Ceconomy Ag · XETR:CEC
Ceconomy — Investor Presentation (January 2018)
53 slides from Ceconomy's investor presentation, January 2018
Slide 1: CECONOMY AG Equity Story
CECONOMY AG “Equity Story“ Investor Presentation, January 2018
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 operates, in part, in industries and channels for information. Neither we nor any third party shall be responsible forward-looking statements or to conform them to events or which it is difficult to obta
Slide 4: CECONOMY at a glance: Europe's largest CE platform
CECONOMY at a glance: Europe’s largest CE 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. We are the 22.2 bn € sa
Slide 5: 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 Investor Present
Slide 6: CECONOMY Strategy
// CECONOMY Strategy January 2018 // 6
Slide 7: The 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 13.4% 13.5% 13.2% Sweden Russia 14/15 15/16 16/17 The Netherlands 27 57 DIVERSIFIED EXPOSURE Belgium WITH 1,053 STORES & WEBSHOPS ACROSS 15 49 Germany Poland COUNTRIES IN EUROPE 28 429 86 2 27 5
Slide 8: One of the leading multi-channel players in Europe
One of the leading multi-channel players in Europe Online Sales (in € million) Pick-up rate (in % of online orders) 2,407 42% 42% 40% 1,952 1,766 FY 14/15 FY 15/16 FY 16/17 FY 14/15 FY 15/16 FY 16/17 Online Sales Share (in %) Online Visitors (in million) 1,318 10.9% 1,193 8.9% 1,013 8.1% FY 14/15 FY
Slide 9: We are multi-channel
We are multi-channel 30% of all store visitors have initially visited our webshop Full multi-channel customer journey leads to a More than 50% of conversion rate >20% online purchases started in one of our stores There is a 60% higher likelihood of selling a 63% of our web shop product if the visito
Slide 10: 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 11: The store network is an asset again and integral part of multi-channel strategy
The store network is an asset again and integral part of CECONOMY’s multi-channel and services strategy Advantages of CECONOMY’s strong physical presence // Offering customers tangible product experiences // Showroom for exclusive and high-end products offering suppliers visibility of brands // Inst
Slide 12: CECONOMY offers the full CE assortment
CECONOMY offers the full CE assortment, reflecting a truly “connected world” Other2 Product Category Entertainment Computer Hardware1 Breakdown FY 16/17 6% & Accessories 10% 21% Telecommunications 19% 22% Brown Goods White Goods 22% 1 Telecommunication devices such as iPads without SIM card included
Slide 13: CECONOMY is highly relevant to its suppliers and a strategic partner of choice
CECONOMY is highly relevant to its suppliers and a strategic partner of choice Sales Share in % (CECONOMY FY 16/17) CECONOMY Supplier CECONOMY’s Weight at Vendor / Supplier1 (FY16/17) 20% Supplier 1 18% 11% Supplier 2 13% Read: CECONOMY 6% Supplier 3 29% generates 20 % of its sales with “Supplier 1”
Slide 14: We are solutions: a full range of Services & Solutions
We are solutions: a full range of Services & Solutions FACT BOX Services & Solutions Sales along the customer journey (in € million) 1,301 1,379 994 (Pre-)Buy Set-up & Use Repair 14/15 15/16 16/17 Consumer credit and Personalised products Refurbishment leasing Customer advisory & In-warran
Slide 15: We are customer-centric: >14.5 million loyal members
We are customer-centric: >14.5 million loyal members in our customer programmes >14.5m 25% members in our customer programmes of all sales in Germany are generated by across all countries German MediaMarkt Club members 3.8m customer program members in >600k Saturn Card holders in just 4 months Germa
Slide 16: CECONOMY FY 2016/17
// CECONOMY FY 2016/17 January 2018 // 16
Slide 17: CECONOMY achieved all targets in FY 2016/17
CECONOMY achieved all targets in FY 2016/17 FY 2015/16 Outlook FY 2016/17 Achieved (fx-adjusted) (fx-adjusted) €m 1 Salessales Total 21,870 Slight increase +1.4% ✓ LfL sales growth +0.1% Slight increase +1.9% ✓ EBIT before special items 466 Slight increase +10 ✓ Investments 1 406 300 – 350 319 ✓ Pay
Slide 18: Solid sales growth, slight increase in EBIT and improvement in NWC
CECONOMY delivered solid sales growth, a slight increase in EBIT and an improvement in NWC (€m) (€m) (€m) +1.3% -15 +6 +277 22,155 719 466 471 52 21,870 704 -225 FY 15/16 FY 16/17 FY 15/16 FY 16/17 FY 15/16 FY 16/17 FY 15/16 FY 16/17 Sales EBITDA EBIT Change in Net Working Capital (NWC) // Total sal
Slide 19: Improved sales growth rates, primarily driven by DACH region
