Fnac Darty Sa · EURONEXT:FNAC
Fnac Darty Sa — Investor Day (February 2021)
71 slides from Fnac Darty Sa's investor day presentation, Feb 23, 2021
Slide 1: Capital Markets Presentation
CAPITAL MARKETS PRESENTATION February 23, 2021
Slide 2: Today's Speakers
TODAY’S SPEAKERS ` ` Enrique MARTINEZ Jean-Brieuc LE TINIER Chief Executive Officer Chief Financial Officer 2
Slide 3: Two iconic brands with a unique positioning and model
Two iconic brands with a unique positioning and model, whose strength was spotlighted by the covid crisis 3
Slide 4: Two iconic and complementary brands, with a vast customer base
TWO ICONIC AND COMPLEMENTARY BRANDS, WITH A VAST AND READILY MOBILIZED CUSTOMER BASE #2 Most missed brand by French consumers during the first lockdown A QUEST FOR INDIVIDUALITY A QUEST FOR ESSENCE DARE CARE Self-fulfillment, discovery Serenity, simplicity Segmentation Activation Cross-brands 30M ac
Slide 5: A strong international presence with online and offline footprints
A STRONG INTERNATIONAL PRESENCE WITH SIGNIFICANT ONLINE AND OFFLINE FOOTPRINTS 751 points of sale 832M annual online visits 85 points of sale 69M annual online visits 34 points of sale 75M annual online visits 38 points of sale 82M annual online visits Note - as of end Dec 2020 5
Slide 6: A high exposure to growth categories in the post-covid world
A HIGH EXPOSURE TO GROWTH CATEGORIES, PARTICULARLY IN THE POST-COVID WORLD… Our markets are growing of our product of our product 2020 FR market value, €M1 c.10% mix on declining categories c.75% mix on growth categories 6 500 6 000 IT … a smooth replacement … a growth particularly strong 5 500 Majo
Slide 7: Unrivalled leadership on the high-end segment of our markets
… AND AN UNRIVALLED LEADERSHIP ON THE HIGH-END SEGMENT OF OUR MARKETS 26% 46% 20% Fnac Darty 2019 30% market share Fnac Darty 2019 premium market share1 18% 30% 17% 22% Source - GFK, France 7 1. Premium corresponding to 4th quartile in terms of price positioning
Slide 8: Our model and three core strengths
THESE ACHIEVEMENTS HIGHLIGHT THE RELEVANCE OF OUR MODEL AND THREE CORE STRENGTHS OMNICHANNEL PEERLESSS INNOVATION POWER SERVICES 8
Slide 9: A proven omnichannel model outperforming pure players during covid
A PROVEN AND SUCCESSFUL OMNICHANNEL MODEL, OUTPERFORMING PURE PLAYERS DURING THE COVID CRISIS 900+ multi-format stores Online market share gain3 c. 17,000 direct contact with customers dedicated Group staff in +4,0 pt c. 44M average monthly online unique visitors1 +2,6 pt c. 50% of online sales are
Slide 10: A resilient model reinforced by unmatched service offering
A RESILIENT MODEL, REINFORCED BY OUR UNMATCHED SERVICE OFFERING THROUGHOUT THE CUSTOMER JOURNEY PRE-PURCHASE PURCHASE POST-PURCHASE Advise Finance Deliver Install Use Protect Repair Recycle 800,000 credit 1h & D+1 Click 1M+ c.1.5M repairs cards & Collect subscriptions per year On & offline advice #1
Slide 11: A historical innovative spirit keeping us ahead of competition
A HISTORICAL INNOVATIVE SPIRIT, KEEPING US AHEAD OF COMPETITION 2020 1968 First retailer in the world to Creation of the first operate an unlimited MDA aftersales services 2011 repair subscription service1 Launch of Kobo 2018 by Fnac Launch of the 1972 vocal command 2019 First retailer in the world
Slide 12: Covid crisis accelerated consumer behavior trends
THE RELEVANCE OF OUR CHOICES WAS SPOTLIGHTED BY THE COVID CRISIS, WHICH ACCELERATED CONSUMER BEHAVIOR TRENDS Click & collect Durable choice Proximity CSR strategy Digital bond Personalization Marketplace … Logistics capacity Membership program Value of the offer The will to embrace and lead these tr
Slide 13: Our next transformation: three convictions
Our next transformation will be driven by three convictions consistent with our Group mission 13
Slide 14: We have three convictions on the future of retail
