Slide 1: Results Q4/FY Presentation 2018/19
Results Q4/FY Presentation 2018/19 Dr Bernhard Düttmann Düsseldorf, 17 December 2019 Karin Sonnenmoser Ferran Reverter
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 Financial Operations Highlights Outlook Performance Update
Slide 4: Highlights
01 Highlights Date: 17 Dec 2019 // 4
Slide 5: We achieved all financial targets in FY 18/19
We achieved all financial targets in FY 18/19 with earnings even slightly ahead of expectations +0.8% 629 €m 402 €m 815 €m Slight increase Adj. EBITDA* Adj. EBIT* Change in NWC in fx-adjusted excl. Fnac Darty excl. Fnac Darty –310 €m sales on PY level +4 €m above PY lower than PY *Adjusted EBIT/DA e
Slide 6: Visible operational and structural progress in a year of transition
We delivered visible operational and structural progress in a year of transition Where we came from Achievements in FY 18/19 Declining Operations Profit stabilization profitability Completed sale of METRO Impairments and portfolio Portfolio stake, solution for Greece & losses weighed on results smal
Slide 7: Full focus on execution of four strategic initiatives
Our full focus is on the execution of our four strategic initiatives DIGITAL SERVICES & CATEGORY & ORGANIZATION & GROWTH SOLUTIONS SUPPLY CHAIN COST STRUCTURE MANAGEMENT ONGOING ONGOING GRADUAL PROGRESS SHORT TERM Results Presentation Q4/FY 2018/19 Public Date: 17 Dec 2019 // 7
Slide 8: We have accelerated our digital growth efforts
We have accelerated our digital growth efforts Consolidation of six different webshop platforms to one common IT platform Significantly improved webshop front-end in Germany and new app with improved user interface 3rd largest webshop in Germany, incl. MediaMarkt and Saturn Results Presentation Q4/F
Slide 9: We have improved our Services & Solutions offering
We have improved our Services & Solutions offering Harmonized service offering at SmartBars across all stores Increasing customer demand for screen protection, ready-to-use and repairs Tendered, refined & rolled out new insurances & warranties proposition in Germany Results Presentation Q4/FY 2018/1
Slide 10: Progress on centralization of Category and Supply Chain Management
Progress on the centralization of our Category and Supply Chain Management is also steadily building Roll-out of central pricing system in Germany Go-live of category management pilot store including new systems in Spain Ramp-up of central logistics platform in Germany and in the Netherlands Results
Slide 11: Program to reduce complexity and costs, primarily in Germany
We have launched a program to reduce complexity and costs, primarily in Germany Reorganization & Efficiency Program Completed staffing of central management team Central Functions Portfolio Streamlining of organizations at Target Status CECONOMY and MediaMarktSaturn Holding and Germany Timeframe 6 –
Slide 12: Financial Performance
02 Financial Performance Date: 17 Dec 2019 // 12
Slide 13: FY 18/19 financial performance in a nutshell
CECONOMY’s FY 18/19 financial performance in a nutshell Performance in the Netherlands and Poland Solid market share gains below expectations Improved steering of Black Friday period in 2018 Lower gross margin Expenses related to cost & efficiency program and Active management of operational costs,
Slide 14: Sales increase driven by Germany, Spain and Turkey
Sales increase mainly driven by solid development in Germany, Spain and Turkey Q4 Total sales (in €m) Sales by segment Q4 18/19 Q4 Highlights fx-adjusted (fx-adjusted, yoy change) +0.5% +0.9% DACH: Successful campaigns in Germany (e.g. MediaMarkt 40 years anniversary); Hungary 4,953 4,996 1.5% con
Slide 15: Online continued as growth driver; Services & Solutions picked up
Online continued to be the overall growth driver, while Services & Solutions growth has picked up again in Q4 Q4 Online sales (in €m) Services & Solutions sales* Q4 Highlights (in €m) +4.9% +1.2% Solid online growth due to higher number of visits and increase of average bon 605 635 396 401 12.2% 1
Slide 16: Strict cost discipline compensated lower gross margin
Strict cost discipline more than compensated lower gross margin Q4 Gross margin1 (in % of sales) OPEX1,2 (in % of sales) Q4 Highlights -0.6%p. -1.5%p. Gross margin with slight trend improvement in Q4 compared to 9M development 21.6% 21.0% 20.4% 18.9% OPEX reduction due to active operational cost
Slide 17: Gross margin impacted by non-recurring effects
The gross margin was impacted by non-recurring effects, especially in prior-year’s third quarter Q Gross margin (in % of sales) Excl. non-recurring effects: -0.8%p. Excl. restructuring- related effects: -0.6%p. -0.6%p. -0.5%p. -1.6%p. -0.7%p. 19.0% 18.4% 20.1% 19.5% 20.3% 18.7% 21.6% 21.0% Q1 17/18
Slide 18: EBIT increase driven by cost savings and Services & Solutions
