Ceconomy Ag · XETR:CEC
Ceconomy — Q3 2020/21 Earnings Presentation
36 slides from Ceconomy's earnings presentation, Aug 12, 2021
Slide 1: Results Presentation Q3/9M 2020/21
Results Presentation Q3/9M 2020/21 12 August 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: Overview, Financial Performance, Outlook
1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 OUTLOOK 3
Slide 4: Overview
1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 OUTLOOK 4
Slide 5: What I've seen so far – strengths
What I’ve seen so far – strengths 01 02 Highly motivated people Commitment to execute and team spirit to win our strategy 03 04 Passion for CE products Exciting growth and solutions opportunities 5
Slide 6: What I've seen so far – opportunities
What I’ve seen so far – opportunities Implement a more consistent, customer-centric shopping experience that’s “easy” and “effortless” Accelerate the omnichannel experience, connecting better online and in-store Establish leadership in category management Enhance capabilities in selling and
Slide 7: We have made visible progress…
We have made visible progress… Accelerate Growth Path Build a Unique Value Proposition …and will continue to relentlessly Create an Efficient execute this Organization and Structure strategy. 7
Slide 8: Stores: continuing to roll out new store formats
Stores: We are continuing to roll out new store formats to meet customers’ changing needs and increase market impact Key takeaways Lighthouse concept for inspiration with shop-in-shop and fantastic range Lighthouse store in Milan Smart store in Rome Planned opening of Lighthouse store in Rotterdam S
Slide 9: Logistics: We have reinforced our supply chain
Logistics: We have reinforced our supply chain Key takeaways Roll-out and enhancement of NDCs – preparing for go-live of NDC Göttingen Improved availability and direct supply capability Increased warehouse capacity for upcoming peak season Greater flexibility due to multi-sourcing approach Central N
Slide 10: Resilient 9M performance in a challenging COVID-19 year
Resilient 9M performance in a challenging COVID-19 year Key developments Key financials (€m) Sales Adj. EBIT2 Strong start into the new financial year, which was interrupted by store closures and severe restrictions in several countries due to COVID +8.0%1 -48 €m 4,107 4,407 Encouraging, sustain
Slide 11: Business impacted by COVID restrictions and store closures
Our business was impacted by COVID restrictions and store closures in almost all 9 months Monthly average of open stores (% of total stores) 100% 99% Click & 89% Meet1 76% 79% 69% 66% Click & Click & Meet1 Meet1 Click & 43% Meet1,2 96% 37% 62% 50% 44% Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Apr 21
Slide 12: Business remained resilient despite difficult COVID impact in Q3
Despite difficult COVID impact in Q3, our business remained resilient thanks to sustained execution and improving omnichannel capabilities Key achievements Core challenges Encouraging sales growth fuelled by high customer German and Dutch business impacted by long lockdown demand for consumer el
Slide 13: Financial Performance
1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 OUTLOOK 13
Slide 14: Sustained sales growth in countries less affected by COVID
Encouraging, sustained sales growth in countries less affected by COVID restrictions driven by continued strong customer demand for our CE offerings Total sales Sales1 in Q3 20/21 by segment (€m) (YOY change) +8.0%1 +7.3% 4,407 44.7% 4,107 23.3% 15.7% -4.0% Q3 19/20 Q3 20/21 DACH W. &. S. EUROPE E.
Slide 15: Online sales continued to grow
Online sales continued to grow on the back of the high level of the previous year, partly thanks to improving omnichannel capabilities Online sales (€m) Double-digit online growth in lockdown countries like Germany +3.3% and the Netherlands Average basket value at sustainable 1,446 1,494 high level
Slide 16: Online sales share remains high
Online sales share remains high and is expected to stay above pre-pandemic levels Online1 sales (as % of sales) 9M 20/21: 36.3% 9M 19/20: 21.6% 49.0% 35.2% 33.9% 30.3% 18.6% 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 20/21e 1Excl. MediaMarkt Greece business (portfo
Slide 17: Services & Solutions sales supported by B&M recovery
Services & Solutions sales supported by recovery of B&M sales and increasing online attach rate Services & Solutions sales (€m) +7.9% Double-digit Services & Solutions sales growth in non-restricted +17.8% adj.1 countries; Germany impacted by 243 lockdown and lower store traffic 225 Extended warrant
Slide 18: Gross margin roughly on prior year level
Gross margin roughly on prior year level but still below pre-pandemic levels Gross margin1 (as % of sales) Slightly lower online share in Q3 vs. PY led to small positive impact -0.2%p. from channel shift Product mix effects and promotional 16.1% 15.9% market environment put pressure on goods margin
