revenue Pro Forma
H1 AND H2 REVENUE PRO FORMA Change vs H1 2015 Change vs H2 2015 at constant FX at constant FX H1 2016 and H2 2016 Like for like and comparable Like for like Change comparable Change at constant FX scope of at constant FX scope of consolidation €m consolidation France and Switzerland 2,602 6.3% 6.4%
Slide 42: H1 and H2 P&L Pro Forma
H1 AND H2 P&L PRO FORMA H1 H2 €m 2016 2016 Revenues 3,304 4,114 Gross Margin 988 1,229 Personnel costs -553 -580 Other expenses -431 -450 Current operating income 4 199 Non-current operating income and expenses -36 -55 Operating income -32 145 42
Slide 43: P&L Pro Forma and Reported
P&L PRO FORMA AND REPORTED 2016 Period Accounting PPA 2016 2016 in €m Reported adjustements adjustements effects** Pro forma Revenues 5,369 2,050 -0 7,418 Current operating income 161 38 7 -3 203 2015 Period Accounting PPA 2015 2015 in €m Reported* adjustements adjustements effects** Pro-forma Reven
Slide 44: Pro Forma EBITDA & EBITDAR
PRO FORMA EBITDA & EBITDAR 2015 2016 Current operating income 165 203 Net depreciation and amortization charges 108 102 EBITDA 273 305 Rents 213 206 EBITDAR 487 511 44
Slide 45: Cash Flow Statement
CASH FLOW STATEMENT €m December 31, 2015 December 31, 2016 Net cash as of January 1 535 544 Operating Free Cash Flow 97 151 Interest paid net of interest and dividens received -3 -20 Acquisition / disposal of subsidiaries net of cash transferred -3 -1,029 Acquisition / disposal of other financial as
Slide 46: Working Capital
WORKING CAPITAL As of As of €m December 31, 2015 December 31, 2016 Inventories 467 1,061 Accounts receivable 87 191 Accounts payable -761 -1,449 Other operational working capital including accounts -286 -608 receivable and payable related to CAPEX Operational Working capital -493 -805 Financial acco
Slide 47: Balance Sheet
BALANCE SHEET Assets in €m FY 2015 FY 2016 Equity and Liabilities in €m FY 2015 FY 2016 Share capital 17 26 Goodwill 332 1,605 Reserves related to equity 497 978 Intangible assets 71 458 Conversion reserves -14 -4 Tangible assets 157 436 Other reserves 57 34 Investments in associates 0 20 Equity Gro
Slide 48: Shareholders' Funds
SHAREHOLDERS’ FUNDS €m 490 2 1 040 -16 564 Shareholder’s Other Increase in capital Others Shareholder’s equity as of comprehensive equity as of December 31, 2015 income December 31, 2016 48
Slide 49: Exchange Rates
EXCHANGE RATES 2015 2016 vs EUR BRL (Brazil) 3.69 3.86 CHF (Switzerland) 1.07 1.09 GBP (UK) 0.73 0.82 NB : average rates 49
Slide 50: Store Network
STORE NETWORK December 31, 2015 December 31, 2016 Owned Franchised Total Owned Franchised Total France and 314 99 413 313 152 465 Switzerland* Iberian Peninsula 48 1 49 50 2 52 Benelux 146 0 146 147 0 147 Group** 508 100 608 510 154 664 *Included 4 Fnac foreign stores: 1 in Morocco,1 in Qatar and 2