Ceconomy Ag · XETR:CEC
Ceconomy — Debt Investor Presentation (March 2024)
48 slides from Ceconomy's debt investor presentation, March 2024
Slide 1: Debt Investor Roadshow: Credit highlights of CECONOMY
Debt Investor Roadshow Credit highlights of CECONOMY March 2024
Slide 2: Credit highlights summary: Transformation gains traction
March 2024 | Debt Investor Roadshow 2 Credit highlights summary: Transformation gains traction / Reinvented long term business model („from retail to service platform“) with tangible progress in reducing exposure to traditional retail business / Strong diversification across business models, regions
Slide 3: Agenda
I. CECONOMY at a glance II. Credit highlights III. Financials IV. Summary Agenda
Slide 4: MediaMarktSaturn is market leader in consumer electronics in Europe
March 2024 | Debt Investor Roadshow 4 MediaMarktSaturn is market leader in consumer electronics in Europe Sales: ~2 bn >35 m +53 €22 bn … and Customer Loyalty Net Promotor Brand contacts members Score growing awareness >75% #1 / #2 market position in 9 of 11 Strategic markets investment in FNAC ~41
Slide 5: We are well-diversified in terms of both regional and product sales
March 2024 | Debt Investor Roadshow 5 We are well-diversified in terms of both regional and product sales Sales share by region FY 22/23 Product sales per category FY 22/23 DACH IT, phones, White goods 54% wearables 45% 26% 32% West/South 2% Photo 2% 17% 12% 8% Others TV, HiFi East Software & games
Slide 6: We create Experience Electronics to enrich people's life
March 2024 | Debt Investor Roadshow 6 We create Experience Electronics to enrich people’s life – our omnichannel strategy shows visible progress FY 21/22 FY 22/23 Growth plan FY 25/26 Employee Shopping experience experience Net Slightly above €21.8 bn €22.2 bn sales market growth “Front-line first “
Slide 7: We transform and enhance our business model to strengthen financial performance
March 2024 | Debt Investor Roadshow 7 We transform and enhance our business model to strengthen financial performance Ambition until FY 25/26 Retail Core: Moderate sales growth & c. 30% online share c. 5.5% Services & €750 m c. 5% Up to20 c. €45 m Solutions Marketplace Private Label Retail Media GMV
Slide 8: Agenda
I. CECONOMY at a glance II. Credit highlights III. Financials IV. Summary Agenda
Slide 9: Credit Highlights
March 2024 | Debt Investor Roadshow 9 Credit Highlights 1 Strategy 2 Platform Experience Electronics is We are growing our core to our strategy attractive business models 3 Sustainability 4 Ambition Sustainability is part of our We are clear in our financial DNA ambitions 5 Traction 6 Commitment Our
Slide 10: We operate in a constantly growing industry
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 10 We operate in a constantly growing industry Growth opportunities Sustainability Sustainable and energy-efficient products +50% CAGR in energy-efficient category segments1 AI-powered consu
Slide 11: And guide customers through an increasingly complex world
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 11 And guide customers through an increasingly complex world Convenient and Sustainable Strong and reliable Customer-centric Lifecycle seamless shopping products and partner to assortment se
Slide 12: Our four strategic pillars provide direction
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 12 Our four strategic pillars provide direction “Front-line first Employee delivering great Engaging employees and customers experience customer experience” Shopping “Mobile-first Omnichanne
Slide 13: Moving from traditional retail to a service platform
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 13 Moving from traditional retail to a service platform with attractive and growing business models c. 2.0 bn annual customer contacts > > ”The Next Stores Online App ”Omnichannel Touchpoint
Slide 14: Today's big variety of Services & Solutions portfolio
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 14 Today’s big variety of Services & Solutions portfolio c. 5.5%1 Services & Solutions income Insurance and warranties (partner based) Telecom and digital products Advice, installation and r
Slide 15: Marketplace is the key driver to enrich our assortment
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 15 Marketplace is the key driver to enrich our assortment €7501 m Breadth of assortment Marketplace GMV Yesterday / Marketplace offers max. choice & availability, Online assortment Reduction
Slide 16: Our margin accretive private labels are an important part of our assortment
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 16 Our margin accretive private labels are an important part of our assortment c. 5%1 Private Label Three key consumer demands… …addressed by our four very strong private labels share Consum
Slide 17: We provide an attractive Retail Media platform for our partners
