Ceconomy Ag · XETR:CEC
Ceconomy — H1 2019/20 Earnings Presentation
37 slides from Ceconomy's earnings presentation, May 14, 2020
Slide 1: Q2/H1 2019/20 Results Presentation
Q2/H1 2019/20 RESULTS PRESENTATION Dr Bernhard Düttmann, Karin Sonnenmoser, Ferran Reverter Düsseldorf, 14 May 2020
Slide 2: Disclaimer and Notes
DISCLAIMER the actions of public authorities and other third parties, many of Such financial information is not necessarily indicative for the which are beyond our control, that could cause actual results, operational results, the financial position and/or the cash flow of the performance or financi
Slide 3: Agenda
Agenda 01 02 03 04 Financial Operations Highlights Outlook Performance Update
Slide 4: Highlights
01 Highlights Date: 14 May 2020 // 4
Slide 5: Solid start to FY 2019/20, then impacted by COVID-19 outbreak
After a solid start into FY 2019/20, the second quarter started off well, but was then impacted by the outbreak of COVID-19 Q1 19/20 Q2 19/20 Q3 19/20 COVID-19 30.09. 31.12. 31.03. 2019 2019 2020 Foundation for a sound FY 2019/20 Solid Q2 interrupted by COVID-19 Strong growth In the first two Profit
Slide 6: Pro-active crisis management to mitigate COVID-19 impacts
CECONOMY has adopted a successful pro-active crisis management approach to mitigate COVID-19 impacts Ensuring a safe Implementing Preparing for the environment comprehensive reopening and a for employees cost and liquidity strong commercial and customers measures comeback Results Presentation Q2/H1
Slide 7: Increased financial flexibility through expanded back-up lines
CECONOMY has increased its financial flexibility by safeguarding and expanding access to substantial back-up lines 1.7 Ensures access to additional liquidity in an unprecedented time €bn RCF Sufficient back-up even for potentially longer lock- down and a possible second wave Mitigation of current CO
Slide 8: Q2 19/20 in a nutshell
CECONOMY’s Q2 19/20 in a nutshell Sales performance and gross margin in March Strong performance in January and February strongly impacted by COVID-19 related store closures Marked increase in pure online sales in March, Lack of sales in combination with high operating supported by successful adapti
Slide 9: Negative COVID-19 impact evident in Q2 financial figures
The negative impact of the COVID-19 pandemic is already evident in the Q2 financial figures –6.6% –131 €m Sales change yoy Adj. EBIT1,2 adjusted for fx-effects and excl. associates3 portfolio changes –157 €m vs. PY Note: 1Adjusted EBIT before non-recurring earnings effects in connection with the reo
Slide 10: Financial Performance
02 Financial Performance Date: 14 May 2020 // 10
Slide 11: Sales decline driven exclusively by COVID-19 store closures
Sales decline driven exclusively by COVID-19 related store closures Q2 Total sales fx- and portfolio adj.1 Q2 Highlights (in €m) –6.6% Fx- and portfolio adjusted1 sales excl. iBood –7.7% at –6.3% 5,015 4,631 DACH: Germany, Austria and Switzerland impacted by store closures in March; Hungary cont
Slide 12: Closure of c. 87% of stores led to c. 28% sales drop in March
Closure of c. 87% of our physical stores led to a drop in Group sales of around 28% in March Q2 Sales development (fx- and portfolio adj.1, yoy change) –6.6% + Remarkable Online growth + Strong development in Germany, Austria and Turkey + Solid Online and − C. 87% of physical S&S growth stores close
Slide 13: Channel shift in March: online growth, Services & Solutions headwind
COVID-19-related channel shift in March led to strong growth in Online, while it was a headwind for Services & Solutions Q2 Online sales1 Q2 Highlights (in €m) +23.7% Online1 growth +26.9% excl. iBood 859 694 Doubling of pure online1 sales in March (+98%) with further ramp-up in April (approx. +
