Ceconomy Ag · XETR:CEC
Ceconomy — FY2022/23 Earnings Presentation
49 slides from Ceconomy's earnings presentation, Dec 18, 2023
Slide 1: Results Presentation Q4/FY 2022/23
Results Presentation Q4/FY 2022/23 18 December 2023
Slide 2: Disclaimer
Results Presentation Q4/FY 2022/23 on 18 December 2023 2 Disclaimer / Please note that the figures for our operations in Sweden (with the transaction concluding on 1 August) and Portugal (concluding on 30 September) are still included in our reported figures. However, they are not included in the ke
Slide 3: Agenda
I. Business update II. Financial performance III. Outlook and summary Agenda
Slide 4: 12 months ago, the market was full of uncertainty
Results Presentation Q4/FY 2022/23 on 18 December 2023 4 12 months ago, the market was full of uncertainty Geopolitical tension Increasing energy Economic slowdown Low consumer and war in Ukraine prices and rising inflation confidence
Slide 5: But we made exceptional operational progress
Results Presentation Q4/FY 2022/23 on 18 December 2023 5 But we made exceptional operational progress We improved our We grew new We transformed our We remained strongly core business businesses business further employee & customer focused / Leaner and more / Good growth in Services / Tech journey a
Slide 6: In a fragmented market, we stand out of the crowd
Results Presentation Q4/FY 2022/23 on 18 December 2023 6 In a fragmented market, we stand out of the crowd Strong brand awareness >70% unaided awareness Strengthened industry relationship Strong momentum of Marketplace and Retail Media products Sustainability at our core Trade-in offers well receive
Slide 7: The execution of our strategy is paying off
Results Presentation Q4/FY 2022/23 on 18 December 2023 7 The execution of our strategy is paying off / Stable market share (+0.1%1) in a declining consumer Key financial figures electronics market (-3.0%1) / 4.7%2 sales growth driven by strong like-for-like FY 2021/22 FY 2022/23 Change growth Net sa
Slide 8: Our strategy is based on four strategic pillars
Results Presentation Q4/FY 2022/23 on 18 December 2023 8 Our strategy is based on four strategic pillars “Front-line first Employee delivering great Engaging employees and customers experience customer experience” Shopping “Mobile-first Omnichannel Excellence growing online “We Create experience omn
Slide 9: We are moving away from CE retail to a retail Service Platform
Results Presentation Q4/FY 2022/23 on 18 December 2023 9 We are moving away from CE retail to a retail Service Platform with multiple business models >2.2 bn annual customer contacts > > ”The Next Stores Online App ”Omnichannel Touchpoints“ Direct Contact Social Big Thing“ … Center Media Retail Core
Slide 10: We have made good progress on our key pledges in FY 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 10 We have made good progress on our key pledges in FY 2022/23 Business fields KPI FY 2021/22 Progress FY 2022/23 FY 2025/26 Retail Core Loyalty members 34 m 39 m 50 m Retail Core Online share1 25% 23% c. 30% Retail Core Modernization rate 30% 5
Slide 11: Our retail core is getting stronger
Results Presentation Q4/FY 2022/23 on 18 December 2023 11 Our retail core is getting stronger KPI FY 2021/22 FY 2022/23 FY 2025/26 Loyalty members / Better customer engagement thanks to new benefit system Loyalty members 34 m 39 m 50 m Online Online share1 25% 23% c. 30% / Strong pick-up rate of 38%
Slide 12: Operational Services & Solutions and Marketplace drive further growth
Results Presentation Q4/FY 2022/23 on 18 December 2023 12 Operational Services & Solutions and Marketplace drive further growth Business fields KPI FY 2021/22 FY 2022/23 FY 2025/26 Stable Operational Services & Solutions income share / 3.9% income increase in Operational Services & Solutions Operati
Slide 13: We refined our strategy on Private-Label. Our Retail Media approach is working well.