WE HAVE THREE CONVICTIONS ON THE FUTURE OF RETAIL Omnichannel is the winning model of retail Advice and service are necessary to the purchasing act Consumer behaviors will mainly be driven by environmental concern in the long term 14
Slide 15: Our powerful Group mission
THESE CONVICTIONS SHAPE AND ARE SHAPED BY OUR POWERFUL GROUP MISSION Commit to an educated choice and a sustainable consumption S’engager pour un choix éclairé et une consommation durable 15
Slide 16: Conviction #1: Omnichannel is the winning model of retail
CONVICTION #1 OMNICHANNEL IS THE WINNING MODEL OF RETAIL Omnichannel has proven its ... with a reinforced … and an increased leadership with the covid crisis… role of the stores… online penetration +7pts 80% >25% online marketshare for non-food of French customers declare online sales growth omnicha
Slide 17: Conviction #2: Advice and service are necessary to the purchasing act
CONVICTION #2 ADVICE AND SERVICE ARE NECESSARY TO THE PURCHASING ACT From facing hyperchoice… … to making the right choice… … and being enabled to use it 250M 7-8 >80% results on maximum options a consumer can of consumers say they have digest before regretting their had difficulties installing and
Slide 18: Conviction #3: Behaviors driven by environmental concern
CONVICTION #3 CONSUMER BEHAVIORS WILL MAINLY BE DRIVEN BY ENVIRONMENTAL CONCERN IN THE LONG TERM Greater environmental concern… … driving new ways of consuming >75% 60% >80% of customers would choose a of customers buy of customers consider use responsible retailer over alternatives1 second-hand pro
Slide 19: Our new strategic plan at the heart of customers' daily life
As an answer to these convictions, our new strategic plan is at the heart of customers’ new daily life 19
Slide 20: Everyday
v0) EVERYDAY everyday au service cde nos clients everyday companion of our clients
Slide 21: How do we commit to an educated choice and sustainable consumption?
HOW DO WE COMMIT TO AN EDUCATED CHOICE AND A SUSTAINABLE CONSUMPTION, EVERYDAY? Build a digitized omnichannel retail Scale the next in-home Lead durable subscription-based behaviors assistance service 21
Slide 22: Everyday: Digitized omnichannel retail
EVERYDAY, … Digitized omnichannel retail Durable behaviors In-home assistance service 22
Slide 23: Build a digitized omnichannel retail
BUILD A DIGITIZED OMNICHANNEL RETAIL, THANKS TO… DIGITIZED OMNICHANNEL best-in-class online capacities a profitable and digitized store network a high-value offer #convenience >30% 50% 100% #experience online revenue of online revenue of stores #uniqueness penetration by 2025 from Click & Collect pr
Slide 24: Our best-in-class online capacities
DIGITIZED OMNICHANNEL Our best-in-class online capacities 24
Slide 25: How do we achieve best-in-class online capacities?
HOW DO WE ACHIEVE BEST-IN-CLASS ONLINE CAPACITIES? DIGITIZED OMNICHANNEL Today Tomorrow Strong online capacities that > 50% of total Capex invested by 2025 to offer the best fuel our omnichannel model experience, bearing Fnac Darty’s distinctive signature €2.7bn online GMV1 Best-in-class Distinctive
Slide 26: Best-in-class user experience
Best-in-class DIGITIZED OMNICHANNEL user experience Supported by a new search engine algorithm1 AI-based personalization use cases Mobile-first Note: new website live in H1 2021 1. New search engine algorithm live in H1 2021 26
Slide 27: Distinctive signature through expert advice
Distinctive signature DIGITIZED OMNICHANNEL through expert advice Advice at the center New ways of bonding of our website with customers online Highlight of the Fnac Darty choice… Widespread development with the central role of the expert influencer1 of livestreams Face-to-face live with expert sale
Slide 28: Enhanced logistics to increase capacity
Enhanced logistics to DIGITIZED OMNICHANNEL increase capacity Mechanization and … to keep up with automation… online growth New modern and high level equipment Web fulfillment unit costs reduced by by 2023 for technical and small over 20% electronic products Capacity to keep up with online growth c.