Improved sales growth rates, primarily driven by DACH region Total and LfL Sales Development (yoy change) Total LfL Highlights 5.8% 1.9% 4.6% 1.3% // Strong sales growth in Q4 2016/17, supported by a favourable comparison base and investments to 0.6% strengthen our position in selected markets -1.0%
Slide 20: Online was the key growth driver and represented 11% of total sales
Online was the key growth driver and represented 11% of total sales Online Sales (in €m) Highlights +21% +23% 565 2,407 466 1,952 // Online generated sales of MediaMarkt and Saturn grew by +39% in Q4 2016/17 or +21% including pure player (e.g. redcoon), respectively // Online now represents 10.9% of
Slide 21: Rising demand for Services & Solutions
Rising demand for Services & Solutions, accounting for 6.2% of total sales Services & Solutions Sales (in €m) Highlights +16% +6% 395 1,301 1,379 340 // Services & Solutions sales increased +16% year-on- year in Q4 2016/17, largely driven by mobile and financing services // Over the last 12 months,
Slide 22: MediaMarkt Club and Saturn Card continue to grow strongly
MediaMarkt Club and Saturn Card continue to grow strongly Customer Programme Members MM Club Saturn Card* Highlights Germany (in k) +777 +662 +553 3,805 +578 3,028 // Linear growth of MediaMarkt Club Germany continues 2,366 with around 1m new members every 6 months, now 1,813 3,196 1,235 2,763 count
Slide 23: Continued reduction in average store size
Continued reduction in average store size Number of stores 9M 16/17 Q4 16/17 Highlights +40 -9 1,053 27 // Selective store expansion continued with 13 openings 1,023 -1 13 -10 and 1 closure in Q4 2016/17 // Average store size further reduced by -3.4% over the last 12 months to now 2,811sqm due to op
Slide 24: Solid increase in profitability in Q4 2016/17
Solid increase in profitability in Q4 2016/17 EBITDA & EBIT (in €m) EBITDA EBIT Highlights +14 +37 288 302 244 207 // Substantial improvement in gross margin of +0.8%p. to 22.6% in Q4 2016/17 // Considerable earnings uplift in Germany supported by additional later income Q4 15/16 Q4 16/17 Q4 15/16 Q
Slide 25: Rising operational EBITDA offset by lower pension income and holding costs
Rising operational EBITDA offset by planned lower pension income and additional expenses for the formation of a listed holding company EBITDA & EBIT (in €m) Includes c. €20m higher unscheduled 719 704 write-downs 719 704 Pension income 35 18 D&A 253 233 Operational 718 705 +12 EBITDA Rising operatio
Slide 26: Significant improvement in EPS
Significant improvement in EPS €m FY 15/16 FY 16/17 Change EBITDA 719 704 -15 Highlights margin (%) 3.3% 3.2% -0.1%p. EBIT 466 471 +6 Minor decline in net financial result due to unscheduled margin (%) 2.1% 2.1% 0.0%p. impairment on financial assets, while interest expenses Net financial result -22
Slide 27: Underlying Free Cash Flow improved by around €420m
Underlying Free Cash Flow improved by around €420m FY 2016/17: Free Cash Flow (in €m) Fnac Darty Highlights 597 52 acquisition 31 521 -160 // Free Cash Flow adjusted for loans repayment granted -458 182 Incl. c. €20m higher tax to METRO support fund, acquisition of Fnac Darty refund stake and tax re
Slide 28: CECONOMY Targets, Value Drivers & Enablers
// CECONOMY Targets, Value Drivers & Enablers January 2018 // 28
Slide 29: CECONOMY is well progressing in the different change phases in Consumer Electronics
CECONOMY is 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 processes and has created new bus
Slide 30: CECONOMY's plans show a clear and strong value creation potential
CECONOMY’s plans show a clear and strong value creation potential #1 #2 #4 #5 Category Value #3 Online, Services & Customer Selective driver Management, Mobile, Solutions Data / CRM Expansion Pricing, Supply Store Chain Enabler #6 #7 #8 Portfolio Competitive Cost Base Net Working Capital #9 Digital
Slide 31: What we plan to do in FY 2017/18
What we plan to do in FY 2017/18 Further develop Leader of consolidation store/online/mobile in the European CE sector experience Roll-out service Improve performance in “smartbars” and Russia and Sweden “@ home services” Milestones in FY 2017/18 Introduce multi-level Reach more than logistics conce
Slide 32: Outlook FY2017/18
Outlook FY2017/18 The outlook is adjusted for currency effects and portfolio changes. FY 2016/17 1 FY 2017/18 €m Total 1 Salessales 22,155 Slight increase 2 EBITDA (excl. Fnac Darty) 704 At least mid single-digit % growth EBIT (excl. Fnac Darty) 471 At least mid single-digit % growth Fnac Darty prof
Slide 33: Key initiatives to further grow online/mobile/store