Results Presentation Q4/FY 2022/23 on 18 December 2023 13 We refined our strategy on Private-Label. Our Retail Media approach is working well. Business fields KPI FY 2021/22 FY 2022/23 FY 2025/26 Increase in Private Label share / New logistics process enabling faster import Private Private Label Lab
Slide 14: Our key operational focus areas for FY 2023/24
Results Presentation Q4/FY 2022/23 on 18 December 2023 14 Our key operational focus areas for FY 2023/24 Online Services & Solutions Private Label Experience journey / Optimized product range / Successful launch of / New management in / Roll-out of our and enhanced availability myMediaMarkt+ in plac
Slide 15: We care about our people
Results Presentation Q4/FY 2022/23 on 18 December 2023 15 We care about our people / >70% of our sales floor employees have been trained / Empowering more women from talent pool to top- level management: >50% female share in promotions over last 12 months / Stabilization of Net Promoter People score
Slide 16: We care about the planet
Results Presentation Q4/FY 2022/23 on 18 December 2023 16 We care about the planet / -37% emissions reduction in Scope 1 and Scope 2 compared to FY 2021/22 / 92% electricity procurement from alternative energy sources in 2022/23 / 9% increase in sales share of BetterWay products to 12% in 2022/23 wi
Slide 17: Agenda
I. Business update II. Financial performance III. Outlook and summary Agenda
Slide 18: We delivered our guidance 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 18 We delivered our guidance 2022/23 Sales Adj. EBIT2 Adj. EPS Free cash flow €22.2 bn €243 m €0.08 €257 m +4.7%1 +€35 m -€0.05 +€880 m 1Adjusted for FX and portfolio effects, pre-IAS 29. 2Excluding associates, adjusted for portfolio changes, pr
Slide 19: We delivered solid sales growth and strong EBIT growth in 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 19 We delivered solid sales growth and strong EBIT growth in 2022/23 Q4 FY / Slowdown in Q4 due to a soft back-to- Reported +2.4%1 ↗ +4.7%1 school period ↗ sales (€m) / Overall good sales performance in FY (+4.7%1 vs. PY) and stable market share
Slide 20: Increase in Services & Solutions for the FY, soft online
Results Presentation Q4/FY 2022/23 on 18 December 2023 20 Increase in Services & Solutions for the FY, soft online: action plans set for 2023/24 Q4 FY / Stable development in Q4 excluding the Services & → -0.2% ↗ +3.2% reclassification of Retail Media in Q4 Solutions 2021/22 Sales1 (€m) / Services &
Slide 21: Strong gross margin and rigorous cost control drive our adj. EBIT in Q4
Results Presentation Q4/FY 2022/23 on 18 December 2023 21 Strong gross margin and rigorous cost control drive our adj. EBIT in Q4 Q4 FY / Gross margin improved in Q4 22/23. ↗ +70bp ↗ +10bp Enhanced product margin despite ongoing competitive pressures Gross margin1 (%) / Stable gross margin in FY 22/
Slide 22: Increase in gross margin thanks to better product mix in Q4 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 22 Increase in gross margin thanks to better product mix in Q4 2022/23 Q4 2022/23 / +70bp gross margin increased in Q4 / Increase in product margin as inflation is Gross passed through to customers margin1 19.9% / Better product mix in Q4 driven
Slide 23: Our efficiency programs are fully on track
Results Presentation Q4/FY 2022/23 on 18 December 2023 23 Our efficiency programs are fully on track Restructuring costs Measures Expected savings ~€100 m 85% of cost reduction program ~€130 m until FY 2023/24 underway run rate from the end of FY 2023/24 25% completed / €27 m restructuring costs / C
Slide 24: FY 2022/23 performance driven by DACH and Eastern Europe
