CECONOMY On-Site Event

Transcription

1 CECONOMY On-Site Event Ingolstadt, 08 June 2017 // 1

2 DISCLAIMER AND NOTES BY ACCESSING THIS PRESENTATION YOU AGREE TO THE FOLLOWING RESTRICTIONS This document and the presentation to which is relates is intended for information only, does not constitute a prospectus or similar document and should not be treated as investment advice. It is not intended and should not be construed as an offer for sale, or as a solicitation of an offer to purchase or subscribe to, any securities in any jurisdiction. Neither this presentation nor anything contained therein shall form the basis of, or be relied upon in connection with, any commitment or contract whatsoever. This presentation may not, at any time, be reproduced, distributed or published (in whole or in part) without prior written consent of CECONOMY AG ( CECONOMY ). Historical financial or operative information contained in this presentation, if not taken or derived from our accounting records or our management reporting or unless otherwise stated, is taken or derived from the unaudited combined financial statements of CECONOMY for the financial years ended September 30, 2016, 2015 and 2014 and not from the consolidated financial statements of the METRO Group, and from the interim consolidated financial statements of METRO Group for the three-month periods ended March 31, 2017 and December 31, The combined financial statements of CECONOMY have not been audited and may also deviate substantially from (segmental or other) information in the consolidated financial statements of the METRO Group and, thus, may not be fully comparable to such financial statements. In addition, the historical financial and operative information included in this presentation does not necessarily fully reflect changes that will occur when we, the prospective CECONOMY business, operate as a separate company. Accordingly, such information is not necessarily indicative for the future consolidated results of operations, financial position or cash flows of the prospective CECONOMY business on a stand-alone basis. All numbers shown are before special items, 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. 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. To the extent that statements in this presentation do not relate to historical or current facts they constitute forward-looking statements. All forward-looking statements herein are based on certain estimates, expectations and assumptions at the time of publication of this presentation and there can be no assurance that these estimates, expectations and assumptions are or will prove to be accurate. Furthermore, the forward-looking statements are subject to risks and uncertainties including (without limitation) future market and economic conditions, the behaviour of other market participants, investments in innovative sales formats, expansion in online and multichannel sales activities, integration of acquired businesses and achievement of anticipated cost savings and productivity gains, and the actions of public authorities and other third parties, many of which are beyond our control, that could cause actual results, performance or financial position to differ materially from any future results, performance or financial position expressed or implied in this presentation. Accordingly, no representation or warranty (express or implied) is given that such forward-looking statements, including the underlying estimates, expectations and assumptions, are correct or complete. Readers are cautioned not to place reliance on these statements. We do not undertake any obligation to publicly update any forward-looking statements or to conform them to events or circumstances after the date of this presentation.. // 2

3 Disclaimer and Notes (cont d) 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. CECONOMY operates, in part, in industries and channels for which it is difficult to obtain precise market data. Such market data should therefore be considered with caution and not be solely relied on as market studies are often based on information and assumptions that may be inaccurate or inappropriate, and their methodology is inherently predictive and speculative. We have no reason to believe that such information is false or misleading or that any material fact has been omitted that would render such information false or misleading. Our own estimates have not been checked or verified externally. They may differ from estimates made by competitors of our group or from future studies conducted by market research institutes or other independent sources. Information prepared by third parties has not been independently verified by us or any other party. Therefore you acknowledge that the market data presented is based on statistical methods and extrapolation and so due to the nature of such data no guarantee for completeness and accuracy can be given by us or any third party. Neither we nor any third party, including those third parties whose data is cited in this presentation, warrant that the data collected, processed and analyzed by it in accordance with the rules and methods of market and social research, will be able to be used by in a specific way, in particular not in the legal sense of an expert report. It should be noted that all liability for completeness and correctness of the information provided by us or any third party is explicitly excluded. Under no circumstance shall a third party whose data is cited in this presentation be liable for damages incurred through or in connection with your or our interpretation of the provided information. Neither we nor any third party shall be responsible for any loss or damage arising out of your or our use or reliance upon the information contained herein, or for actions of and decisions taken by us, you or any third parties that receive this information. Neither we nor any third party give any representations as to the accuracy of the market data included in this presentation. The third parties whose data is cited in this presentation are neither registered broker-dealers nor financial advisors and the permitted use of any market research data does not constitute financial advice or recommendations. Any information on the intended demerger only reflects the current status and targeted measures / structure, all of which may be subject to changes in the course of the future process. // 3

