Results Presentation Q1 2020/21
9 February 2021
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This presentation contains forecasts, statistics, data and other information relating to markets, market sizes, market shares, market positions and other industry data on the Company's business and markets (together the "market data") provided by third party sources as interpreted by us. This market data is, in part, derived from published research and additional market studies prepared primarily as a research tool and reflects estimates of market conditions based on research methodologies including primary research, secondary sources and econometric modelling. We want to point out that part of the market data used has been collected in the framework of a market survey carried out as a panel observation. The panel is a regular survey monitoring sales of specific products and product categories, using a range of distribution channels including internet, retail outlets (e.g. high street, mail order) and companies (e.g. resellers). The market data does not represent actual sales figures globally or in any given country; rather, the market data represents a statistical projection of sales in a given territory and is subject to the limitations of statistical error and adjustments at any time (e.g. reworks, changes in panel structure). The representativeness of the market data may be impacted by factors such as product categorization, channel distribution and supplier universe identification and statistical sampling and extrapolation methodologies. The market data presented is based on statistical methods and extrapolation.
In addition, market research data and trend information as interpreted or used by CECONOMY is based on certain estimates and assumptions and there can be no assurance that these estimates and assumptions as well as any interpretation of the relevant information by CECONOMY are accurate. The market research institutes which data CECONOMY used as basis for this presentation are neither registered broker dealers nor financial advisors and the permitted use of any market research data does not constitute financial advise or recommendations.
Historical financial information contained in this presentation is mostly based on or derived from the consolidated (interim) financial statements for the respective period. Financial information with respect to the business of MediaMarktSaturn Retail Group is particularly based on or derived from the segment reporting contained in these financial statements. The information contained in this presentation may comprise financial and similar information which is neither audited nor reviewed and should be considered preliminary and subject to change.
Such financial information is not necessarily indicative for the operational results, the financial position and/or the cash flow of the CECONOMY business on a stand-alone basis neither in the past nor in the future and may, in particular, deviate from any historical financial information based on corresponding combined financial statements with respect to the CECONOMY business. Given the aforementioned uncertainties, (prospective) investors are cautioned not to place undue reliance on any of this information. No representation or warranty is given and no liability is assumed by CECONOMY AG, express or implied, as to the accuracy, correctness or completeness of the information contained in this presentation.
This presentation contains certain supplemental financial or operative measures that are not calculated in accordance with IFRS and are therefore considered as non-IFRS measures. We believe that such non-IFRS measures used, when considered in conjunction with (but not in lieu of) other measures that are computed in accordance with IFRS, enhance the understanding of our business, results of operations, financial position or cash flows. There are, however, material limitations associated with the use of non-IFRS measures including (without limitation) the limitations inherent in the determination of relevant adjustments. The non-IFRS measures used by us may differ from, and not be comparable to, similarly-titled measures used by other companies. Detail information on this topic can be found in CECONOMY's Annual Report 2019/20, pages 28-30.
All numbers shown are as reported, unless otherwise stated. All amounts are stated in million euros (€ million) unless otherwise indicated. Amounts below €0.5 million are rounded and reported as 0. Rounding differences may occur.
In the document, the term "CECONOMY" will be used (for simplicity reasons) also in situations where the business of MediaMarktSaturn Retail Group is concerned.
Date: 15 Dec 2020 | // 2 |
// 2 | |
- HIGHLIGHTS
- FINANCIAL PERFORMANCE & OUTLOOK
// 3
- HIGHLIGHTS
- FINANCIAL PERFORMANCE & OUTLOOK
// 4
Excellent start into the new financial year 20/21 despite rising COVID-19-related challenges
Continued strong customer demand and high online dynamics supported by attractive marketing campaigns
We deliberately pulled forward Christmas demand to mitigate lockdown risks
Near-term trading subject to significantly increased uncertainties
// 5
We delivered again a successful peak season - key was the extension of the campaign period
+21% yoy | +8% yoy | +30% yoy |
Pre-Black Friday period1 | Black Friday period2 | Post-Black Friday period3 |
Note: Sales development adj. for currency & portfolio change effects.
