Ceconomy Ag · XETR:CEC
Ceconomy — Ceconomy Ag Ord — Q3 2020 Earnings Presentation
39 slides from Ceconomy's earnings presentation, Aug 13, 2020
Slide 1: Q3 2019/20 Results Presentation
Q3 2019/20 RESULTS PRESENTATION Dr Bernhard Düttmann, Karin Sonnenmoser, Ferran Reverter Düsseldorf, 13 August 2020
Slide 2: Disclaimer and Notes
DISCLAIMER the actions of public authorities and other third parties, many of Such financial information is not necessarily indicative for the which are beyond our control, that could cause actual results, operational results, the financial position and/or the cash flow of the performance or financi
Slide 3: Agenda
Agenda 01 02 03 04 Highlights Business Financial Outlook Update Performance
Slide 4: Highlights
01 Highlights Date: 13 August 2020 // 4
Slide 5: CECONOMY has successfully navigated through this challenging time
CECONOMY has successfully navigated through this challenging time… Pre-Corona Lockdown phase Recovery phase COVID-19 store closures October – February March – April May – July Profitable Black Friday period, Sales and gross margin strongly Strong sales momentum also driven in-store and online impact
Slide 6: CECONOMY's Q3 19/20 in a nutshell
CECONOMY’s Q3 19/20 in a nutshell Strong sales recovery following easing of COVID-19 induced channel shift and lower Services COVID-19 restrictions & Solutions income weigh on gross margin Online business with ongoing strong performance Stock age structure still negatively influenced by despite stor
Slide 7: Excellent business recovery reflected in third quarter results
The excellent business recovery is already reflected in the third quarter results, which were above expectations –8.4% –45 €m Sales change yoy Adj. EBIT1,2 adjusted for fx-effects and excl. associates portfolio changes on prior year’s level 1Adjusted EBIT before non-recurring effects. 2Incl. IFRS 16
Slide 8: We have not lost sight of our strategic initiatives
Despite the pandemic, we have not lost sight of our strategic initiatives OMNI- SERVICES & CATEGORY & ORGANIZATION & CHANNEL SOLUTIONS SUPPLY CHAIN COST STRUCTURE MANAGEMENT Results Presentation Q3 2019/20 Public Date: 13 August 2020 // 8
Slide 9: Business Update
02 Business Update Date: 13 August 2020 // 9
Slide 10: We continued to make noticeable progress in many areas
We continued to make noticeable progress in many areas OMNI- SERVICES & CATEGORY & ORGANIZATION & CHANNEL SOLUTIONS SUPPLY CHAIN COST STRUCTURES MANAGEMENT 3m new online customers Sales recovery to previous year Introduction of standardized Continued focus on since March, also driven by leve
Slide 11: Key lessons for the next phase of our transformation
We also learnt key lessons for the next phase of our transformation We demonstrated An agile group- Embedding a more that we can react wide contingency central approach fast to approach proved and agility in the fundamentally highly effective organization to changing and successful accelerate the co
Slide 12: New Operating Model introduces standardized organization and operations
Our New Operating Model will introduce standardized organization and operations across all countries & stores HQ & Country Introduction of group-wide standardized organization and operations across functions all countries Central definition and roll-out of operational strategy including core con
Slide 13: We will establish unified structures with clear responsibilities
We will establish unified structures with clear responsibilities… Clear responsibilities Harmonized HQ and country functions Clear responsibilities for strategic guidelines, standard design Managing (General) Managing and execution of activities Director Managing Director Commercial Director Sales F
Slide 14: Empower store employees and offer outstanding customer service
…and empower store employees as well as free up resources to offer outstanding customer service Efficient organization New store leadership structure Standardized, unified structures and Chief Customer Business Officer clearly defined responsibilities to fully Backoffice Analyst focus on the custome