4 Contents // Demerger rationale & timing // Q2 2016/17 update // Strategic update // Introduction to store visits // 4

5 // Demerger rationale & timing // 5

6 Rationale for creating a pure Consumer Electronics platform INDEPENDENCE ALL FREE CASH FLOW INVESTED IN CECONOMY FOCUS FULL MANAGEMENT FOCUS ON CREATING VALUE FOR CECONOMY SIMPLICITY FULL TRANSPARENCY AND VISIBILITY // 6

7 CECONOMY is ready for independence, having completed a significant part of the change process in Consumer Electronics RATIONALISATION DIGITALISATION CONSOLIDATION TRANSFORMATION // 7

8 // Q2 2016/17 update // 8

9 Q2 summary POSITIVE SALES TREND GROWTH DRIVEN ESPECIALLY BY STRONG ONLINE SALES EBIT LOWER DUE TO INVESTMENTS TO FURTHER STRENGTHEN MARKET POSITION CECONOMY GUIDANCE: SALES AND EBIT HIGHER THAN PY // 9

10 Q2 2016/17 Update Total and lfl sales growth Total Sales Development (in %, excl. redcoon) 3.4% 3.1% _Slightly higher total and lfl sales in Q2 16/16 (total: +0.7, lfl: +0.5%, both excl. redcoon) _Strong growth especially in Germany and Turkey 0.7% 0.7% _Negative developments in mainly Italy and Russia -0.1% Q2 15/16 Q3 15/16 Q4 15/16 Q1 16/17 Q2 16/17 _Market share gains in 10 out of 15 countries (excl. redcoon) Lfl Sales Development (in %, excl. redcoon) 2.2% 2.8% _Further rise in total market share to new all-time high over the past 6 months 0.2% 0.5% -1.1% POSITIVE SALES TREND Q2 15/16 Q3 15/16 Q4 15/16 Q1 16/17 Q2 16/17 // 10

11 Q2 2016/17 Update Online and services & solutions Online Generated Sales (in million & total sales share) 10.5% 9.1% 9.3% 9.3% % 611 _Unbroken strong sales momentum of the online business _Online sales of MediaMarkt and Saturn grew more than 40% helped by seamless pick-up option _Online share approaching 12% of total sales Q2 15/16 Q3 15/16 Q4 15/16 Q1 16/17 Q2 16/17 _Services & solutions sales increased by 4% yoy excl. RTS Services & Solutions Sales (in million & total sales share) 6.4% 6.8% 5.6% 5.2% 5.0% Q2 15/16* Q3 15/16 Q4 15/16 Q1 16/17 Q2 16/17* * Excluding RTS due to first-time consolidation in Q2 15/16 _Service smart bars already implemented in 510 stores UNDERLINES COMPELLING MULTI-CHANNEL AND SERVICES & SOLUTIONS OFFER // 11

12 Q2 2016/17 Update EBIT & EBITDA EBIT before special items (Delta vs. PY, in million) _EBIT negatively impacted by _high comparison base _measures to further strengthen market position _one-time negative impact in the Netherlands FY 15/16 Q1 16/17 Q2 16/17 H1 16/17 EBITDA before special items (Delta vs. PY, in million) +56 _focused spend in IT and CRM _start-up investments in Retail Media Group _build-up of holding structures on CECONOMY level +5 FY 15/16 Q1 16/ Q2 16/17 H1 16/17 EBIT LOWER THAN PY // 12

13 FY 2016/17 outlook for CECONOMY Guidance FY 2016/17 Lfl sales growth >0% EBIT before special items: EUR >466m 1 Investments: EUR m _Positive lfl sales growth expected _CECONOMY EBIT before special items (EBIT for continued operations) to be slightly better than PY s level of 466 million 1,2 _Increased contributions from our suppliers _Improvement in Redcoon-related losses _Continued turnaround of Turkish operations _First results of restructuring efforts in Russia and Sweden _Tight cost control measures in place and executed _Investments to go back to levels of EUR m compared to EUR 406m in FY 2015/16 2 CECONOMY GUIDANCE: SALES AND EBIT HIGHER THAN PY 1 Based on constant foreign exchange rates. 2 As per Combined Financial information for CE Group and related supplementary information. // 13

14 // Strategic update // 14

15 The business model is transforming CECONOMY is now positioning itself as a CE customer community 1 CATEGORY KILLER. CE CUSTOMER COMMUNITY Phase 1 Phase 2 Phase 3 Phase 4 ELECTRONICS RETAILER MULTI-CHANNEL RETAILER // 15

