Ceconomy Ag · XETR:CEC
Ceconomy — FY2020/21 Earnings Presentation
50 slides from Ceconomy's earnings presentation, Dec 14, 2021
Slide 1: Results Presentation Q4/12M 2020/21
Results Presentation Q4/12M 2020/21 14 December 2021
Slide 2: Disclaimer and Notes
Disclaimer and Notes This disclaimer shall apply in all respects to the entire presentation (including registered broker-dealers nor financial advisors and the permitted use of any particular, deviate from any historical financial information based on all slides of this document), the oral presentat
Slide 3: Agenda
1 REVIEW FY 20/21 2 FINANCIAL PERFORMANCE 3 FINANCIAL OUTLOOK 4 MOVING FORWARD 3
Slide 4: Sales increase and stable EBIT in FY 20/21 – the year of the pandemic
Sales increase and stable EBIT in FY 20/21 – the year of the pandemic 01 02 Omnichannel model and Sales1 exceed prior year and pre- customer relevance lay pandemic levels; EBIT growth in foundations for further growth majority of countries 03 04 Record growth in online Post-pandemic financing and bu
Slide 5: We ended FY 20/21 with solid results and achieved our guidance
We ended FY 20/21 with solid results and achieved our guidance Guidance as of August 2021 FY 20/21 Slight to moderate increase +3.8% Sales1 PY2: 20,790 €m to 21,361 €m ✓ Adj. ✓ 210 €m – 250 €m 237 €m EBIT3 PY: 236 €m 1Adj. for currency and portfolio change effects. 2Excl. MediaMarkt Greece business
Slide 6: What I've seen so far – 100 days in 5 statements
What I’ve seen so far – 100 days in 5 statements We operate in volatile, challenging external conditions – masking underlying progress High-performing teams and a resilient business model keep us growing despite COVID-19 restrictions We manage short-term market challenges and execute our omnic
Slide 7: Very good position to accelerate our omnichannel strategy
Very good position to accelerate our omnichannel strategy 2nd largest consumer electronics webshop in Customer touchpoints per Europe1 ~7 €bn 2.5 bn year across all channels (online sales) 3rd largest webshop overall in Germany2 14 million online orders were #1 and #2 picked up in our stores, 38% 8
Slide 8: How we are re-inventing ourselves
How we are re-inventing ourselves From To Achievements NPS improvement Transaction Experience Services & Solutions as key differentiator Organizational re-design implemented, Decentral Smart central and cost targets overachieved Logistics optimization 65% online growth in FY 20/21 Bricks & Mortar Om
Slide 9: From transaction to experience – Stronger focus on customer centricity
From transaction to experience – Stronger focus on customer centricity ” Doubling down We’ll further NPS +5 points on service and expert advice (from 42 to now 47) – along the entire customer accelerate the journey implementation of our omnichannel Integrating Deepen service strategy and focus onlin
Slide 10: From bricks & mortar to omnichannel – Online business
From bricks & mortar to omnichannel – Online business Online growth to almost 7 €bn sales with >30% sales share Online profitability increased - higher online service growth (+18%) Nearly 40% of online orders picked up in- store, creating cross-selling opportunities “Delivery promise” signif
Slide 11: From bricks & mortar to omnichannel – Lighthouse stores
From bricks & mortar to omnichannel – Lighthouse stores Set new standard in experience and inspiration and commercially very successful Increase frequency, conversion rate and checkout value and thus profitability Great partner and supplier engagement with 20-30 suppliers shop-in-shop concept
Slide 12: From fixing to creating – Marketplace
