Ceconomy Ag · XETR:CEC
Ceconomy — Non-Deal Roadshow (July 2017)
37 slides from Ceconomy's roadshow presentation, July 2017
Slide 1: Road(show) to Independence
CECONOMY “Road(show) to Independence” June/July 2017 June/July 2017 (revised) // 1
Slide 2: Disclaimer and Notes
DISCLAIMER three-month periods ended March 31, 2017 and December 31, 2016. The combined financial statements of CECONOMY have not been To the extent that statements in this presentation do not relate to historical or current facts they constitute forward-looking AND NOTES audited and may also deviat
Slide 3: Disclaimer and Notes (cont'd)
Disclaimer and Notes (cont’d) This presentation contains forecasts, statistics, data and other solely relied on as market studies are often based on information decisions taken by us, you or any third parties that receive this information relating to markets, market sizes, market shares, and assumpt
Slide 4: Creating a focused Consumer Electronics platform
Creating a focused “Consumer Electronics platform” ALL FREE CASH FLOW INVESTED IN INDEPENDENCE CECONOMY 100% MANAGEMENT FOCUS ON FOCUS CREATING VALUE FOR CECONOMY FULL VISIBILITY AND SIMPLICITY TRANSPARENCY "Road(show) to Independence" Public June/July 2017 (revised) // 4
Slide 5: Demerger of METRO GROUP to be completed mid-July
Demerger of METRO GROUP to be completed mid-July Submission of clearance decision to the commercial Registration of the demerger Change of formal name to register in the commercial register CECONOMY AG 22 June asap after 22 June 29 June – mid July mid July mid July mid August* Higher Regional Court
Slide 6: Update on the corporate governance situation of MediaMarktSaturn
UPDATE ON THE STATUS UPDATE “MMS MINORITY SHAREHOLDER KELLERHALS” CORPORATE GOVERNANCE SITUATION OF // CECONOMY has full strategic freedom. Mr. Kellerhals is an ordinary MEDIAMARKTSATURN shareholder with only a negligible number of shares in CECONOMY RETAIL GROUP // CECONOMY controls MediaMarktSatur
Slide 7: Ceconomy point of departure
CECONOMY point of departure // Largest Consumer Electronics player in Europe €22bn €719m // €22bn of sales and >€700m of EBITDA // €2bn online sales and >€1.3bn of sales in services and solutions // 2 strong brands: MediaMarkt and Saturn Sales EBITDA // Leading market position in 9 European countrie
Slide 8: Ceconomy is ready for independence
CECONOMY is ready for independence and well progressing in the different change phases in the Consumer Electronics space Rationalisation Active management of country, brand and store portfolio, competitive cost base Digitalisation Digitalisation has changed customer behaviour, impacted retail proces
Slide 9: Ceconomy is a Consumer Electronics platform
CECONOMY is a Consumer Electronics platform CECONOMY acts as a platform that brings together various businesses, concepts, formats and brands active in the area of Consumer Electronics All these activities are based on a customer community monetisation business model Our goal is to increase the rele
Slide 10: Ceconomy's overall mid-term ambitions
CECONOMY’s overall mid-term ambitions CORE METRICS 2015/16 MID-TERM AMBITIONS Sales1 €22bn > 3% CAGR direction EBITDA Margin2 3.3% 5% direction Tax Rate2 49% 40% Investments3 6 1.5% of sales 1.5% of sales (2.0% of sales incl. DSL) FCF Conversion4 44% 60 – 70% Dividend N.M. 45 – 55% % of EPS5 1 At co
Slide 11: Key value drivers and enablers
Key value drivers and enablers #1 #2 #3 #4 #5 Category Value Online, Services & Customer driver Selective Management, Mobile, Solutions Data / CRM Pricing, expansion Store Supply Chain UPDATE UPDATE UPDATE UPDATE UPDATE Redefine central vs. decentral Enabler #6 #7 #8 Net #9 People #10 Digital & Port
Slide 12: Why invest in Ceconomy?