16 Enabler Value driver Key value drivers and enablers #1 Online, Mobile, Multi-channel UPDATE #2 Services & Solutions #3 Customer #4 #5 Category Data / CRM UPDATE UPDATE UPDATE Redefine central vs. decentral Selective expansion / new formats Management Pricing Supply Chain #6 UPDATE Portfolio #7 Net Competitive Working Cost Base Capital #8 #9 People #10 transformation Digital & technology leadership // 16

17 Multi-channel is the winning model Where do German consumers buy CE products? Revenue share in Germany (in %) 5% 6% 16% 17% 7% 17% 8% 17% 10% 17% 11% 17% _Total online sales of more than EUR 2.2 billion LTM _Around 300,000 SKUs online, further expansion of online assortment ongoing _Wide range of delivery services, including express and sameday delivery _Unmatched pick-up option (> 40% of online orders) _Product in-store availability can be checked online 78% 77% 76% 74% 73% _More responsive website increasing conversion 72% Online business of brick&mortar retailers Online Pure Player Brick&mortar shops - convenience & specialised (w/o online business) Source: GFK Handelspanel. CECONOMY has become one of the largest CE online/mobile players in Europe and still headroom to grow online // 17

18 Focus on services & solutions to meet increasing consumer demand Roll-out of smart bars _Smart bars offering instant mobile repair services like screen repairs, battery replacement, personalisation of products and data transfer _Rolled out to 510 stores across Europe Acquisition of ZES Goes _Acquired majority stake in ZES Goes (NL) specialised in optimizing service processes, complementing in-store service offering with the necessary software & processes _ZES processes already integrated in MediaMarkt NL value chain; roll out to all countries planned RELENTLESS FOCUS ON STRENGTHENING SERVICE VALUE PROPOSITION, IN STORE, REMOTE & AT THE HOMES OF OUR CUSTOMERS // 18

19 In-depth customer knowledge as the basis for the monetisation of our customer base MediaMarkt Club Germany (in m) 29% 2.30 Store Revenue restructuring penetration & focused expansion All local loyalty Germany programs (in m) 25% > Mar 17 Mar Just fully rolled out to all SATURN stores across Germany Feb 16 Jun 16 Dec 16 Mar 17 CONTINUOUS RISE IN NUMBER OF MEMBERS, GAINING DEEPER KNOWLEDGE OF OUR CUSTOMERS // 19

20 Selective expansion of CECONOMY s store network also remains a key growth driver Number of stores Q1 16/17 Q2 16/17 1,034 _Selective expansion with 20 openings in H1 16/17 (average size <1,600sqm) _Focus mainly on proximity and shop-in-shop formats 1,023 FY 15/16 9 Openings Closings H1 16/17 _Pilot of 2 shop-in-shops with Tesco in Hungary _Opening of two MediaMarkt shop-in-shop concepts at MAKRO Belgium Average size of stores (in sqm) 2,909 2,861 H1 16/17 FY 15/16 X ~1,600 Openings ~1,900 Closings H1 16/17 ONGOING EXPANSION, YET AT A LOWER PACE AND WITH NEW & SMALLER FORMATS // 20

21 Recap CMD: Significant potential to increase margins by either improving or exiting question-mark countries Core Peers (Listed) EBITDA Margin 12 (LTM) CECONOMY EBITDA Margin 2 (2015/16) 3.9% 5.7% 6.2% +5%p 3.3% 4.3% direction 5% 5.4% -1.6% Lowest 5 countries Group Best 5 countries Mid-term ambition Best country PEER LTM MARGINS RANGE FROM % EBITDA MARGIN TO IMPROVE TOWARDS 5% 1 Company filings for LTM data as of Nov. 2016, numbers calendarised to September year end. 2 EBITDA before special items. Note: Darty part of FNAC. // 21

22 Restructuring of redcoon almost completed Country Exits _Discontinuation of selected unprofitable wholesale businesses _Decision taken to close redcoon operations in Austria, Spain, Portugal, Benelux Full integration _redcoon Germany & Poland continue operations _Full integration of redcoon Germany into the MediaMarkt Germany organisation _Leveraging redcoon logistics for Saturn online business BENEFITS OF RESTRUCTURING MEASURES EXPECTED BY YEAR-END // 22

23 Country portfolio measures to improve earnings initiated Russia Sweden _Full scope restructuring program to reach break-even initiated _Continued roll-out of shop-in-shop concept with METRO Cash & Carry _Positive results of ongoing operational and restructuring efforts expected _All strategic options remain under review Turkey _Internal business turnaround remains well on track _Major improvement in the past 2 quarters _Full implementation of centralised category management and pricing FIRST RESULTS OF THESE EFFORTS EXPECTED BY YEAR-END // 23

