Ceconomy Ag · XETR:CEC
Ceconomy — Investor Presentation (February 2019)
36 slides from Ceconomy's investor presentation, February 2019
Slide 1: Investor Presentation February 2019
Investor Presentation February 2019
Slide 2: Disclaimer and Notes
DISCLAIMER (segmental or other) information in the consolidated financial statements of the former METRO Group and, thus, may not be fully comparable to such financial statements. Historical our business, results of operations, financial position or cash flows. There are, however, material limitatio
Slide 3: Disclaimer and Notes (cont'd)
Disclaimer and Notes (cont’d) We do not undertake any obligation to publicly update any CECONOMY is based on certain estimates and assumptions and presentation, warrant that the data collected, processed and forward-looking statements or to conform them to events or there can be no assurance that th
Slide 4: CECONOMY at a glance
// CECONOMY at a glance February 2019 // 4
Slide 5: CECONOMY at a glance
CECONOMY at a glance Shareholder structure1 Product category breakdown Highlights Other3 Haniel White Free float Entertainment 5% Europe’s largest Consumer Electronics platform 22.7% 9% Goods 22% 47.2% €21.4bn of sales and €650m EBITDA in FY 17/18 21% 14.3% Meridian Telecom 6.6% 21% More than
Slide 6: Solid progress in the Online and Services & Solutions business
Solid progress in the Online and Services & Solutions business Strong Online business Stable pick-up rate Increasing Services & Solutions business % of total 10.6% 12.1% % of total 6.2% 6.9% 40% 42% sales sales 2,593 1,344 1,478 2,300 In % of Sales (€m) orders Sales (€m) 16/17 17/18 16/17 17/18 16/1
Slide 7: Personnel changes at CECONOMY successfully concluded – new CEO and CFO
Personnel changes at CECONOMY successfully concluded – new CEO and CFO start on 1 March 2019 CECONOMY AG shareholders 100 % CECONOMY AG Supervisory Board Joern Werner Karin Sonnenmoser Dr. Dieter Haag (CEO) (CFO) Molkenteller (CLCO) 78.38 % Advisory Board Other Operations Media-Saturn-Holding GmbH S
Slide 8: Why invest in CECONOMY?
Why invest in CECONOMY? #1 #2 #3 #4 CECONOMY IS THE CECONOMY HAS A CECONOMY HAS CECONOMY HAS LEADER IN STRONG THE POTENTIAL TO THE POTENTIAL TO MULTI-CHANNEL FINANCIAL PROFILE INCREASE LEAD THE RETAIL AND SCALE MARGINS AND CONSOLIDATION FREE CASH FLOW AND GENERATION TRANSFORMATION IN THE FUTURE Inve
Slide 9: Mid-term targets
Mid-term targets Sales1 EBITDA margin Tax rate >3% CAGR direction 5% direction 40% Investments2 FCF conversion3 Dividend pay-out ratio4 1.5% of sales 60-70% 45-55% 1 At constant currency before portfolio effects. CAGR = Compound Annual Growth Rate. 2 Cash investments. 3 Free Cash Flow conversion def
Slide 10: Q1 2018/19 Results
// Q1 2018/19 Results February 2019 // 10
Slide 11: Stabilization of earnings supported by better managed Black Friday
Stabilization of earnings supported by better managed Black Friday, but transformation ongoing Sound sales momentum with market Weaker earnings in October were still share gains impacting Q1 results Improved steering of Black Friday period Expenses related to top management resulting in higher Novem
Slide 12: Solid performance in Q1 across all major financial indicators
Solid performance in Q1 across all major financial indicators Change in NWC +2.8% +1,097 €m Positive sales –120 €m lower development than PY, but over all segments better than fx-adjusted vs. September expected 326 €m EBITDA* +18 €m above PY 269 €m EBIT* +15 €m above PY *EBIT/DA excl. Fnac Darty and
Slide 13: Black Friday with better results due to better planning and steering
Black Friday with better results due to better planning and steering Cross-selling bundles Highlights with services and Record sales day on Black Friday, particularly in accessories Germany Double-digit brick & mortar sales growth and substantial increase in online order volume Close Centrally