Slide 29: Our profitable and digitized store network
DIGITIZED OMNICHANNEL Our profitable and digitized store network 29
Slide 30: How do we achieve a profitable digitized store network?
HOW DO WE ACHIEVE A PROFITABLE DIGITIZED OMNICHANNEL AND DIGITIZED STORE NETWORK? Today Tomorrow A profitable network, which is A stronger and more digitized network, key to customer proximity fostering the expertise of salesperson and digital footprint c. 95% of stores are profitable1 The cornersto
Slide 31: The cornerstone of our digital footprint
The cornerstone of DIGITIZED OMNICHANNEL our digital footprint Immediacy of Store contribution omnichannel services to online profitability 1-hour Click & Collect, the most Increased online penetration low-carbon delivery option1 in the stores’catchment areas Immediate access to services & repairs C
Slide 32: Optimized current store network
Optimized current DIGITIZED OMNICHANNEL store network Optimization of Leveraging of development our existing network opportunities Full range of possible actions to strengthen Mostly under the franchise model our network and reach 100% profitability1 Retail space Real estate reallocation negociation
Slide 33: Expertise and experience
Expertise DIGITIZED OMNICHANNEL and experience Empowered in-store experts Enhanced customer journey Investment in training and coaching New “welcomer” role in each store to welcome, help and guide customers New smart IA platform to better serve the customers “Single Point of Resolution” approach: ea
Slide 34: Our high-value offer
DIGITIZED OMNICHANNEL Our high-value offer 34
Slide 35: How do we achieve a high-value offer?
HOW DO WE ACHIEVE A HIGH-VALUE OFFER? DIGITIZED OMNICHANNEL Today Tomorrow Unique positioning on An uncompromised acceleration value in Culture, to offer high-value products to all Technology and Design 1st Top-of-mind brand awareness on our markets Conquest of Dynamic and spot- Enhanced legitimate
Slide 36: Conquest of legitimate territories: White goods
Conquest of DIGITIZED OMNICHANNEL White goods legitimate territories A position A full-stack action plan of historical leader to further consolidate Offer range and exclusivities Rally existing small networks to Darty brand Positioning on durability Reinforce our service & logistics offer Territory
Slide 37: Dynamic and spot-on diversification: Urban mobility
Dynamic and spot- DIGITIZED OMNICHANNEL Urban mobility on diversification A holistic offer promoting Omnichannel dedicated eco-friendly urban mobility distribution Dedicated spaces in stores Accessories + Services Financing Home delivery services Digital corners Warranty Leasing Setup Main
Slide 38: New standards of human-to-human omnichannel excellence
WE SET THE NEW STANDARDS OF HUMAN-TO-HUMAN OMNICHANNEL DIGITIZED OMNICHANNEL EXCELLENCE BY CLOSING THE LOOP OF WEB AND STORES SYNERGIES… From bringing the web into our stores… ... to bringing our stores online, with the strength of our 12,000 in-store salespeople In-store salespeople Expertise and c
Slide 39: Strengthening our model's digital edge
… AND BY STRENGHTENING OUR MODEL’S DIGITAL EDGE DIGITIZED OMNICHANNEL More connected More social More live More personalized More data-driven 39
Slide 40: Everyday: Durable behaviors
EVERYDAY, … Digitized omnichannel retail Durable behaviors In-home assistance service 40
Slide 41: Lead durable behaviors, thanks to...
LEAD DURABLE BEHAVIORS, THANKS TO… DURABILITY a more durable offer, combined with customers’ orientation towards durable products the promotion of responsible behaviors, notably through eased access to repair #durability 135 c.2,5M #repair “durability score” products repaired #use by 20251 in 20252
Slide 42: How do we achieve our ambition on durability?