EBIT increase driven by significant cost savings, higher income from Services & Solutions and positive sales development Q4 Adj. EBIT* excl. Fnac Darty (in €m) Q4 17/18 Q4 18/19 Q4 Highlights 148 153 DACH: Switzerland benefited from lower costs; 86 87 earnings in Germany exceeded recent 73 63 expe
Slide 19: Adjusted EBIT slightly above prior year
Adjusted EBIT slightly above prior-year’s level, while restructuring-related expenses weighed on reported earnings as expected Q4 EBIT excl. Fnac Darty (in €m) 148 153 5 -46 107 EBIT Q4 17/18 Yoy change Adj. EBIT Q4 18/19 Restructuring- EBIT Q4 18/19 related expenses* FY EBIT excl. Fnac Darty (in €m
Slide 20: Reorganization & Efficiency Program fully on track
The Reorganization & Efficiency Program is fully on track ˃ As of April 2019 ˃ Update December 2019 Annual gross Early realisation of c. 10 €m savings savings 100-120 110-130 100-120 110-130 (in €m) c. 20 0-10 Total P&L Expected positive expenses1 net effect c. 10 (in €m) -204-224 -200 Timing FY 18/
Slide 21: EPS impacted by restructuring-related expenses
EPS negatively impacted by restructuring-related expenses, while financial result and tax rate had a positive impact €m FY 17/18 FY 18/19 Change Highlights EBITDA 650 465 –186 Reported EBIT impacted by 200 €m restructuring-related expenses (o/w 14 €m not EBIT 419 224 –196 included in EBITDA mainly
Slide 22: Underlying tax rate shows continuous improvement
CECONOMY’s underlying* tax rate shows a continuous improvement, primarily supported by tax optimization projects Tax rate development Reported tax rate Highlights Underlying* tax rate 60.7% Structural tax optimization and one-time effects Reported tax rate from projects improved the underlying* ta
Slide 23: Free Cash Flow impacted by NWC outflow and restructuring
As expected, Free Cash Flow mainly impacted by NWC outflow and first restructuring-related cash outflows FY 18/19: Free Cash Flow (in €m) Highlights 465 Free Cash Flow at –107 €m; negatively impacted by expected normalization of NWC 84 86 and first restructuring-related cash outflows -310 -152 L
Slide 24: Outlook
03 Outlook Date: 17 Dec 2019 // 24
Slide 25: Our underlying assumptions for FY 19/20
Our underlying assumptions for FY 19/20 Sales Driven mainly by Online and Services & Solutions business Gross margin Pressure on goods margin still to continue, but overall gross margin trend improvement expected due to further ramp-up of Services & Solutions business Costs Strong cost decline, espe
Slide 26: Outlook for FY 19/20
Outlook for FY 19/20 Adjusted for portfolio changes Excluding non-recurring earnings effects in connection with the reorganization and efficiency program announced on 29 April 2019 FY 19/20 thereof IFRS 16 incl. IFRS 16 effect Fx-adjusted sales Slight increase EBIT (excl. associates) 445 – 475 €
Slide 27: Operations Update
04 Operations Update Date: 17 Dec 2019 // 27
Slide 28: In 2018/19 we prepared for sustainable success
In 2018/19 we prepared for sustainable success 1 Leadership team established and new critical competencies on-boarded 2 Leaner organization and a more competitive cost structure, especially in Germany 3 Faster decision-making processes due to clearer responsibilities 4 Clear focus on consistently tr
Slide 29: 2019/20: Ongoing implementation of strategic initiatives
2019/20: Ongoing implementation of the strategic initiatives CUSTOMER-CENTRIC OMNI-CHANNEL BUSINESS MODEL DIGITAL SERVICES & CATEGORY & ORGANIZATION & GROWTH SOLUTIONS SUPPLY CHAIN COST STRUCTURE MANAGEMENT Improve online/omni-channel Reduce overall costs, Improve attachment rates, Deploy Category M
Slide 30: Digital Growth: ongoing platform improvements
Digital Growth: Ongoing improvements of our platforms enabling a better omni-channel customer journey State of the art platform for faster responsiveness and New webshop improved customer experience; go-live in Germany in platform November ’19 and roll-out in other countries to follow Digitizing our
Slide 31: Services & Solutions: best-in-class attachment rates
Services & Solutions: Focus on achieving best-in-class attachment rates in all countries Insurances & Further ramp-up and roll-out of standardized customer Warranties proposition to strengthen customer relationships Group-wide full utilization of SmartBars potential with SmartBars harmonized offerin
Slide 32: Centralization of procurement volumes on track
Centralization of procurement volumes on track; pricing and category management with gradual progress Ramp-up of central negotiated purchasing in 2019 in Germany Current focus (in % of purchasing volume) 100% Ramp-up of centrally negotiated procurement volume in Germany, Spain, Italy and the Nethe
Slide 33: Logistics will build on centralization and national distribution centres