Slide 14: Successful Black Friday campaigns fully compensated lower December sales
Successful Black Friday campaigns fully compensated expected lower sales in December Total sales (in €m) fx-adjusted +2.8% Highlights +1.7% Overall market share gains 6,761 6,879 DACH: Positive development in Germany driven mainly by Black Friday; stabilization of sales in Switzerland Q1 17/18 Q
Slide 15: Online and Services & Solutions business with strong growth rates
Online and Services & Solutions business with strong growth rates Online Sales (in €m) Highlights In % of sales 11.6% 14.6% Online sales increased with accelerated growth +28.0% rate supported by Black Friday sales 1,007 787 Online LTM accounted for 13.1% of total sales vs. 11.1% in the prior-ye
Slide 16: Earnings excl. expenses for management changes supported by operational improvements
Earnings excl. expenses for management changes supported by operational improvements and positive one-off items Gross margin EBIT* excl. Fnac Darty (in €m) Highlights -0.6%p. +15 DACH: Better managed Black Friday and cost 19.0% 18.4% 254 269 reductions overcompensated weaker earnings in October
Slide 17: Operational gains, but higher expenses for top management changes
Operational gains, but higher expenses for top management changes EBIT excl. Fnac Darty (in €m) 269 254 15 -34 + Black Friday period 235 + Cost reductions + Higher recognized − Changes in the 1st income for mobile and 2nd management contracts (IFRS 15) level at CECONOMY + Settlement of & MediaMarktS
Slide 18: EPS almost on par with prior year despite lower EBIT/DA
EPS almost on par with prior year despite lower EBIT/DA and higher share count €m Q1 2017/18 Q1 2018/19 Change Highlights EBITDA 308 291 –17 Reported earnings impacted by expenses for restructuring and management changes EBIT 253 234 –19 Net financial result 2 1 –1 High tax rate in prior year ma
Slide 19: Free Cash Flow broadly in line with prior year's level
Free Cash Flow broadly in line with prior year’s level Q1 2018/19: Free Cash Flow (in €m) Highlights 1,097 49 1,433 1,381 Lower change in NWC mainly driven by lower -4 -52 rise in trade payables due to active cash management, but high positive impact from stock reduction 291 EBITDA Δ NWC Tax Other
Slide 20: CECONOMY manoeuvres through a transition year in FY 18/19
CECONOMY manoeuvres through a transition year in FY 18/19 Underlying Solid Q1 supports achievement of full-year targets assumptions Headwinds from positive non-recurring effects in previous full year for 18/19 still valid Positive impacts from strategic initiatives to become visible only gradu
Slide 21: Outlook for FY 18/19 confirmed
Outlook for FY 18/19 confirmed Adjusted for exchange rate effects and before portfolio changes Excludes expenses in connection with the restructuring and optimization of structures and business processes Excludes expenses for already announced management changes in top management €m FY 17/18 F
Slide 22: Strategy and Operations
// Strategy and Operations February 2019 // 22
Slide 23: Full focus on the implementation and acceleration of our strategic initiatives
Full focus on the implementation and acceleration of our strategic initiatives DIGITAL SERVICES & CATEGORY & ORGANIZATION & GROWTH SOLUTIONS SUPPLY CHAIN MANAGEMENT COST STRUCTURE Improve conversion through Use country best practices to Deploy new, group-wide Build new management optimized u
Slide 24: This transformation will require initial investments involving restructuring expenses