Slide 14: EBIT decline attributable to COVID-19 store closures
EBIT decline essentially attributable to negative sales and margin development in connection with COVID-19 store closures Q2 Gross margin1,2 (in % of sales) OPEX1,2,3 (in % of sales) Q2 Highlights Absolute cost savings 33 €m –2.3%p. 0.7%p. Positive trend development of the gross margin in January/
Slide 15: Reported EBIT impacted by Fnac Darty impairment
Reported EBIT additionally impacted by impairment of Fnac Darty stake Q2 Adj. EBIT1,2 excl. associates to reported EBIT (in €m) + Fnac Darty profit share − Fnac Darty impairment -3 -131 − Expected trailing restructuring expenses -234 -368 Adj. EBIT Q2 19/20 Restructuring-related Other adj. items Rep
Slide 16: EPS impacted by lower earnings and Fnac Darty impairment
EPS impacted by lower operational earnings and Fnac Darty impairment €m Q2 2018/19 Q2 2019/20 Change Q2 Highlights EBITDA 83 102 19 Reported EBITDA includes c. 143 €m IFRS 16 effect EBIT 19 –368 –387 Net financial result 14 –23 –37 Reported EBIT includes c. 3 €m IFRS 16 effect and Fnac Darty imp
Slide 17: Adjusted Free Cash Flow above prior year
Adjusted Free Cash Flow above prior year due to lower NWC outflow H1 2019/20: Free Cash Flow (in €m) H1 Highlights 611 Adj. Free Cash Flow improved by 86 €m -60 -46 286 -105 Change in NWC improved due to higher -115 7 increase in trade liabilities, driven by higher -279 starting point as of 30 S
Slide 18: Outlook
03 Outlook Date: 14 May 2020 // 18
Slide 19: Original FY 19/20 outlook withdrawn due to COVID-19
In view of the developments in connection with COVID-19, the original outlook for FY 19/20 was withdrawn Solid performance in 5M 19/20, fully on track to reach original FY guidance March performance essentially impacted by Corona-induced store closings “Knowns” Sales and margin in April impact
Slide 20: New outlook for FY 19/20
New outlook for FY 19/20 Coronavirus impact on the Company's business for the full year cannot be predicted with sufficient reliability at this time Adjusted for portfolio changes Excluding non-recurring earnings effects in connection with the reorganization and efficiency program announced on
Slide 21: Operations Update
04 Operations Update Date: 14 May 2020 // 21
Slide 22: Early reaction and bold immediate measures to protect people and business
We have managed to react to the crisis early and have taken bold immediate measures to protect our people and business Starting point Bold immediate measures We have managed to react to Comprehensive measures to ensure health and safety the crisis early of our employees and customers (in stores an
Slide 23: Structural improvements to business model during COVID-19
We have implemented structural improvements to our business model during COVID-19 that will continue to bring benefits long-term Structural improvements to cope with immediate challenges from COVID-19 and to accelerate change Costs Supply chain Marketing IT Flexibilization of our fixed costs Adaptio
Slide 24: Omni-channel model kept sales momentum during the crisis
We have successfully leveraged our omni-channel business model to keep sales momentum during the crisis Online Stores Strong increase in pure online sales in March (+98% 87% of stores were closed at the end of March yoy) further accelerating in April (approx. +300% yoy) Increasing re-openings
Slide 25: Transforming the business model for the post-COVID-19 era
We are now working to sustainably transform our business model for the post-COVID-19 era Further strengthen online (roll-out new webshop/app, increase online attachments) Strengthen omni-channel Play-out omni-channel advantages (e.g. delivery from store, smartbar services) proposition Improve