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 17 We provide an attractive Retail Media platform for our partners c. € 451 m Retail Media income Sponsored Sponsored Consideration Product Ad Brand Ad & Action report A+ Content Increase sa
Slide 18: We are transforming our tech infrastructure and will operate fully cloud based
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 18 We are transforming our tech infrastructure and will operate fully cloud based in three years Our tech stack transformation The move from single channel and multichannel to omnichannel …
Slide 19: Next to tech, we are also transforming our supply chain
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 19 Next to tech, we are also transforming our supply chain From sales channel dependent fulfillment …To omnichannel integrated fulfillment / All manufacturers supply all shops and our online
Slide 20: Sustainability is a part of our DNA and we have set ambitious goals
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 20 In all that we do, sustainability is a part of our DNA and we have set ourselves ambitious goals Our growth levers Reducing carbon emission Scope 1&2 Scope 3 / Ongoing application for “Sc
Slide 21: We consider sustainability a growing business opportunity
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 21 We consider sustainability a growing business opportunity Energy efficient appliances Trade-in products (in thousands) Refurbished products (in thousands) Appliances with energy Used devi
Slide 22: Our strategic initiatives lead us to our key pledges for FY25/26
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 22 In summary, our strategic initiatives lead us to our key pledges for FY25/26 regularly communicated to Our key pledges for FY 25/26… …and further KPI targets capital markets Retail core R
Slide 23: Service businesses play biggest role in profitability increase
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 23 Service businesses play biggest role in profitability increase Simplified illustration Adjusted EBIT margin1 c. 2.5% c. 0.2%p. c. 0.9%p. c. 0.2%p. c. 0.2%p. 1.0% c. 0.2%p. FY 21/22 Retail
Slide 24: Our key focus areas show transformative progress
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 24 Our key focus areas show transformative progress Target Current trend Business fields KPI FY 2021/22 FY 2022/23 FY 2025/26 Q1 23/241 Retail Core Loyalty members 34 m 39 m 50 m Retail Core
Slide 25: Prudent financial policy underpinned by much improved leverage ratio
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 25 Prudent financial policy underpinned by much improved leverage ratio / Market acknowledgement / Dividend payout restriction Track record reflected in continuous reduction of Activation of
Slide 26: Diverse funding structure with sufficient liquidity reserves in place
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 26 Diverse funding structure with sufficient liquidity reserves in place / ESG-linked syndicated RCFs / Commercial paper programme Pure back-up line, never been drawn For short-term funding
Slide 27: Strong commitment to solid rating position and further improving credit metrics
1 Strategy 2 Platform 3 Sustainability 4 Ambition 5 Traction 6 Commitment March 2024 | Debt Investor Roadshow 27 Strong commitment to solid rating position and further improving credit metrics Fitch Ratings affirms as first agency their current rating asessment on November 24, 2023: BB- (outlook: st
Slide 28: Agenda
I. CECONOMY at a glance II. Credit highlights III. Financials IV. Summary Agenda
Slide 29: Our further growth plan: >€500 m EBIT and c. €200 m FCF in FY 25/26
March 2024 | Debt Investor Roadshow 29 Our further growth plan: >€500 m EBIT and c. €200 m FCF in FY 25/26 Key financial figures FY 21/22 FY 22/23 Growth plan FY 25/26 Adjusted EBIT1 €208 m €243 m >€500 m Delta growth plan vs. FY 21/22: Gross margin1 17.6% 17.9% c. 20% EBIT increase of c. 150% Adjus
Slide 30: Figures reflect successful execution of our strategy
EBIT/Sales OPEX FCF Cash/NWC Debt March 2024 | Debt Investor Roadshow 30 Figures reflect successful execution of our strategy Net sales (in €m) Adjusted EBIT2 (in €m) Slightly above market growth >€500 m 21,361 21,768 22,242 20,831 236 237 243 208 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 25/26 FY 19/2
Slide 31: We also recorded further increase in ROCE in FY 22/23
EBIT/Sales OPEX FCF Cash/NWC Debt March 2024 | Debt Investor Roadshow 31 We also recorded further increase in ROCE in FY 22/23 Return on capital employed (%) Industry average CECONOMY 12.0 / +150 bp ROCE improvement in FY 22/23 9.5 9.0 9.0 8.5 / Positive trend vs. sector average 7.0 7.0 7.0 FY 19/20
Slide 32: We are taking concrete actions to maintain our OPEX ratio
EBIT/Sales OPEX FCF Cash/NWC Debt March 2024 | Debt Investor Roadshow 32 We are taking concrete actions to maintain our OPEX ratio Run rate savings (in €m) vs. 2021/22 Restructuring costs (in €m) 130 -8 -4 -31 -27 -100 Q1 Q2 Q3 Q4 Q1 Run rate Q1 Q2 Q3 Q4 Q1 Cum from the 2022/23 2023/24 end of 2022/2
Slide 33: Steady growth to achieve our FCF targets