1Pre-Black Friday period: 30/10/2020 - 22/11/2020. 2Black Friday period: 23/11/2020 - 30/11/2020. 3Post-Black Friday period: 01/12/2020 - 15/12/2020.
Date: 15 Dec 2020 | // 6 |
// 6 | |
Stationary business again affected by temporary store closures in many countries
Monthly average of open stores
(% of total stores)
89% | |||||||||||||
59% | 70% | 69% | |||||||||||
37% | 43% | ||||||||||||
14% | |||||||||||||
Jan 20 | Feb 20 | Mar 20 | Apr 20 | May 20 | Jun 20 | Jul 20 | Aug 20 | Sep 20 | Oct 20 | Nov 20 | Dec 20 | Jan 21 | Feb 211 |
Q2 19/20 | Q3 19/20 | Q4 19/20 | Q1 20/21 | Q2 20/21 |
1Month-to-date average.
Date: 15 Dec 2020 | // 7 |
// 7 |
Our omnichannel-model is a key advantage during the lockdown
- Webshop can partly compensate temporary closure of stationary business, but in- and outbound logistics impacted by lockdowns
- Pick-up remains available for customers in many cases
- Ship-from-storegives access to store inventory during lockdown
- In-storeservices such as repairs are still available in many stores
// 8
Strong sales and earnings development
despite increasing COVID-19-related B&M restrictions and local lockdowns
+11.4% | 346 €m |
Sales1 development | Adj. EBIT2 excl. associates |
1Adj. for currency & portfolio change effects. 2Adj. for portfolio changes and excl. non-recurring effects in connection with (1) COVID-19-related store closures, (2) the introduction of the new Operating Model and (3) transaction costs related to acquisition of minority shareholding in MediaMarktSaturn.
Date: 15 Dec 2020 | // 9 |
// 9 |
- HIGHLIGHTS
- FINANCIAL PERFORMANCE & OUTLOOK
// 10
Excellent sales growth in the peak period despite increasing COVID-19-related lockdowns, driven by successful campaigns and online business
Total sales | Sales1 by segment |
(in €m) | (yoy change) |
11.4%1 | |
9.4% | |
7,464 | 25.5% |
6,821 |
13.0% | |
9.1% | 10.7% |
Q1 19/20 | Q1 20/21 | DACH | W. &. S. EUROPE | E. EUROPE | OTHERS |
1Adj. for currency and portfolio change effects.
// 11
Online sales more than doubled in the first quarter, generating 30% of total sales
Online sales
(in €m)
+115.7%
2,259
1,048 | ||
15.4% | in % of sales | 30.3% |
Q1 19/20 | Q1 20/21 |
Online share reached even 35% in December as growing COVID-19 restrictions accelerate channel shift
Number of registered online customers increased by c. 3 million in Q1
Decline in pick-up rate to 32%, influenced by lockdowns and partial pick-up bans
// 12
Services & Solutions business impacted by COVID-19-related store closures and associated drop in customer footfall
Services & Solutions sales
(in €m)
-8.6%
-2.6% adj.1
375343
5.5% | in % of sales | 4.6% |
Q1 19/20 | Q1 20/21 |
1Excl. MediaMarkt Greece business (portfolio change) and excl. a technical effect due to switch from agent to principal model for online sales of mobile phones and related contracts as a bundle in Germany.
Sales growth in October cannot be continued due to rising COVID-19 restrictions
Continued strong demand for extended warranties
Financing and GSM mobile significantly below PY, mainly due to lower store frequency
// 13
Lower gross margin essentially driven by channel shift and logistics costs
Gross margin1
(in % of sales)
-1.4%p.
Accelerated channel shift coupled with product mix effects and
18.3%
17.0%
increased delivery costs
Partial pick-up bans additionally weighed on gross margin
Lower income contribution from Services & Solutions business due to decline in B&M traffic
Q1 19/20 | Q1 20/21 |
1Excl. non-recurring effects and adj. for portfolio changes.
// 14
Further progress in the optimization of the cost structure in addition to COVID-19 cost measures
OPEX1,2
(in % of sales)
18 €m
Absolute cost savings
-1.6%p.
14.8%
13.2%
Q1 19/20Q1 20/21
1Excl. non-recurring effects and adj. for portfolio changes.