HOW DO WE ACHIEVE OUR AMBITION ON DURABILITY? DURABILITY Today Tomorrow From a pioneer position … to an uncompromising leadership via a on sustainable choice… sustainable ecosystem of products and services The right solutions A more durable A well-established and advice to offer reputation consume b
Slide 43: A more durable offer
A more DURABILITY durable offer A unique scoring of the A more durable offer durability of our offer Apply durability criteria to our offer A unique and rich aftersales & repair selection and engage suppliers database that enables to compute an independent durability scoring Carefully select Marketp
Slide 44: The right solutions and advice to consume better
The right solutions and DURABILITY advice to consume better Purchase better: guide customers Use better and foster repair towards durable consumption In stores and online Experts and communities Repair services 44
Slide 45: A well-established reputation
A well-established DURABILITY reputation 45
Slide 46: Strengthening our leadership on durability with a holistic ecosystem
THIS AMBITION WILL STRENGTHEN OUR LEADERSHIP ON DURABILITY DURABILITY WITH A HOLISTIC ECOSYSTEM… ASSISTANCE & REPAIR DURABLE OFFER RECYCLING SECOND LIFE USED PRODUCTS COLLECTION 46
Slide 47: Contributing to our reference CSR strategy
… AND ACTIVELY CONTRIBUTE TO OUR REFERENCE CSR STRATEGY DURABILITY THAT ALREADY SHOWCASES GREAT ACHIEVEMENTS Acceleration on durable consumption EDUCATED SERVICES & +50% repaired products in 2025 vs 2019 CHOICE PRODUCTS Uncompromising behavior on the basics HUMAN GOVERNANCE TERRITORIES (gender parit
Slide 48: Everyday: In-home assistance service
EVERYDAY, … Digitized omnichannel retail Durable behaviors In-home assistance service 48
Slide 49: Scale the next in-home subscription-based services
SCALE THE NEXT IN-HOME SUBSCRIPTION-BASED SERVICES ASSISTANCE SERVICES BY… unlocking the full potential of our exclusive unlimited repairs subscription program #subscription >2M #margin subscribers to our unlimited repairs #use subscription program by 2025 #derisked retail 49
Slide 50: How do we achieve our ambition on services?
HOW DO WE ACHIEVE OUR AMBITION ON SERVICES? SERVICES Today Tomorrow An exclusive MDA unlimited Complete our service model transformation repairs subscription program and unlock the full potential of Darty Max c. 200k subscribers only one year after launch Whole home, A subscription- A valuable bond
Slide 51: Whole home, available everywhere
Whole home, SERVICES available everywhere From our products… From our stores… to the entire home to everywhere … From ... to all ... to the entire From our … to every customer ... to B2B partners MDA… our products home stores… touchpoint c.1Bn touchpoints today1 The path to become the undisputed lea
Slide 52: A subscription-based model
A subscription- SERVICES based model <10€1 Eased access Recurring x2,5 to high-value margin generated a month to protect cash flows over a 5 year-period one’s every appliance services vs. warranty extension 50%2 Maximum Loyalty and >50%1 of French households MDA additional declare they would conveni
Slide 53: A valuable bond with customers
A valuable bond SERVICES with customers The way we conceive The way we operate the service the service “Zero hassle” solution Personalized customer relation Simple solution Rapid intervention Transparent conditions Advice and unique advantages to encourage customers to use Without engagement the ser
Slide 54: Proven ability to launch, sell and operate subscriptions, and repair
WE LEVERAGE OUR PROVEN ABILITY TO LAUNCH, SELL AND OPERATE SERVICES SUBSCRIPTIONS, AND TO REPAIR Design the service No one else than Customers Non customers Fnac Darty Recruit customers Stores B2C Other B2B2C Partners can offer such a complete contact points expertise to run this exclusive service a
Slide 55: All of Everyday is in each of its ambitions
ALL OF EVERYDAY IS IN EACH OF ITS AMBITIONS Build a digitized omnichannel retail Scale the next in-home Lead durable subscription-based behaviors assistance service 55
Slide 56: Empowerment of our dedicated staff to accompany customers
THE SUCCESS OF THIS PLAN WILL RELY ON THE EMPOWERMENT OF OUR DEDICATED STAFF TO ACCOMPANY CUSTOMERS 25,000 PARTNERS SIDE-BY-SIDE WITH OUR CUSTOMERS EVERYDAY 56