From fixing to creating – Marketplace Marketplace running in Germany and Spain Wide range of assortment (> 400 sellers offer ~ 300k SKUs) complemented by new categories Very encouraging GMV1 growth and attractive margin contribution, as proof of FY 19/20: 0.9 €m concept already in the 1st year
Slide 13: Sustainability is an integral part of our strategy
Sustainability is an integral part of our strategy Our two sustainability pillars Strengthen the sustainability Enable a sustainable of our operations lifestyle for our customers Exemplary focus topics Exemplary focus topics Reduction of Reduction of Sustainable products Customer guidance carbon emi
Slide 14: Agenda – Financial Performance
1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 FINANCIAL OUTLOOK 4 MOVING FORWARD 14
Slide 15: We grew sales and delivered a stable EBIT despite severe external headwinds
We grew sales and delivered a stable EBIT despite severe external headwinds Sales Adj. EBIT2 (€m) (€m) -1.0%1 +8 €m Solid Q4 20/21 sales development despite high comparison base from prior year’s catch-up demand boost 5,271 5,168 123 131 Q4 FY 20/21 sales above pre-pandemic levels thanks to strong o
Slide 16: We implemented our new Operating Model well ahead of schedule
We implemented our new Operating Model well ahead of schedule We have achieved our savings target of “slightly 2/3 of planned store closures concluded in FY 20/21 more than 100 €m” ahead of schedule and continue to optimise HQ structures and store Selected selling space reductions to improve operati
Slide 17: Strong online growth due to channel shift and enhanced capabilities
Strong online growth due to channel shift and enhanced capabilities Online sales (€m) +24.7% +64.9% Q4 FY 6,932 1,060 4,203 850 16.1% as % of sales 20.5% 20.2% as % of sales 32.5% Q4 19/20 Q4 20/21 FY 19/20 FY 20/21 Online sales share at sustainably elevated levels Around 8 million new registered on
Slide 18: Online sales spiked during lockdowns & remained elevated after stores reopened
Online sales spiked during lockdowns & remained elevated after stores reopened Online sales (as % of sales) FY 20/21: 32.5% FY 19/20: 20.2% 49.0% 35.2% 33.9% 30.3% 18.6% 20.5% 15.4% 16.1% Q1 19/20 Q2 19/20 Q3 19/20 Q4 19/20 Q1 20/21 Q2 20/21 Q3 20/21 Q4 20/21 18
Slide 19: Services & Solutions affected by temporary store closures, but greatly recovered
Services & Solutions affected by temporary store closures, but greatly recovered thereafter Services & Solutions sales (€m) +27.0% -2.4% Q4 FY 1,129 1,102 318 250 4.7% as % of sales 6.1% 5.4% as % of sales 5.2% Q4 19/20 Q4 20/21 FY 19/20 FY 20/21 Improved web functionalities led to rising online att
Slide 20: Stable Q4 gross margin through active stock management and Services & Solutions
Stable Q4 gross margin through active stock management and Services & Solutions contribution Gross margin1 (as % of sales) Q4 Higher online share reflected in -0.1%p. channel shift and logistic cost impact 20.3% 20.2% More competitive environment and mix effects weighted on goods margin Support from
Slide 21: Resolute adaption of our cost base in line with progressing omnichannel model
Resolute adaption of our cost base in line with progressing omnichannel model OPEX1 (as % of sales) Q4 -0.2%p. -0.5%p. adj.2 COVID-19 subsidies 19.1% Non-recurrence of last year’s COVID-19 subsidies: about 20 €m in PY vs. about 4 €m in CY 18.7% COVID-19 18.6% subsidies 18.6% Underlying improvement I
Slide 22: Solid Q4 performance in countries less affected by COVID-19
Solid Q4 performance in countries less affected by COVID-19 DACH EASTERN EUROPE €m / % Q4 20/21 €m / % Q4 20/21 DACH influenced by high comparison Total sales 2,924 Total sales 453 base and lower performance mainly Growth in LC1 -3.3% Growth in LC1 11.7% in Germany and Austria Reported YOY change -3
Slide 23: Significant EPS improvement driven by Fnac Darty impairment reversal