Why invest in CECONOMY? #1 #2 #3 #4 CECONOMY LEADS CECONOMY IS THE CECONOMY HAS A CECONOMY HAS THE LEADER IN STRONG THE POTENTIAL TO CONSOLIDATION MULTI-CHANNEL FINANCIAL INCREASE AND AND SCALE PROFILE MARGINS AND TRANSFORMATION FREE CASH FLOW IN A DYNAMIC GENERATION RETAIL CATEGORY "Road(show) to I
Slide 13: Ceconomy Point of Departure
// CECONOMY Point of Departure June/July 2017 (revised) // 13
Slide 14: Largest Consumer Electronics Player in Europe with #1 positions in 9 countries
The largest Consumer Electronics Player in Europe FACT BOX with #1 positions in 9 countries Market shares 13.2% 13.4% 12.6% Sweden Russia The Netherlands 13/14 14/15 15/16 27 61 DIVERSIFIED EXPOSURE Belgium WITH 1,023 STORES & WEBSHOPS ACROSS 15 49 Germany Poland COUNTRIES IN EUROPE 23 424 83 2 28 4
Slide 15: One of the leading multi-channel players in Europe
One of the leading multi-channel players in Europe Online Generated Sales (in € million & total sales share) CECONOMY’s multi-channel offering 10.2% // Total online sales of more than EUR 2.2 billion LTM 8.9% 8.1% 2,239 1,952 // Around 300,000 SKUs online 5.9% 1,766 1,446 // Best-in-class integratio
Slide 16: Multi-channel offering is a clear USP
Multi-channel offering is a clear USP for CECONOMY – Customers act “multi-channel” & channels benefit each other More than 50% of online purchases started in one of our stores Full multi-channel customer journey leads to 30% of all store a conversion rate >20% visitors have initially visited our web
Slide 17: Multi-channel is the winning model
Multi-channel is the winning model Where do German consumers buy CE products? Sales share in Germany (in %) 5% 6% 7% 8% 10% 11% 16% 17% 17% 17% 17% 17% Multi-channel offering with increasing relevance for consumers 78% 77% 76% 74% 73% 72% 2011 2012 2013 2014 2015 2016 Online business of brick&mortar
Slide 18: The store network is an asset again
The store network is an asset again and integral part FACT BOX of CECONOMY’s multi-channel and services strategy Store visitors (FY 15/16) Advantages of CECONOMY’s strong physical presence 2.6m per day Offering customers tangible product experiences Showroom for exclusive and high-end products offer
Slide 19: Full CE assortment reflecting a connected world
CECONOMY offers the full CE assortment, reflecting a truly “connected world” Other2 Product Category Entertainment Computer Hardware1 Breakdown FY 15/16 6% & Accessories 10% 23% Telecommunications 17% Brown Goods 22% White Goods 22% 1 Telecommunication devices such as iPads without SIM card included
Slide 20: Highly relevant to suppliers and strategic partner of choice
CECONOMY is highly relevant to its suppliers and a strategic partner of choice Sales Share in % (CECONOMY)1 CECONOMY Supplier CECONOMY’s Weight at Vendor / Supplier1 20% Supplier 1 18% 11% Supplier 2 14% Read: CECONOMY 5% Supplier 3 27% generates 20 % of its sales with supplier1 products 4% Supplier
Slide 21: Full range of services & solutions along the customer journey
CECONOMY focuses on a full range of services & FACT BOX Services & Solutions Sales solutions along the customer journey (in €m, FY 2015/16) +44% 1.3 0.9 1.0 (PRE-)BUY SET-UP & USE REPAIR 13/14 14/15 15/16 // Consumer credit // Personalised // Refurbishment and leasing products // In-warranty repairs
Slide 22: Large base of >13 million loyal members
CECONOMY has an already large and valued base of >13 million loyal members* in 8 countries >13m loyalty club/card members across all Ø 42% of all purchases are done by loyalty countries members across those 8 countries** 2.6m MediaMarkt Club members in Germany 2.2m transactions per months are done b
Slide 23: Ceconomy Targets, Value Drivers & Enablers
// CECONOMY Targets, Value Drivers & Enablers June/July 2017 (revised) // 23
Slide 24: Key value drivers and enablers
Key value drivers and enablers #1 #2 #3 #4 #5 Category Value Online, Services & Customer driver Selective Management, Mobile, Solutions Data / CRM Pricing, Supply expansion Store Chain UPDATE UPDATE UPDATE UPDATE UPDATE Redefine central vs. decentral Enabler #6 #7 #8 Net #9 People #10 Digital & Port
Slide 25: Key initiatives to further grow online/mobile/store