Logistics will build on centralization and national distribution centres Transforming our supply chain into Central platform established Percentage of supply replenished via centralized an omni-channel logistics network … distribution (non-2MH) Central platform pilot ES Central platform planned … ba
Slide 34: Profitable Black Friday built again
We continued the success of last year and built again a profitable Black Friday – centralization was key Centrally elaborated campaign concepts for entire group supported by professional toolkit Actively steered pre- and post-campaign period (e.g. Singles Day, Red Friday Warm-up) First joint interna
Slide 35: Summary
Summary FOCUS EXECUTE FIXING TRANSFORMING THE BASICS THE BUSINESS Laying the Changing into a foundation for a customer-centric sustainable future business model We focus on our omni-channel business model and want to be customers’ first choice Results Presentation Q4/FY 2018/19 Public Date: 17 Dec 2
Slide 36: Strategy Update
STRATEGY UPDATE SAVE THE DATE: 26 MARCH 2020
Slide 37: 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 Q4/FY 2018/19 Public Date: 17 Dec 2019 // 37
Slide 38: Contact
CECONOMY AG Investor Relations Kaistrasse 3 CONTACT 40221 Düsseldorf Germany Tel.: +49 (211) 5408-7222 Email: IR@ceconomy.de https://www.ceconomy.de/en/investor-relations/ Date: 17 Dec 2019 // 38
Slide 39: Store network as of 30 September 2019
Store network as of 30 September 2019 30/06/2019 Openings Closures 30/09/2019 Highlights Q4 Germany 431 1 –1 431 Austria 52 – – 52 Selective expansion with 7 openings continued Switzerland 26 – – 26 (thereof 5 in Turkey) Hungary 32 – – 32 DACH 541 1 –1 541 Belgium 28 – –1 27 2 store closures in
Slide 40: Sales & number of stores by country
Sales & number of stores by country Sales (€m) Number of Stores FY 17/18 FY 18/19 30/09/2018 Openings Closures 30/09/2019 Germany 10,340 10,472 432 2 –3 431 Austria 1,161 1,150 52 – – 52 Switzerland 569 578 27 – –1 26 Hungary 340 364 24 8 – 32 DACH 12,410 12,565 535 10 –4 541 Belgium 701 697 29 – –2
Slide 41: Underlying tax rate improved to 31.7%
CECONOMY’s underlying tax rate improved to 31.7% driven by further tax optimization Transition of reported to underlying tax rate (FY 18/19) Highlights Reported 235 32.7% 77 Underlying tax-rate excl. METRO, Fnac Darty METRO & and restructuring-related* effects improved to 53 2 Fnac Darty 31.7% vs
Slide 42: Net Working Capital
Net Working Capital €m 30/09/20171 30/09/2018 Change 30/09/2018 30/09/20192 Change Inventories 2,449 2,480 31 2,480 2,548 68 3 Trade receivables and similar claims 497 613 117 613 417 –197 Receivables due from suppliers 1,197 1,239 43 1,239 1,295 56 Receivables from credit cards 66 71 5 71 51 –20 Ad
Slide 43: New simplified NWC definition
New simplified NWC definition as of Q1 2019/20 with all items easily readable from balance sheet positions Old NWC definition New NWC definition Inventories Inventories Receivables due from suppliers Receivables due from suppliers Assets Trade receivables and similar claims Trade receivables and sim
Slide 44: Comparison of new vs old NWC definitions
Comparison of new vs old NWC definitions €m 30/09/2018 30/09/2019 Inventories 2,480 2,548 NWC becomes easily readable Trade receivables and similar claims 613 417 from balance sheet positions Receivables due from suppliers 1,239 1,295 Receivables from credit cards 71 51 Advance payments on invento
Slide 45: IFRS 16 estimated P&L impact in FY 19/20
IFRS 16 applied as of 1 October 2019 - estimated P&L impact in FY 19/20 ESTIMATED EFFECT 1 Leasing expenses Decrease by 525-565 €m as leasing expenses are recognized as D&A and interest cost EBITDA Increase by 525-565 €m equalling the amount of leasing expenses D&A Increase by 515-555 €m due to depr
Slide 46: IFRS 16 estimated balance sheet and cash flow impact
IFRS 16 applied as of 1 October 2019 - estimated balance sheet and cash flow impact in FY 19/20 ESTIMATED EFFECT 1 Assets Increase by around 2.3 €bn2 due to recognition of lease contracts as rights of use assets Liabilities Increase by around 2.4 €bn2 due to recognition of lease contracts as lease l
Slide 47: Key considerations for financial modelling
Key considerations for financial modelling Greece transaction Net Working Capital Closing of the transaction occurred on 29 November 2019 New NWC definition with four positions easily readable As of December 2019, sales and EBIT of Greece are not consolidated anymore from balance sheet: No d
Slide 48: Financial calendar and events
Financial calendar and events Financial calendar Q1 2019/20 results 7 February 2020 Annual General Meeting 12 February 2020 Capital Markets Day 26 March 2020 Q2/H1 2019/20 results 14 May 2020 Q3/9M 2019/20 results 13 August 2020 Q4/FY 2019/20 trading statement 23 October 2020 FY 2019/20 results 15 D
Slide 49: Date: 17 Dec 2019
Date: 17 Dec 2019 // 49