Slide 19: OPEX development and normalization of cost base
OPEX development characterized by normalization of cost base after the end of COVID lockdowns and clear improvement in underlying operating cost performance OPEX1 (as % of sales) +1.1%p. Non-recurrence of last year’s -2.3%p. adj.2 COVID subsidies: about 180 €m in PY vs. about 40 €m in CY 22.5% 20.2%
Slide 20: Adjusted EBIT below PY
Adjusted EBIT below PY mainly driven by continued restrictions in the DACH region, pressure on goods margin, and normalization of cost base Adj. EBIT1 excl. associates (€m) Q3 19/20 Q3 20/21 Positive sales-related earnings impact 3 -3 Slightly negative margin contribution -7 -11 -11 (-0.2%p.): earni
Slide 21: Slight EPS improvement
Slight EPS improvement driven by better financial result and income taxes EBITDA to EPS (€m) Reported EBIT in PY impacted by non-recurring effects of -18 €m vs. Q3 19/20 Q3 20/21 Change -12 €m in CY EBITDA 154 74 -81 EBIT -64 -106 -41 Financial result mainly supported by Net financial result -13 9 2
Slide 22: Free Cash Flow on 9M basis below PY
Free Cash Flow on 9M basis around 400 €m below PY, mainly due to deliberately higher inventory to ensure stock availability in an environment of increasing supply shortages YOY change Free Cash Flow in 9M 20/21 (€m) -117 -220 -61 -36 18 -417 13 -404 649 PY included investment in Greek JV; Reversal o
Slide 23: Secured post-pandemic financing structure
CECONOMY has secured its post-pandemic financing structure with diverse financing sources and an extended maturity profile New post-pandemic financing structure (€m) Commercial Paper Programme Commercial Paper Programme: 500 For short-term funding New ESG-linked syndicated RCF: 2,060 1,060 New ESG-l
Slide 24: Outlook
1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 OUTLOOK 24
Slide 25: Current underlying trading assumptions for remainder of FY 20/21
Current underlying trading assumptions for the remainder of FY 20/21 Current trends and trading Underlying assumptions Current sales momentum significantly above pre- Stores remain open without new restrictions pandemic level, but below PY’s catch-up demand boost (underlying sales +9.8%1 YOY in
Slide 26: Outlook for FY 20/21
Outlook for FY 20/21 Slight to moderate increase Sales1 PY: 20,790 €m 210 €m – 250 €m Adj. EBIT2 PY: 236 €m 1Adj. for currency and portfolio change effects. 2Excl. associates, adj. for portfolio changes and excl. non-recurring effects in connection with (1) COVID-19-related store closures, (
Slide 27: My key takeaways
My key takeaways Our business showed resilience and we focused on executing our transformation strategy during the disruptive period of the pandemic Looking ahead, we are confident that our transformation continues to bear fruit and that business is continuing to recover after the pandemic The
Slide 28: Q&A
Q&A Dr Karsten Wildberger Florian Wieser 28
Slide 29: 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/ 29
Slide 30: Adj. EBIT to reported EBIT in Q3 20/21
Reported EBIT included non-recurring expenses of 12 €m; remainder of anticipated expenses likely to be incurred in Q4 20/21 and trailing in Q1 21/22 Adj. EBIT1 excl. associates to reported EBIT in Q3 20/21 (€m) Roughly equally split between • COVID-related store closures • Introduction of new Operat
Slide 31: Net Working Capital
Net Working Capital €m 30/09/2019 30/06/2020 Change 30/09/2020 30/06/2021 Change Inventories 2,548 2,780 232 2,949 3,439 489 Trade receivables and similar claims 455 467 12 488 320 -168 Receivables due from suppliers 1,295 970 -325 1,302 938 -364 Trade liabilities and similar liabilities -5,321 -4,5
Slide 32: Store network
Store network Openings/ Closures/ 31/03/2021 Additions Disposals 30/06/2021 Germany 419 – -3 416 Austria 53 – – 53 Switzerland 25 – – 25 Hungary 32 – – 32 DACH 529 – -3 526 Belgium 27 – – 27 1 store opening in Turkey Italy 117 – – 117 Luxembourg 2 – – 2 Netherlands 50 – -1 49 Portugal 10 – – 10 9 st
Slide 33: Extended, long-term maturity profile of financing structure
Extended, long-term maturity profile of new post-pandemic financing structure New post-pandemic financing structure (€m) New ESG-linked RCF Senior unsecured bond Promissory notes 500 50 7071 3531 189 12 2021 2022 2023 2024 2025 2026 2027 1With two one-year extension options. 33
Slide 34: Financial calendar
Financial calendar Q4/FY 2020/21 FY 2020/21 trading statement results 26 OCTOBER 2021 14 DECEMBER 2021 34
Slide 35: Upcoming events
Upcoming events Commerzbank Corporate Conference Sell-Side Analyst Group Meeting Berenberg and Goldman Sachs German Corporate Conference 2 SEPTEMBER 2021 7 SEPTEMBER 2021 22 SEPTEMBER 2021 Baader Investment Conference 23 SEPTEMBER 2021 35
Slide 36: CECONOMY
CECONOMY