Results Presentation Q4/FY 2022/23 on 18 December 2023 24 FY 2022/23 performance driven by DACH and Eastern Europe Segments FY 2022/23 DACH Western/ / Sales growth in Austria with market share Eastern €m DACH Southern Others4 CECONOMY gains, stable in Germany and Hungary, down in Europe Europe Switz
Slide 25: DACH and Eastern Europe remained the main drivers in Q4 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 25 DACH and Eastern Europe remained the main drivers of our performance in Q4 2022/23 Segments Q4 2022/23 DACH Western/ Eastern / Sales roughly stable in Austria, down in the €m DACH Southern Others4 CECONOMY Europe other countries Europe / EBIT
Slide 26: 2022/23 reported EBIT influenced by portfolio cleaning and Fnac valuation
Results Presentation Q4/FY 2022/23 on 18 December 2023 26 2022/23 reported EBIT influenced by cleaning our portfolio and current Fnac valuation Efficiency measures and other one-offs Adj. EBIT to adj. net profit bridge in FY 2022/23 (YoY change, €m) / Mainly Project “Drive” and IAS 29 Portfolio meas
Slide 27: From adjusted EBIT to net profit FY 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 27 From adjusted EBIT to net profit FY 2022/23 FY Efficiency measures and other one-offs €m 2021/22 2022/23 Change € m / Mainly Project “Drive” and IAS 29 EBIT adjusted 208 243 35 Portfolio measures Non-recurring items -103 -264 -162 / Deconsoli
Slide 28: Q4 2022/23 net profit decline impacted by non-recurring items
Results Presentation Q4/FY 2022/23 on 18 December 2023 28 Q4 2022/23 net profit decline impacted by non-recurring items, improved adjusted net profit Q4 Non-recurring items €m 2021/22 2022/23 Change € m / Increase due to Fnac Darty share at equity EBIT adjusted 94 94 0 (impairment -€82 m, net profit
Slide 29: Structural measures led to strong free cash flow
Results Presentation Q4/FY 2022/23 on 18 December 2023 29 Structural measures led to strong free cash flow Free cash flow (FCF) in FY 2022/23 (YoY change, €m) Δ NWC / Strong YoY increase due to stock reduction -53 +713 +21 +197 -4 +873 +6 +880 and receivables management Tax / Lower advance payments
Slide 30: Strong improvement in leverage ratio in FY 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 30 Strong improvement in leverage ratio in FY 2022/23 We have improved our leverage ratio significantly compared to prior year: Leverage target ratio <2.5x Prior year 2.3x Projection (CMD 2023) 2.3x Actual 1.9x ✓ (€1,687 m / €910 m) Net Debt inc
Slide 31: Agenda
I. Business update II. Financial performance III. Outlook and summary Agenda
Slide 32: Outlook 2023/24
Results Presentation Q4/FY 2022/23 on 18 December 2023 32 Outlook 2023/24 // Slight increase in currency- and portfolio-adjusted total sales // Clear improvement in adjusted EBIT // All segments are expected to contribute to the sales growth // Improvement in adjusted EBIT driven by DACH and Western
Slide 33: With our outlook for 2023/24, we are moving towards our 2025/26 target
Results Presentation Q4/FY 2022/23 on 18 December 2023 33 With our outlook for 2023/24, we are moving towards our 2025/26 target Sales (€m) Adjusted EBIT (€m) 2021/22 2022/23 2023/24 2025/26 2021/22 2022/23 2023/24 2025/26 / Net sales growth slightly above market growth / Adjusted EBIT above €500 m
Slide 34: Good start into peak season with solid Black Period
Results Presentation Q4/FY 2022/23 on 18 December 2023 34 Good start into peak season with solid Black Period / Solid demand for telecommunications and entertainment products, particularly gaming consoles, as well as selected SDAs (floor care) / Black season business has been well prepared with good
Slide 35: Summary of Q4 and FY results
Results Presentation Q4/FY 2022/23 on 18 December 2023 35 Summary of Q4 and FY results 01 02 Good operating momentum Despite a tough CE market, in FY 2022/23 our market share holds steady 03 04 We’re in control. Our We prioritize the customer measures to master the experience and are building curren