EBIT/Sales OPEX FCF Cash/NWC Debt March 2024 | Debt Investor Roadshow 33 Steady growth to achieve our FCF targets Free cash flow1 (in €m) – annual development Free cash flow1 (in €m) – focus Q1 +30.8% 1,831 1,473 1,272 Negative FCF due to 1,196 1,126 supply chain 453 disruption & full take Steady gr
Slide 34: Net working capital and liquidity significantly improved
EBIT/Sales OPEX FCF Cash/NWC Debt March 2024 | Debt Investor Roadshow 34 Net working capital and liquidity significantly improved, with industry-specific swings Net working capital (in €m, negative) Cash & cash equivalents (in €m) Delta vs FY21/22 Delta vs FY21/22 +259 +394 +277 +41 +293 +203 +128 +
Slide 35: CECONOMY has low and stable financial debt on a lease adjusted basis
EBIT/Sales OPEX FCF Cash/NWC Debt March 2024 | Debt Investor Roadshow 35 CECONOMY has low and stable financial debt on a lease adjusted basis Financial debt (in €m) Financial debt Lease adjusted financial debt 2,865 2,773 2,584 2,423 / Borrowings are dominated by lease liabilities / Lease contracts
Slide 36: Maturity profile with no major debt repayments by FY 25/26
EBIT/Sales OPEX FCF Cash/NWC Debt March 2024 | Debt Investor Roadshow 36 Maturity profile with no major debt repayments by FY 25/26 Financing structure (in €m) / Proactive management of maturity profile, starting with this roadshow 500 / Promissory notes maturing in 2024 will be repaid from cash on
Slide 37: Agenda
I. CECONOMY at a glance II. Credit highlights III. Financials IV. Summary Agenda
Slide 38: We are ready for the future
March 2024 | Debt Investor Roadshow 38 We are ready for the future / Experience-based omnichannel platform with multiple growth models “We Create / On track to double EBIT to over €500 m by fiscal year 2025/26 EXPERIENCE / On track to bolster free cash flow: steady growth towards c. €200 m p.a. ELEC
Slide 39: Disclaimer and Notes
March 2024 | Debt Investor Roadshow 39 DISCLAIMER AND NOTES This disclaimer shall apply in all respects to the entire presentation This presentation is intended for information only, does not constitute a and the permitted use of any market research data does not constitute (including all slides of
Slide 40: CECONOMY
O CECONOMY
Slide 41: Further documentation
March 2024 | Debt Investor Roadshow 41 Our Purpose “We Create Further documentation EXPERIENCE ELECTRONICS to Enrich People’s Life”
Slide 42: We trust our international management team to deliver our transformation
March 2024 | Debt Investor Roadshow 42 We trust our international management team to deliver our transformation Dr Karsten Dr Kai-Ulrich Wildberger Deissner Chief Executive Officer Chief Financial Officer Kathy Dr Sascha Guido Iris Keppeln Mager Monferrini Pruefer Chief Assurance Officer Chief Opera
Slide 43: Four store formats, all around experience zones, services, and the human touch
March 2024 | Debt Investor Roadshow 43 Four store formats, all around experience zones, services, and the human touch LIGHTHOUSE CORE Inspiration and Availability and Experience Advice >4,000sqm c. 1,200-3,500sqm XPRESS SMART Proximity and Omnichannel and Convenience City center location c. 400-1,10
Slide 44: CECONOMY's present capital structure composition
March 2024 | Debt Investor Roadshow 44 CECONOMY’s present capital structure composition Current capital structure as of December 2023 (in €m) Amount x EBITDA Coupon / Margin Maturity Cash and cash equivalents (2,352)1 ESG-linked RCF (€353 m) - May-253 ESG-linked RCF (€707 m) - May-264 Commercial pap
Slide 45: CECONOMY's shareholder structure
March 2024 | Debt Investor Roadshow 45 CECONOMY´s shareholder structure Shareholder structure based on voting rights Meridian Foundation freenet 11.1% 6.7% 4.8% Beisheim 4.2% Exor Haniel 16.7% 36.3% Free Float 27.3% Other Investors 29.2% Convergenta/ Kellerhals Familiy 1Voting rights notifications p
Slide 46: Net profit lifted by continued use of deferred tax asset
March 2024 | Debt Investor Roadshow 46 Net profit lifted by continued use of deferred tax asset Adjusted EBIT to EPS Q1 €m 2022/23 2023/24 Change €m Adjusted EBIT / Improvement driven by increase in gross Adjusted EBIT 230 248 +18 margin and cost control Non-recurring items -8 -29 -21 Non-recurring
Slide 47: Good growth in Services & Solutions and 1P online sales, strong growth in Marketplace
March 2024 | Debt Investor Roadshow 47 Good growth in Services & Solutions and 1P online sales, strong growth in Marketplace Q1 development / Good performance of S&S sales ↗ +3.0% / Strong performance from warranties and Retail Media Services & 381 392 / Decline in Power Services (installation) Solu
Slide 48: Strong gross margin and rigorous cost control drive adjusted EBIT improvement
March 2024 | Debt Investor Roadshow 48 Strong gross margin and rigorous cost control drive adjusted EBIT improvement Q1 development / Strong improvement in gross margin driven by a better product ↗ +50bp mix in favor of white goods Gross 17.6% / Product margin improved in all regions 17.1% margin1 2