Slide 15: We will further optimize our store network
We will further optimize our store network, which remains a key element of our omni-channel approach Personal consultation Pick-up points 14 stores across Europe to be permanently closed in response to COVID-19 impacts Visibility for brands Store Network Further potential closure of >1,000 store
Slide 16: Goal to achieve savings of slightly more than 100 €m per year
Our goal is to achieve savings of slightly more than 100 €m per year towards an improved cost base Program expected to run for 24 – 36 months, Savings run-rate majority of savings in FY 22/23 expected Significant part of expenses expected to still Expenses1 become earnings effective in FY 19/20 Slig
Slide 17: New Operating Model is the fundament for the next phase
The New Operating Model is the fundament for the next phase of our transformation The ultimate goal is to become customer’s 1st choice Further develop omni-channel Improve customer experience and Embrace technology and big data to proposition combined with new operational excellence build fast & eff
Slide 18: Financial Performance
03 Financial Performance Date: 13 August 2020 // 18
Slide 19: Negative sales development exclusively related to COVID-19 lockdowns
Negative sales development exclusively related to COVID-19 lockdowns Q3 Total sales fx- and portfolio adj.1 Q3 Highlights (in €m) –8.4% Fx- and portfolio adjusted1 sales excl. iBood –10.0% at –8.1% 4,565 4,107 DACH: Germany, Austria and Switzerland impacted by store closures in April followed by
Slide 20: Group sales rebounded in May and gained momentum in June
Group sales rebounded in May and gained momentum in June after COVID-19 induced headwinds in March and April +8% +12% +1% +3% Total sales1,2 growth yoy -28% -43% +209% Online sales2 growth yoy +133% +97% +58% +3% +17% Jan Feb Mar Apr May Jun Open stores3 14% 59% 70% 100% 100% 100% 1Sales adjusted fo
Slide 21: Strong online sales momentum; Services & Solutions impacted by store closures
Strong online sales momentum, while Services & Solutions business was mainly impacted by store closures Q3 Online sales1 Q3 Highlights (in €m) +145.1% Online1 growth +153.1% excl. iBood 1,446 Strong online performance continued, despite gradual reopenings 590 in % of sales 35.2% 13.0% Almost 3
Slide 22: COVID-19 related cost reductions compensated lower gross margin
COVID-19 related cost reductions compensated lower gross margin Q3 Gross margin1,2 (in % of sales) OPEX1,2,3 (in % of sales) Absolute Q3 Highlights –2.8%p. including cost savings: non-recurring effects –2.6%p. –2.4%p. 185 €m Gross margin impacted by COVID-19 induced channel and product mix effects
Slide 23: Adjusted EBIT on prior year's level despite COVID-19 impact
Adjusted EBIT on prior year’s level despite COVID-19 impact on business Q3 Adj. EBIT1,2 excl. associates (in €m) Q3 Highlights Adj. EBIT on prior-year’s level, driven by COVID-19 related cost measures and sales recovery in May and June DACH: Solid performance in Germany mainly -43 driven by COVI
Slide 24: Expenses related to permanent store closures impacted reported EBIT
Expenses related to COVID-19 induced permanent store closures impacted reported EBIT Q3 Adj. EBIT1,2 excl. associates to reported EBIT (in €m) − Expenses for COVID-19 induced store closures + Restructuring gain (1 €m) − Regular Fnac -45 Darty D&A -18 component -1 -64 Adj. EBIT Q3 19/20 Non-recurring
Slide 25: EPS impacted by higher taxes despite higher earnings
EPS impacted by higher taxes despite higher year-on-year earnings €m Q3 2018/19 Q3 2019/20 Change Q3 Highlights EBITDA –69 154 223 Reported EBITDA includes c. 133 €m IFRS 16 effect EBIT –126 –64 61 Reported EBIT includes c. 1 €m IFRS 16 effect Net financial result 12 –13 –25 Earnings before taxe
Slide 26: Adjusted Free Cash Flow improved year-on-year