Key initiatives to further grow online/mobile/store // Expansion of online CE assortment from currently c. 300k SKUs to 1m SKUs Assortment // Dropshipment initiatives to increase assortment without capital locked Online Sales1 (% of total sales) // Optimising every single customer contact and drive
Slide 26: Increased services penetration will drive sales and margin targets
Increased services penetration will also drive CECONOMY’s sales and margin targets // Full roll-out of in-store service and repair “smart bars” (> 510 already in place) In-store services // Additional services to be added: e.g. trade in, personalisation of products Services & Solutions Sales (% of t
Slide 27: Case study: MediaMarkt Club Germany loyalty data
Case study: MediaMarkt CECONOMY gathers relevant data from its loyalty members Club Germany driving additional sales and efficiencies Household panel: share of wallet1 MediaMarkt Leveraging CRM potentials Other Loyalty effect: 19% +29%p // MediaMarkt Club and Saturn Card loyalty programs 48% impleme
Slide 28: Selective store expansion contributing to sales growth target
CECONOMY also continues selective store expansion contributing to the overall sales growth target Number of stores Formats and measures 1,034 1,023 1,007 // Roll-out especially of smaller store formats such as proximity 986 and shop-in-shop concepts // Focus on smaller formats leads to reduced store
Slide 29: Significant potential to increase margins in question-mark countries
Significant potential to increase margins by either improving or exiting “question-mark” countries Core Peers (Listed) CECONOMY EBITDA Margin1,2 (LTM) EBITDA Margin2 (FY 2015/16) 6.2% 5.4% 5.7% direction 5% +5%p 4.3% 3.3% 3.9% Fnac Darty Best Buy Dixons Carphone -1.6% Lowest 5 Group Best 5 Mid-term
Slide 30: Restructuring of redcoon, Russia and Sweden
Restructuring of redcoon almost completed; full-fledge restructuring plan to reach break-even in Russia and Sweden initiated redcoon Russia Sweden Closure of operations in Centralisation of pricing, Strong push on online and Austria, Spain, Portugal and procurement and category services & solutions
Slide 31: Turnaround of MediaMarkt Turkey well on track
Turnaround of MediaMarkt Turkey well on track Operational improvements Store restructuring & focused expansion Restructuring of 34 stores completed, resulting in 9 End-to-end centralised pricing closings and 25 downsizings Completely centralised procurement and category Dedicated expansion strategy
Slide 32: New category management initiatives
New category management initiatives aim offering the right range and assortment at the right price Optimisation opportunities in the area of assortment building // Aligning brand and price structure to market situation and customer demands // Providing the right level of entry price products // Ensu
Slide 33: Case study: Germany dropshipment and supply chain
Case study: Germany Centralisation of supply chain processes from predominantly direct store delivery to a more central and regional structure Product flows and logistics locations: Today Product flows and logistics locations: Target picture INDUSTRY INDUSTRY Central Regional warehouse warehouses Pa
Slide 34: Case study: End-to-end supply chain set-up
Case study: Germany End-to-end supply chain set-up including centralisation of procurement and systems infrastructure offers great value potential Optimisation levers Roadmap to achieve target picture // Solution based on 3 interlinked pillars (procurement, 1 Product availability 1 logistics infrast
Slide 35: Strategic pillars dependent on technology and systems
Strategic pillars of growth and profitability are heavily dependent on technology and/or information (systems) Continuous investment required to sustain value Technological requirements creation and additional efficiency games // Scalable order management solution for full speed online // Investment
Slide 36: Overall mid-term ambitions
Overall mid-term ambitions CORE METRICS 2015/16 MID-TERM COMMENTARY AMBITIONS Moderate market growth expected Sales1 €22bn > 3% CAGR Further increase in market shares in core markets Online, multi-channel, CRM and services as main drivers Growing sales to support EBITDA margin development EBITDA 3.3
Slide 37: Date: 13/07/2017
Date: 13/07/2017 // 37