Significant EPS improvement driven by Fnac Darty impairment reversal and reduced tax expenses EBITDA to EPS (€m) Q4 FY Q4 19/20 Q4 20/21 FY 19/20 FY 20/21 EBITDA 225 299 991 948 Reported EBIT benefitted from Fnac EBIT 33 94 -80 326 Darty impairment reversal (150 €m) Net financial result -17 -34 -45
Slide 24: Free Cash Flow below PY due to change in Net Working Capital
Free Cash Flow below PY due to change in Net Working Capital YOY change Free Cash Flow in FY 20/21 (€m) -43 -668 -120 97 -33 -767 27 -740 948 Reversal of PY‘s COVID-19-related investments for tax deferrals and modernization reductions and expansion -354 High basis at the end -104 -41 of FY 19/20 and
Slide 25: Balance sheet strengthened, financing secured, cash flow measures initiated
Balance sheet strengthened, financing secured, cash flow measures initiated 1 Balance sheet strengthened, sufficient liquidity in 2 Cash flow measures initiated and operational extraordinary times available and post-pandemic flexibility increased financing secured Tight sustained cost management
Slide 26: Agenda – Financial Outlook
1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 FINANCIAL OUTLOOK 4 MOVING FORWARD 26
Slide 27: Outlook for FY 21/22
Outlook for FY 21/22 FY 20/21 FY 21/22 Key Assumptions Influence of the COVID-19 Sales1 21,361 €m Slight pandemic less harmful as in FY 20/21 (e.g. fewer and increase shorter closure of stores) Inflation and availability of goods expected to normalize over the course of the year Further driver
Slide 28: Volatile sales due to COVID-19, complex quarterly comparison
Volatile sales due to COVID-19, complex quarterly comparison Sales growth1 (in % vs. 18/19) 20 FY 19/20: -1.8% FY 20/21: +1.6% (vs. 18/19) Volatile sales development since 10 Q2 19/20 as a consequence of lockdowns and catch-up demand boosts 0 Guidance for FY 21/22 shows significantly lower compariso
Slide 29: Agenda – Moving Forward
1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 FINANCIAL OUTLOOK 4 MOVING FORWARD 29
Slide 30: Mastering short-term challenges
Mastering short-term challenges COVID-19 Supply chain Organization is COVID-19 field-tested Many industries, including CE, are facing disrupted supply chains, production and logistics Longer-term view of industry and growth opportunities remains positive We’re taking measures to mitigate supply shor
Slide 31: Update on Black Friday and peak season
Update on Black Friday and peak season Weekly changing promotions under a single Black Friday roof campaign Early replenishment in response to supply chain situation Customer demand and frequency below exceptional Q1 20/21 Oct and Nov sales better than pre-pandemic 19/20; despite lower store
Slide 32: Capitalizing on our assets
Capitalizing on our assets Our customer reach Our people Our brands Our omnichannel approach Our service offering Our partnerships 32
Slide 33: In a nutshell
In a nutshell Consumer Electronic fundamentals remain attractive Europe's largest CE retailer with strong brands and leading position in eight countries Proven resilience during challenging times; post- pandemic financing and liquidity secured Simplified organizational structure implemented
Slide 34: Q&A
Q&A Dr Karsten Wildberger Florian Wieser 34
Slide 35: #ChristmasMadeForMe
GET YOUR CHRISTMAS PRESENTS #ChristmasMadeForMe AT MEDIA MARKT OR SATURN 35
Slide 36: Financial calendar H1 2022
Financial calendar H1 2022 Q1 21/22 Annual General Meeting Extraordinary General Meeting results 7 FEBRUARY 2022 9 FEBRUARY 2022 12 APRIL 2022 Q2/H1 21/22 results 13 MAY 2022 36
Slide 37: Upcoming events Q2 21/22
Upcoming events Q2 21/22 Bank of America SMID Cap / CFO 21st German Corporate Conference / Jefferies Pan-European Mid-Cap / CEO CEO 11 JANUARY 2022 19 JANUARY 2022 31 MARCH 2022 37