Key initiatives to further grow online/mobile/store // Expansion of online CE assortment from currently c. 350k SKUs to 1m SKUs Assortment // Dropshipment initiatives to increase assortment without capital locked Online Sales1 (% of total sales) // Taking advantage of our high traffic we include mor
Slide 34: 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” until the end of 2018 In-store services (642 already in place) // Additional services to be added: e.g. trade in, personalisation of products Services & Sol
Slide 35: Selective store expansion contributing to sales growth target
CECONOMY also continues selective store expansion contributing to the overall sales growth target Number of stores (at period end) Formats and measures 1,053 1,023 // Roll-out especially of smaller store formats such as proximity 1,007 986 and shop-in-shop concepts // Focus on smaller formats leads
Slide 36: Ongoing portfolio improvement; strategic answers for Russia and Sweden
Ongoing portfolio improvement is well on track; we are committed to find strategic answers for Russia and Sweden until end of 2018 redcoon Turkey Russia Sweden // Restructuring of redcoon // Succeeded in turning // Initiated cost savings and // Initiated cost savings completed around Turkey margin m
Slide 37: New category management initiatives
New category management initiatives aim offering the right range and assortment at the right price Preparation Implementation Results // Change of organizational structure by // Category management pilots have been // Aligning brand and price structure to centralizing purchasing activities on a star
Slide 38: Introducing multi-level logistics concepts
Introducing multi-level logistics concepts with central warehouses, cross- docking platforms and regional delivery hubs Central warehouses Regional delivery hubs Online warehouses (Parcel factory) // Pilot central warehouses introduced // Regional warehouses especially for // Expansion of eCommerce
Slide 39: Case study: Germany – Dropshipment
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 40: Case study: Germany – 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 41: CECONOMY's overall mid-term ambitions
CECONOMY’s overall mid-term ambitions CORE METRICS 2015/16 2016/17 MID-TERM COMMENTARY AMBITIONS // Moderate market growth expected Sales1 €21.9bn €22.2bn > 3% CAGR // // Further increase in market shares in core markets Online, mobile, multi-channel, CRM and Services & (1.5% yoy) (1.4% yoy) Solutio
Slide 42: Impressions
// Impressions January 2018 // 42
Slide 43: Smart Bars
Smart Bars Investor Presentation Public January 2018 // 43
Slide 44: In-store experience areas
In-store experience areas Investor Presentation Public January 2018 // 44
Slide 45: Pick-up points for online orders
Pick-up points for online orders Investor Presentation Public January 2018 // 45
Slide 46: Digital shelf labels
Digital shelf labels Investor Presentation Public January 2018 // 46
Slide 47: Back Up
// Back Up January 2018 // 47
Slide 48: Sales & number of stores by country
Sales & number of stores by country Sales (€m) Number of Stores FY 2015/16 FY 2016/17 FY 2015/16 Openings Closures FY 2016/17 Germany 10,273 10,556 424 5 - 429 Austria 1,139 1,169 49 1 - 50 Switzerland 674 635 28 - -1 27 Hungary 272 302 22 2 - 24 DACH 12,358 12,662 523 8 -1 530 Belgium 681 686 23 7
Slide 49: EBITDA to EPS
EBITDA to EPS €m Q4 2015/16 Q4 2016/17 FY 2015/16 FY 2016/17 EBITDA 288 302 719 704 EBITDA margin (%) 5.7% 5.7% 3.3% 3.2% DACH 173 201 493 539 Western & Southern Europe 90 76 230 169 Eastern Europe -2 15 9 34 Others 27 9 -12 -38 EBIT 207 244 466 471 EBIT margin (%) 4.1% 4.6% 2.1% 2.1% DACH 127 169 3
Slide 50: Balance sheet movements
Balance sheet movements €m 30/09/2016* 30/06/2017 30/09/2017 Non-current assets 1,774 1,614 2,144 Intangible assets 592 624 631 Property, plant and equipment 881 840 858 Fnac Darty stake Investment accounted for using the equity method 5 4 458 Other financial and non-financial assets 296 145 197 Inc
Slide 51: Fnac Darty consolidation
Fnac Darty consolidation FNAC H2 2017 FNAC H1 2018 FNAC H2 2018 4/6 CEC Q4 16/17 CEC Q1 17/18 CEC Q2 17/18 CEC Q3 17/18 CEC Q4 17/18 CEC Q1 18/19 30.06. 01.09. 30.09. 31.12. 31.03. 30.06. 30.09. 31.12. 2017 2017 2017 2017 2018 2018 2018 2018 // Our 24.33% stake in Fnac Darty is accounted for as “Inv
Slide 52: Upcoming events
Upcoming events Q1 Sales 1 2017/18 results Friday, 9 February 2018 AGM 2018 Wednesday, 14 February 2018 Q2/H1 2017/18 results Thursday, 17 May 2018 Q3/9M 2017/18 results Tuesday, 14 August 2018 FY 2017/18 results Wednesday, 19 December 2018 Investor Presentation Public January 2018 // 52
Slide 53: Date: 02/01/2018
Date: 02/01/2018 // 53