24 // Introduction to store visits // 24

25 Two of Europe s most modern, fully multi-channel and digitally enabled electronic retail stores MEDIA MARKT Ingolstadt // ~3.500 sqm // EUR c. 35m sales // Highlights: Drive-in area, MediaMarkt club info point, smartphone repair service, e-bike area SATURN Ingolstadt // ~4.200 sqm // EUR c. 34m sales // Highlights: Service smart bar, 24/7 pick-up station, Galaxy World, drone flight area // 25

26 // 26

27 MEDIAMARKT INGOLSTADT Factsheet, 08 June 2017

28 Snapshot Market Data MediaMarkt Ingolstadt Opening date June 1982 Last modernisation September 2014 Sales area ~3,500 sqm FTEs 76 Market Share (10km Catchment area) 17% Operational KPIs 2016 Turnover ~35 m Space productivity ~9,900 per sqm Conversion rate 41% Online pick-up rate (nat. avg.) 46% Department share (top 6): White goods ~19%, computer hardware ~14%, TV ~13%, accessories ~12%, GSM ~11, SDA ~8% Managing Directors Wolfgang Bachesz Josef Heinl 2

29 Store plan 1. Information 2. Smartphone instant repair 3. Service centre (e. g. online pick-up, financial service) 4. Check out area 5. E-bikes 6. Photo 7. Accessories 8. Smartphones 9. Entertainment 10. Household appliances 11. Small domestic appliances (SDA) 12. IT hardware 13. Hi-fi 14. TV 15. White goods 3

30 SATURN INGOLSTADT Factsheet, 08 June 2017

31 Snapshot Market Data Saturn Ingolstadt Opening date October 1999 Last modernisation October 2016 Sales area ~4,200 sqm FTEs 81 Market Share (10km Catchment area) 17% Operational KPIs 2016 Turnover ~34 m Space productivity ~8,100 per sqm Conversion rate 40% Online pick-up rate (nat. avg.) ~35% Department share (top 6): Computer hardware ~15%, white goods~14%, accessories ~14%, GSM ~13%, TV ~13%, SDA ~9% Managing Directors Dirk Huffert Gertraud Haslauer 5

32 Store plan 1. Lounge 2. Information and service centre (e. g. online pick-up, instant service, financial service) 3. Check out area 4. Entertainment 5. Gaming incl. VR 6. Accessories 7. Innovation area 8. Smartphone accessories 9. Smartphones incl. Galaxy World 10. IT Hardware 11. Photo incl. drone flight area 12. TV 13. Hi-fi 14. Smart home 15. Small domestic appliances (SDA) 16. White goods 6

33 Recommended store tour 1. Orientation / ESL / Robotics Orientation Experience 5 2. Service / personalisation First-class service Samsung Galaxy World Experience 2 End 4. Gaming / VR area Experience 1 5. Drone flight area Experience 7

34 Highlights Deep dive Orientation Electronic Shelf Labels (ESL) PVC floor & LED lightning Imagery on three lines The ESL rollout to all the stores and thus enabling to fully align on- & offline pricing in any given moment. Rollout finished in All core format stores are continuoulsy upgraded and remodeled. This includes: new LED lighting, flooring, new corporation design, digital shelf labels, POS, etc. It is an emotional and also visual tool to guide the customer through the product categories. Therefore, we implement a system with three different zoom levels: people interacting with products, products in the limelight and details of products. 8

35 Highlights Deep dive Experience Robotics Paul is a mobile service robot who can navigate customers to a specific department and / or product and provide information Nao is an interactive humanoid robot that can be used for welcoming, executing satisfaction surveys, promote products and entertain customers. Virtual reality / Galaxy World New technologies & innovations are at the core of the Saturn brand with the aim to inspire customers. Test phase for the presentation in terms of customer experience, improvement and roll-out. Cooperation with suppliers to present exclusive / high-end products. Drone flight area Drones are a growing market segment and should be presented accordingly. An example of a presentation with its main focus on customer experience. A place to try products in an extraordinary way and have a playful time. 9

36 Highlights Deep dive First-class service Standard services Sofort-Service / instant service 24/7 pick-up station Companion for the customer throughout the customer journey: pre-buy, set-up, use & repair. Saturn offers a wide range of services, from (express) delivery and installation up to repairs. 3 rd party services as add-ons to core products (energy & connectivity contracts, digital content) Services as an increasingly important profit pool for MediaMarktSaturn. Instant services with focus on smartphones, tablets and notebooks. Product personalization as an additional service. Roll-out in progress. 24/7 pick-up lockers make orders available independently from opening hours as an extension to delivery and pick-up in store services. Cooperation with shipping companies are in being evaluated. 10

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