Slide 36: Questions & Answers
Results Presentation Q4/FY 2022/23 on 18 December 2023 36 Questions & Answers Dr. Karsten Wildberger Dr. Kai-Ulrich Deissner
Slide 37: Financial calendar
Results Presentation Q4/FY 2022/23 on 18 December 2023 37 Financial calendar Q1 2023/24 Shareholders Q2/H1 results Q3/9M results results meeting 9 February 2024 14 February 2024 15 May 2024 14 August 2024
Slide 38: Contact
Results Presentation Q4/FY 2022/23 on 18 December 2023 38 Contact CECONOMY AG Investor Relations Kaistr. 3 40221 Düsseldorf Germany Phone +49 (211) 5408 7222 Email IR@ceconomy.de https://www.ceconomy.de/en/investor-relations/ Fabienne Caron Dr. Kerstin Achterfeldt VP, Head of Investor Relations Seni
Slide 39: Appendix
Appendix
Slide 40: Q4 reported sales growth less affected by hyperinflation accounting
Results Presentation Q4/FY 2022/23 on 18 December 2023 40 Q4 reported sales growth less affected by hyperinflation accounting Impact of IAS 29 on Q4 sales growth 2,4 / +5.0% positive accounting impact on 2,1 sales growth 1,6 / Contribution in the opposite direction compared to Q3 / KPIs analysis pre
Slide 41: Reported EBIT bridge & portfolio effects
Results Presentation Q4/FY 2022/23 on 18 December 2023 41 Reported EBIT bridge & portfolio effects Q4 2022/23 Adj. EBIT1 / Sweden classified as disposal in accordance 94 (€m) with IFRS5 from Q2 2022/23, Portugal from -27 25 Q3 2022/23 / €108 m non-recurring items including -107 associates in Q4 2022
Slide 42: Net working capital Q4 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 42 Net working capital Q4 2022/23 Q4 2022/23 €m 30/06/2022 30/09/2022 Change 30/06/2023 30/09/2023 Change Inventories 3,378 3,176 -202 2,907 2,918 11 Trade receivables and similar claims 405 440 35 446 490 44 Receivables due from suppliers 1,067
Slide 43: Net working capital FY 2022/23
Results Presentation Q4/FY 2022/23 on 18 December 2023 43 Net working capital FY 2022/23 12M 2022/23 €m 30/09/2021 30/09/2022 Change 30/09/2022 30/09/2023 Change Inventories 3,111 3,176 65 3,176 2,918 -258 Trade receivables and similar claims 361 440 78 440 490 51 Receivables due from suppliers 1,14
Slide 44: Application of IAS 29, hyperinflation accounting
Results Presentation Q4/FY 2022/23 on 18 December 2023 44 Application of IAS 29, hyperinflation accounting Reported Sales Reported Sales IAS 29 IAS 29 €m sales pre-IAS sales pre-IAS effect effect 2021/22 29 2022/23 29 Q1 6,854 0 6,854 7,066 -15 7,080 Q2 5,019 0 5,019 5,302 32 5,270 Q3 4,659 66 4,593
Slide 45: From reported to adjusted net profit
Results Presentation Q4/FY 2022/23 on 18 December 2023 45 From reported to adjusted net profit FY 2021/22 FY 2022/23 FY 2021/22 FY 2022/23 €m Change Change Comment reported reported adjusted adjusted Reported EBIT 105 -21 -127 105 -21 -127 Adjustment: Portfolio 11 66 55 Sweden and Portugal Adjustmen
Slide 46: New segment reporting from 2023/24
Results Presentation Q4/FY 2022/23 on 18 December 2023 46 New segment reporting from 2023/24 €m Q1 2022/23 Q2 2022/23 Q3 2022/23 Q4 2022/23 FY 2022/23 Total Sales 7,066 5,302 4,527 5,347 22,242 DACH 3,935 2,885 2,538 2,681 12,040 West/South 2,235 1,630 1,497 1,675 7,037 East 742 678 395 951 2,766 Ot
Slide 47: Sales and stores per country
Results Presentation Q4/FY 2022/23 on 18 December 2023 47 Sales and stores per country Sales (€m) Sales (€m) Stores (#) Stores (#) Openings Closures FY 2021/22 FY 2022/23 30/09/2022 30/09/2023 Germany 9,798 9,771 399 4 -5 398 Austria 1,217 1,277 52 2 0 54 Switzerland 591 575 25 0 0 25 Hungary 440 43
Slide 48: Disclaimer and Notes
Results Presentation Q4/FY 2022/23 on 18 December 2023 48 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 The market research institutes which data CECONOMY used as basis for this (i
Slide 49: CECONOMY
O CECONOMY