2Sum of SG&A expenses and other operating expenses (excl. associates).
Lower personnel expenses driven by FTE reduction and higher cost efficiency
First savings from introduction of new Operating Model
COVID-19-related cost measures mainly related to short-time work
// 15
Strong EBIT increase due to strong sales performance and cost discipline
Adj. EBIT1 excl. associates
(in €m)
+56
346
289
Q1 19/20 | Q1 20/21 |
Adj. EBIT1 excl. associates by segment
(in €m)
Q1 19/20
Q1 20/21
247 259
50 | 74 | |||||
16 | ||||||
7 | ||||||
-15 | -3 | |||||
DACH | W. &. S. EUROPE | E. EUROPE | OTHERS |
1Excl. non-recurring effects and adj. for portfolio changes.
// 16
EPS slightly below prior year's level -
EBIT increase offset by lower financial result and higher taxes
EBITDA to EPS (in €m)
€m | Q1 19/20 | Q1 20/21 | Change |
EBITDA | 509 | 521 | 11 |
EBIT | 319 | 340 | 21 |
Net financial result | 9 | -10 | -19 |
Earnings before taxes | 327 | 330 | 3 |
Income taxes | -105 | -126 | -21 |
Tax rate | 32.0% | 38.1% | 6.0%p. |
Profit or loss for the period | 222 | 204 | -18 |
Non-controlling interest | 53 | 51 | -2 |
Net result | 170 | 153 | -17 |
EPS (in €) | 0.47 | 0.43 | -0.05 |
Note: From continuing operations and based on reported figures.
Transaction costs (6 €m) related to acquisition of MMS minority stake included in reported EBIT in CY
Net financial result affected among others by provision fee for syndicated loan and lower M.video dividend (-4 €m yoy)
Higher tax rate due to anticipated restructuring expenses; benefits related to acquisition of MMS minority stake not yet included
// 17
Adjusted Free Cash Flow slightly below PY due to lower NWC inflow, while tax refunds and lower investments were supportive
Free Cash Flow in Q1 20/21
(in €m)
Yoy change
+11 | -262 | +41 | +79 | +39 | -92 | +16 | -76 |
856 | 12 | 1,329 | |||||
Capital gains tax | -26 | ||||||
-35 | |||||||
refund | Other OCF in PY | 1,196 | |||||
PY included | |||||||
negatively | -133 | ||||||
521 | impacted by | investment in | |||||
reversal of non- | Greek JV; | ||||||
cash effect | investments for | ||||||
Lower increase | related to Greek | modernization | |||||
in trade liabilities | transaction | and expansion | |||||
(reflecting | slightly below PY | ||||||
temporary store | |||||||
closures from mid- | |||||||
Dec 2020 and high | |||||||
starting point on 30 | |||||||
Sep 2020) | |||||||
EBITDA | NWC | TAX | OTHER | CASH INVESTMENTS | FREE CASH FLOW | LEASE REPAYM. | LEASE ADJ. FCF 1 |
1Lease adjusted FCF subtracts the repayment of lease liabilities for better FCF comparability under IFRS 16.
// 18
Outlook for FY 20/21 subject to significantly increased uncertainties due to prolonged temporary store closures
Initial assumptions1
- No further extensive temporary closures of the stationary business
- No serious deterioration of consumer confidence
- Supply chains remain largely intact
1As communicated on 15 December 2020.