This transformation will require initial investments involving restructuring expenses Requires investments in terms of both money and time Continue to invest in the future which is about customer experience Improve IT and logistics systems Align all other costs to the strategy: location, marketing a
Slide 25: Cost analysis of selected CECONOMY entities
Cost analysis of selected CECONOMY entities CECONOMY HQ Costs (in €m) MMSRG HQ Costs (in €m) MMS Germany Costs (in €m) SG&A to Sales Ratio (∆ Last fiscal year vs. prior year in %p.) -0.1 -0.2 -0.3 -0.4 16/17 17/18 13/14 14/15 15/16 16/17 17/18 13/14 14/15 15/16 16/17 17/18 CEC Peer 1 Peer 2 Peer 3 O
Slide 26: Reorganization and optimization program to establish lean and faster structures
We have initiated a reorganization and optimization program to establish lean and faster structures 2018 2019 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep … Kick-off project team Analysis of organization and cost structures Preparation of reorganization Latest on 21 May 2019 and efficiency plan with
Slide 27: FY 18/19 will be a year of transition
FY 18/19 will be a year of transition – the transformation already started 1 2 3 This company has a We have to fix the We will put the great potential that basics and lay the customer back at the has not been fully foundation for a center of everything utilized. sustainable future. we do. By doing s
Slide 28: Back Up
// Back Up February 2019 // 28
Slide 29: Net Working Capital
Net Working Capital €m 30/09/2017 31/12/2017 Change 30/09/2018 31/12/2018 Change Inventories 2,449 3,380 932 2,480 3,229 749 Trade receivables 497 560 63 613 572 –42 Receivables due from suppliers 1,197 1,765 568 1.239 1,789 550 Receivables from credit cards 66 106 40 71 71 0 Advance payments on inv
Slide 30: IFRS 9 and 15 accounting changes
IFRS 9 and 15 accounting changes The IFRS 9 accounting change will reduce the Financial Impact1 impairment requirement for the receivables portfolio According to an impact analysis no material Not material IFRS 9 impact expected Financial Instruments Effective: 1 Oct. 2018 IFRS 15 related chan
Slide 31: CECONOMY's new shareholder structure
CECONOMY’s new shareholder structure Pre-transaction structure based on voting rights* Beisheim reported 23,615,334 Haniel voting rights to METRO Number of % of Date of Wholesale & Food Specialist AG Shareholder voting rights voting rights publication 24.9% (now METRO AG) on 12 July 2017 Haniel 81,0
Slide 32: Fnac Darty consolidation
Fnac Darty consolidation FNAC H1 2019 FNAC H2 2019 FNAC H1 2020 CEC Q2 18/19 CEC Q3 18/19 CEC Q4 18/19 CEC Q1 19/20 CEC Q2 19/20 CEC Q3 19/20 31.12. 31.03. 30.06. 30.09. 31.12. 31.03. 30.06. 2018 2019 2019 2019 2019 2020 2020 Our c.24% stake in Fnac Darty is accounted for as “Investment accounted
Slide 33: Store network
Store network 30/09/2018 Openings Closures 31/12/2018 Highlights Germany 432 1 0 433 Austria 52 0 0 52 Selective expansion with 8 openings: Switzerland 27 0 0 27 2 in Spain and 1 each in Germany, Italy, Poland Hungary 24 0 0 24 and Turkey + 2 shop-in-shops pilots with DACH 535 1 0 536 Carrefour in
Slide 34: Sales & number of stores by country
Sales & number of stores by country Sales (€m) Number of Stores FY 16/17 FY 17/18 FY 16/17 Openings Closures FY 17/18 Germany 10,556 10,340 429 5 –2 432 Austria 1,169 1,161 50 2 0 52 Switzerland 635 569 27 1 –1 27 Hungary 302 340 24 0 0 24 DACH 12,662 12,410 530 8 –3 535 Belgium 686 701 28 1 0 29 Gr
Slide 35: Financial calendar
Financial calendar Annual General Meeting 13 February 2019 Q2 2018/19 results 21 May 2019 Q3 2018/19 results 13 August 2019 Q4/FY 2018/19 trading statement 24 October 2019 FY 2018/19 results 17 December 2019 Investor Presentation Public February 2019 // 35
Slide 36: Investor Presentation Public February 2019
Investor Presentation Public February 2019 // 36