Slide 26: Challenges and opportunities as European CE market leader
Looking ahead, we see challenges but also strong opportunities for us as the market leader for CE products in Europe COVID-19 Crisis Challenges Opportunities Store sales are expected to catch Opportunity to grab market share in up only gradually times of accelerating market consolidation Risk
Slide 27: Key take-aways
Key take-aways 1 2 3 4 Coronavirus caused The year remains At the same time, we At the moment, we temporary standstill exceptional and see the current are focused on a of majority of our challenging as the COVID-19 crisis as an careful reopening and stationary business extent and duration of opportu
Slide 28: Q&A
Q&A Dr Bernhard Düttmann Karin Sonnenmoser Ferran Reverter Chief Executive Officer Chief Financial Officer Chief Executive Officer CECONOMY AG CECONOMY AG Media-Saturn-Holding GmbH Results Presentation Q2/H1 2019/20 Public Date: 14 May 2020 // 28
Slide 29: Contact
CECONOMY AG Investor Relations CONTACT Kaistr. 3 40221 Düsseldorf Germany Tel.: +49 (211) 5408-7222 Email: IR@ceconomy.de https://www.ceconomy.de/en/investor-relations/ Date: 14 May 2020 // 29
Slide 30: Notes
Notes All numbers in the presentation incl. IFRS 16 (unless otherwise stated) The disposal of the Greek MediaMarkt business is treated as a portfolio effect Guidance-relevant EBIT is adjusted for portfolio effects and non-recurring earnings effects in connection with the reorganization and eff
Slide 31: IFRS 16 effects on EBITDA and EBIT
IFRS 16 effects on EBITDA and EBIT Adjusted EBITDA1,2 Adjusted EBITDA1,2 IFRS 16 effect including IFRS 16 €m Q2 18/19 Q2 19/20 Q2 19/20 DACH 77 58 81 Western/Southern Europe 20 29 44 Eastern Europe 0 –3 12 Others3 –16 –13 5 Total 81 71 143 Adjusted EBIT1,2 Adjusted EBIT1,2 IFRS 16 effect including I
Slide 32: Store network as of 31 March 2020
Store network as of 31 March 2020 31/12/2019 Openings Closures 31/03/2020 Highlights Germany 429 – –1 428 Austria 52 – – 52 Selective expansion stopped in light of COVID- Switzerland 26 – – 26 19 outbreak Hungary 32 – – 32 DACH 539 – –1 538 4 store closures, thereof 2 stores in Poland and Belgiu
Slide 33: Net Working Capital
Net Working Capital1 €m 30/09/2018 31/03/2019 Change 30/09/2019 31/03/2020 Change Inventories 2,480 2,909 429 2,548 3,161 613 Trade receivables and similar claims 610 528 –82 455 460 4 Receivables due from suppliers 1,241 1,240 –1 1,295 1,277 –18 Trade liabilities and similar liabilities –5,745 –5,8
Slide 34: New syndicated loan of 1,700 €m complements existing credit lines
New syndicated loan of 1,700 €m complements our existing credit lines Financing structure New syndicated loan complements existing committed credit facilities of 980 €m 2,680 €m Tranche B 1,700 €m Existing bilateral loans and syndicated loan will be rolled into Tranche A and C o/w 1,360 €m KfW 340 €
Slide 35: Sufficient liquidity to cover net liabilities in worst case
We have sufficient liquidity to cover all outstanding net liabilities even in a theoretical worst case scenario (in €m) Net cash +1,399 Gross cash 1 New syndicated loan Trade receivables 1,2 Trade liabilities 1,3 +2,424 +1,700 +1,737 -5,835 Available liquidity Net liabilities 1 +4,124 -4,098 New syn
Slide 36: Financial calendar and events
Financial calendar and events Financial calendar Q3/9M 2019/20 results 13 August 2020 Q4/FY 2019/20 trading statement 23 October 2020 FY 2019/20 results 15 December 2020 Upcoming events Virtual Roadshow Paris Frankfurt 18 May 2020 Virtual Roadshow DACH/UK/US Frankfurt 19 May 2020 Virtual Roadshow Fr
Slide 37: Date: 14 May 2020
Date: 14 May 2020 // 37