Slide 38: Contact
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/ 38
Slide 39: Appendix
APPENDIX Ceconomy 13.12.2021 39
Slide 40: Envisaged timeline of the transaction with Convergenta Invest GmbH
Envisaged timeline of the transaction with Convergenta Invest GmbH 9 February 2022 Late February 2022 12 April 2022 Q3/Q4 2021/22 Annual General Meeting Convocation of Extraordinary General Closing extraordinary General Meeting Meeting Capital increase and convertible Earliest end of May 2022 – Divi
Slide 41: Our set of KPIs to track our progress
KPI KPI KPI Our set of KPIs to track Marketplace Sales uplift B2B our progress GMV new categories sales share Accelerate Growth Path Create an Efficient Organization Build a Unique Value Proposition & Structure 29 €m AMBITION FY 20/21 TREND AMBITION TREND AMBITION TREND FY 22/23 FY 20/21 YOY FY 22/2
Slide 42: Our set of KPIs to track our progress
KPI KPI KPI Our set of KPIs to track Availability Share of central Loyalty our progress Top 300 inbound members Accelerate Growth Path Create an Efficient Organization Build a Unique Value Proposition & Structure 76% 29m AMBITION FY 20/21 TREND AMBITION TREND AMBITION FY 20/21 TREND FY 22/23 FY 20/2
Slide 43: Strong sales growth in all segments except DACH
Strong sales growth in all segments except DACH, profitability still below pre- pandemic levels DACH EASTERN EUROPE €m / % FY 20/21 €m / % FY 20/21 Total sales 12,003 Total sales 1,781 Growth in LC1 -2.4% Growth in LC1 26.2% Reported YOY change -2.6% Reported YOY change 10.6% Adj. EBIT2 184 Adj. EBI
Slide 44: Reported EBIT included non-recurring expenses of 13 €m
Reported EBIT included non-recurring expenses of 13 €m; remainder of anticipated expenses likely to be incurred in FY 21/22 Adj. EBIT1 excl. associates to reported EBIT in Q4 20/21 (€m) 131 -13 -24 Mainly related to the 94 introduction of our new Operating Model Mainly impairment of the Greek Joint
Slide 45: Reported EBIT included non-recurring expenses of 64 €m
Reported EBIT included non-recurring expenses of 64 €m; strong improvement driven by Fnac Darty reversal of impairment Adj. EBIT1 excl. associates to reported EBIT in FY 20/21 (€m) 326 237 154 -64 • COVID-19-related • Fnac Darty store closures impairment reversal • Introduction of new • Impairment o
Slide 46: OPEX margin development FY illustrated sustained improvement
OPEX margin development FY illustrated the sustained improvement in operating cost structure OPEX1 (as % of sales) -0.8%p. Non-recurrence of last year’s -1.1%p. adj.2 COVID-19 subsidies: about 227 €m COVID-19 in PY vs. about 174 €m in CY subsidies 18.9% COVID-19 17.8% 17.8% subsidies Sustained opera
Slide 47: Net Working Capital
Net Working Capital €m 30/09/2019 30/09/2020 Change 30/09/2020 30/09/2021 Change Inventories 2,548 2,949 402 2,949 3,111 162 Trade receivables and similar claims 455 488 33 488 361 -127 Receivables due from suppliers 1,295 1,302 7 1,302 1,142 -160 Trade liabilities and similar liabilities -5,321 -5,
Slide 48: Continued demand for new media products, gaming consoles could not offset decline
Continued demand for new media products, high demand for gaming consoles could not offset decline in white goods and entertainment FY 20/21 Product category breakdown (in % of total product sales) YOY change Others2 3% (-0.3%) Brown Goods New media category and Telecom 20% recorded growth mainly dri
Slide 49: Sales and store network
Sales and store network Sales (€m) Number of Stores Openings/ Closures/ FY 19/20 FY 20/21 30/09/2020 Additions Disposals 30/09/2021 Germany 10,155 9,735 425 – -20 405 Austria 1,203 1,279 53 – -1 52 Switzerland 591 591 25 – – 25 Hungary 375 398 32 – – 32 DACH 12,323 12,003 535 – -21 514 Belgium 698 7
Slide 50: CECONOMY
CECONOMY