Adjusted Free Cash Flow improved year-on-year 9M 2019/20: Free Cash Flow (in €m) 9M Highlights 766 Adj. Free Cash Flow improved by 149 €m yoy 6 50 27 Change in NWC broadly stable: Comparatively -654 -141 lower increase in inventories and a -403 -376 comparatively higher reduction in receivables
Slide 27: Outlook
04 Outlook Date: 13 August 2020 // 27
Slide 28: Underlying assumptions for remainder of FY 19/20
Underlying assumptions for remainder of FY 19/20 Based on the preliminary business development in 9M 19/20 and the current insights, the outlook for FY 19/20 was specified on 16 July 2020 Assuming no further COVID-19 related restrictions in the remaining months of FY 19/20 Sales momentum from June c
Slide 29: Outlook for FY 19/20
Outlook for FY 19/20 Adjusted for portfolio changes Excluding non-recurring earnings effects in connection with (1) the reorganization and efficiency program announced on 29 April 2019, (2) COVID-19 related store closures and (3) the introduction of the New Operating Model FY 19/20 thereof IFRS
Slide 30: Key take-aways
Key take-aways 1 2 3 We have not lost sight The New Operating of our strategic We demonstrated our Model is the initiatives and also ability to act during fundament for the continued to make the Corona crisis next phase of our noticeable progress in transformation many areas We are confident regardi
Slide 31: Q&A
Q&A Dr Bernhard Düttmann Karin Sonnenmoser Ferran Reverter Chief Executive Officer Chief Financial Officer Chief Executive Officer CECONOMY AG CECONOMY AG Media-Saturn-Holding GmbH Results Presentation Q3 2019/20 Public Date: 13 August 2020 // 31
Slide 32: Contact
CECONOMY AG Investor Relations CONTACT Kaistr. 3 40221 Düsseldorf Germany Tel.: +49 (211) 5408-7222 Email: IR@ceconomy.de https://www.ceconomy.de/en/investor-relations/ Date: 13 August 2020 // 32
Slide 33: Notes
Notes All numbers in the presentation incl. IFRS 16 (unless otherwise stated) The disposal of the Greek MediaMarkt business is treated as a portfolio effect Guidance-relevant EBIT excludes associates and is adjusted for portfolio effects. Non- recurring earnings effects in connection with (1)
Slide 34: Phasing of expenses and savings for the New Operating Model
Phasing of expenses and savings for the New Operating Model and the further optimization of our store network Annual gross savings >100 >100 (in €m) 80-90 20-30 Total P&L expenses1 Up to c.130 (in €m) Up to c.50 Timing FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 1Includes c.5 €m non-cash accounting
Slide 35: IFRS 16 effects on EBITDA and EBIT
IFRS 16 effects on EBITDA and EBIT IFRS 16 effect IFRS 16 effect in EBITDA in EBITDA €m Q3 19/20 9M 19/20 DACH 80 241 Western/Southern Europe 40 129 Eastern Europe 12 36 Others1 2 9 Total 134 415 IFRS 16 effect IFRS 16 effect in EBIT in EBIT €m Q3 19/20 9M 19/20 DACH 1 3 Western/Southern Europe 0 1
Slide 36: Store network as of 30 June 2020
Store network as of 30 June 2020 31/03/2020 Openings Closures 30/06/2020 Q3 Highlights Germany 428 – 2 426 Austria 52 – – 52 1 store opening in Italy and 2 store closures in Switzerland 26 – – 26 Germany Hungary 32 – – 32 DACH 538 – 2 536 Average store size at 2,608 sqm at the end of Belgium 27
Slide 37: Net Working Capital
Net Working Capital1 €m 30/09/2018 30/06/2019 Change 30/09/2019 30/06/2020 Change Inventories 2,480 2,802 322 2,548 2,780 232 Trade receivables and similar claims 610 530 –80 455 467 12 Receivables due from suppliers 1,241 1,157 –83 1,295 970 –325 Trade liabilities and similar liabilities –5,745 –5,
Slide 38: Financial calendar and events
Financial calendar and events Financial calendar Q4/FY 2019/20 trading statement 23 October 2020 FY 2019/20 results 15 December 2020 Upcoming events Virtual Roadshow KeplerCheuvreuxFrankfurt 1 September 2020 Frankfurt Virtual Roadshow Paris, Bryan Garnier 2 September 2020 Commerzbank Corporate Confe
Slide 39: Date: 13 August 2020
Date: 13 August 2020 // 39