Knowns
- Q1 results are a major step to reach FY guidance
- In- and outbound logistics impacted
Unknowns
- Duration of the pandemic & associated length of temporary store closures
- Possible effects on consumer demand
Current outlook
- Near-termtrading remains challenging
- Uncertainty for the further business development and outlook in FY 20/21 has increased significantly
Date: 15 Dec 2020 | // 19 |
// 19 | |
Key take-aways
- Successful peak season and strong resilience against COVID-19 headwinds
- Uncertain environment characterized by challenging operating conditions
- Relentless focus on pursuit of our strategy and execution of our transformation
// 20
Q&A
Dr Bernhard Düttmann | Karin Sonnenmoser |
CEO | CFO |
Date: 15 Dec 2020 | // 21 |
// 21 | |
Contact
CECONOMY AG
Investor Relations
Kaistr. 3
40221 Düsseldorf
Germany
PHONE +(49) 211 5408-7222
EMAILIR@ceconomy.de
https://www.ceconomy.de/en/investor-relations/
// 22
Net Working Capital
€m | 30/09/2019 | 31/12/2019 | Change | 30/09/2020 | 31/12/2020 | Change |
Inventories | 2,548 | 3,348 | 801 | 2,949 | 3,668 | 719 |
Trade receivables and similar claims | 455 | 543 | 87 | 488 | 493 | 4 |
Receivables due from suppliers | 1,295 | 1,851 | 556 | 1,302 | 1,834 | 532 |
Trade liabilities and similar liabilities | -5,321 | -7,857 | -2,536 | -5,996 | -8,109 | -2,113 |
Net Working Capital | -1,023 | -2,115 | -1,092 | -1,256 | -2,114 | -858 |
// 23
Store network
30/09/2020 | Openings | Closures | 31/12/2020 | |
Germany | 425 | - | -5 | 420 |
Austria | 53 | - | - | 53 |
Switzerland | 25 | - | - | 25 |
Hungary | 32 | - | - | 32 |
DACH | 535 | - | -5 | 530 |
Belgium | 27 | - | - | 27 |
Italy | 117 | - | - | 117 |
Luxembourg | 2 | - | - | 2 |
Netherlands | 50 | - | - | 50 |
Portugal | 10 | - | - | 10 |
Spain | 88 | 1 | - | 89 |
Western/S. Europe | 294 | 1 | - | 295 |
Poland | 88 | - | - | 88 |
Turkey | 78 | 2 | - | 80 |
Eastern Europe | 166 | 2 | - | 168 |
Sweden | 28 | - | - | 28 |
Others | 28 | - | - | 28 |
CECONOMY | 1,023 | 3 | -5 | 1,021 |
3 store openings, thereof 1 store in Spain and 2 stores in Turkey
5 store closures in Germany
Average store size reduced by
-0.7% to 2,584 sqm at the end of December 2020 vs. September 2020
// 24
Status on COVID-19 lockdowns by country (as of 8 February 2021)
# stores as of | ||||
Germany | 31/12/2020 | Opened stores | Closed stores | |
420 | - | 420 | ||
Austria | 53 | 53 | - | |
Switzerland | 25 | - | 25 | |
Hungary | 32 | 32 | - | |
DACH | 530 | 85 | 445 | 52% of our stores are currently |
Belgium | 27 | 27 | - | |
opened | ||||
Italy | 117 | 1171 | - | |
Luxembourg | 2 | 2 | - | |
Netherlands | 50 | - | 50 | |
Portugal | 10 | 10 | - | 48% of our stores are still |
Spain | 89 | 89 | - | |
temporary closed | ||||
Western/S. Europe | 295 | 245 | 50 | |
Poland | 88 | 88 | - | |
Turkey | 80 | 802 | - | |
Eastern Europe | 168 | 168 | - | |
Sweden | 28 | 28 | - | |
Others | 28 | 28 | - | |
CECONOMY | 1,021 | 526 (52%) | 495 (48%) |
1Italy: Stores in shopping centres closed on weekends, holidays and pre-holidays (affecting 87 stores). 2Turkey: Stores closed on weekends.
// 25
Financial calendar
Annual General | Q2/H1 2020/21 | Q3/9M 2020/21 |
Meeting | results | results |
17 FEBRUARY 2021 | 11 MAY 2021 | 12 AUGUST 2021 |
Q4/FY 2020/21 | FY 2020/21 |
trading statement | results |
26 OCTOBER 2021 | 14 DECEMBER 2021 |
Date: 15 Dec 2020 | // 26 |
// 26 |
Upcoming events
Morgan Stanley | Baader Bank |
Virtual Roadshow post-Q1 | Virtual Roadshow post-Q1 |
11 FEBRUARY 2021 | 11 MARCH 2021 |
Date: 15 Dec 2020 | // 27 |
// 27 |
Date: 15 Dec 2020 | // 28 |
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CECONOMY AG published this content on 09 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 February 2021 06:04:08 UTC.