Slide 57: New strategic plan Everyday: model evolving toward responsible digitized retailer
WITH OUR NEW STRATEGIC PLAN EVERYDAY, OUR MODEL IS EVOLVING TOWARDS A RESPONSIBLE DIGITIZED RETAILER DELIVERING HIGH-VALUE AND DURABLE SERVICES 2016 - 2018 2018 - 2020 > 2021 everyday au service de nos clients everyday companion of our customers POWERFUL BEST-IN-CLASS RESPONSIBLE DIGITIZED RETAILER
Slide 58: Financial objectives and outlook
Financial objectives and outlook 58
Slide 59: Assumptions for outlook
ASSUMPTIONS FOR OUTLOOK No further extensive periods of lockdown or temporary store closures No serious deterioration in the level of consumer confidence Supply chain remains largely intact 59
Slide 60: Key financial drivers for boosting our performance
KEY FINANCIAL DRIVERS FOR BOOSTING OUR PERFORMANCE Revenue growth mainly driven by increased online activity Significant contribution in gross margin of the subscription-driven service offering Cost-cutting program including the optimization of the store network Controlled capex level focused on str
Slide 61: Revenue growth mainly driven by increased online activity
REVENUE GROWTH MAINLY DRIVEN BY INCREASED ONLINE ACTIVITY Relying on an effective omnichannel model based on the best in-store and online experience Boosting our online revenue thanks to heavy investment in our online capacities in order to meet customer expectations and offer a pure player-like exp
Slide 62: Significant gross margin contribution of subscription-driven services
SIGNIFICANT CONTRIBUTION IN GROSS MARGIN OF THE SUBSCRIPTION-DRIVEN SERVICE OFFERING Capitalizing on and expanding our high margin service offering model by attracting new customers Generating recurring cash flows through a subscription services model, increasing the resilience of our business >2M s
Slide 63: Cost-cutting program including optimization of the store network
COST-CUTTING PROGRAM INCLUDING THE OPTIMIZATION OF THE STORE NETWORK Continuous reduction of our cost base in line with our Performance Plan 100% of our stores profitable1 by 2025 through optimization of our existing store network and further development of the franchise Investment in logistics to g
Slide 64: Controlled capex level focused on strategic initiatives
CONTROLLED CAPEX LEVEL FOCUSED ON STRATEGIC INITIATIVES c.€120m Total annual normative capex budget excluding major strategic initiatives by 2025 >50% of which is allocated to logistics and IT to support the strong growth of online activity Additional c.€40m to be invested over the period in new mod
Slide 65: Key financial drivers to generate recurring cash flows
KEY FINANCIAL DRIVERS TO GENERATE RECURRING CASH FLOWS Revenue growth mainly driven by increased online activity Significant contribution in gross margin of the subscription-driven service offering Cost-cutting program including the optimization of the store network Controlled capex level focused on
Slide 66: A step further in capital allocation ensuring sustainable shareholder returns
A STEP FURTHER IN CAPITAL ALLOCATION ENSURING SUSTAINABLE SHAREHOLDER RETURNS Fund profitable growth Increased Reinvest in the business Opportunity-driven decision Free Cash Flow Tactical bolt-on M&A Incremental + + shareholder return Leverage1 of max 2.0x Controlled net debt Shareholder retur
Slide 67: Outlook for 2021-2023
OUTLOOK FOR 2021-2023 Slight increase in revenues vs 2020 2021 Slight increase in current operating income vs 2020 Proposal for a dividend of €1/share for 20201 2021-2023 c.€500m of cumulative Free Cash Flow2 Target dividend of ≥ €1.5/share3 From 2021 Additional opportunistic shareholder return Leve
Slide 68: Fnac Darty profile in 2025
FNAC DARTY PROFILE IN 2025 >30% >2M 100% Online revenue penetration Subscribers to our unlimited repairs Stores profitable by 20251 by 2025 subscription program by 2025 c.€120m ≥ €240m Shareholder return Total annual normative capex budget Run rate Free Cash Flow3 in 2025 >30% mid-term payout ratio
Slide 69: Fnac Darty
Q8A | ) FNAC DARTY
Slide 70: Disclaimer
DISCLAIMER IMPORTANT NOTICE: By reading this presentation, you agree to be bound by the following limitations and qualifications: certain information included in this release is not based on historical facts but on forward-looking statements. Such forward looking statements speak only as of the date
Slide 71: Everyday
EVE RYDAY”