37
// 1 Date: 08.06.2017 CECONOMY On-Site Event Ingolstadt, 08 June 2017
// 1 Date: 08.06.2017
CECONOMY On-Site Event
Ingolstadt, 08 June 2017
// 2 Date: 08.06.2017
three-month periods ended March 31, 2017 and December 31, 2016. 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. .
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
DISCLAIMER AND NOTES
Public On-Site Event Ingolstadt
// 3 Date: 08.06.2017
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.
Disclaimer and Notes (cont’d)
Public On-Site Event Ingolstadt
// 4 Date: 08.06.2017
Contents
Public On-Site Event Ingolstadt
// Demerger rationale & timing
// Q2 2016/17 update
// Strategic update
// Introduction to store visits
// 5 Date: 08.06.2017
Demerger rationale & timing //
// 6 Date: 08.06.2017
Rationale for creating a pure “Consumer Electronics platform”
INDEPENDENCE
FOCUS
SIMPLICITY
ALL FREE CASH FLOW INVESTED IN CECONOMY
FULL MANAGEMENT FOCUS ON CREATING VALUE FOR CECONOMY
FULL TRANSPARENCY AND VISIBILITY
Public On-Site Event Ingolstadt
// 7 Date: 08.06.2017
CECONOMY is ready for independence, having completed a significant part of the change process in Consumer Electronics
Public On-Site Event Ingolstadt
RATIONALISATION
DIGITALISATION
CONSOLIDATION
TRANSFORMATION
// 8 Date: 08.06.2017
Q2 2016/17 update //
// 9 Date: 08.06.2017
Q2 summary
POSITIVE SALES TREND
GROWTH DRIVEN ESPECIALLY BY STRONG ONLINE SALES
EBIT LOWER DUE TO INVESTMENTS TO FURTHER STRENGTHEN MARKET POSITION
Public On-Site Event Ingolstadt
CECONOMY GUIDANCE: SALES AND EBIT HIGHER THAN PY
// 10 Date: 08.06.2017
Q2 2016/17 Update – Total and lfl sales growth
Public On-Site Event Ingolstadt
Total Sales Development (in %, excl. redcoon)
Q3 15/16
3.1%
0.7%
Q2 16/17 Q4 15/16
0.7%
-0.1%
3.4%
Q1 16/17 Q2 15/16
Lfl Sales Development (in %, excl. redcoon)
0.5%
Q1 16/17
0.2%
Q4 15/16
-1.1%
Q3 15/16
2.8%
Q2 15/16
2.2%
Q2 16/17
_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
_Negative developments in mainly Italy and Russia
_Market share gains in 10 out of 15 countries (excl. redcoon)
_Further rise in total market share to new all-time high over the past 6 months
POSITIVE SALES TREND
// 11 Date: 08.06.2017
Q2 2016/17 Update – Online and services & solutions
Public On-Site Event Ingolstadt
Online Generated Sales (in € million & total sales share)
611
Q2 16/17
727
478
Q2 15/16 Q1 16/17
435
Q3 15/16 Q4 15/16
466
Services & Solutions Sales (in € million & total sales share)
_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
_Services & solutions sales increased by 4% yoy excl. RTS
_Service “smart bars” already implemented in 510 stores
…UNDERLINES COMPELLING MULTI-CHANNEL AND SERVICES & SOLUTIONS OFFER
9.1% 9.3% 10.5%
9.3% 11.6%
5.6% 5.2%
5.0% 6.4%
* Excluding RTS due to first-time consolidation in Q2 15/16
271
Q2 16/17*
385
261
Q2 15/16* Q1 16/17
299
Q3 15/16 Q4 15/16
340
6.8%
// 12 Date: 08.06.2017
Q2 2016/17 Update – EBIT & EBITDA
Public On-Site Event Ingolstadt
EBIT before special items (Delta vs. PY, in € million)
FY 15/16 Q1 16/17
+46
-57 -53
H1 16/17
+4
Q2 16/17
EBITDA 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
_focused spend in IT and CRM
_start-up investments in Retail Media Group
_build-up of holding structures on CECONOMY level
EBIT LOWER THAN PY -56
+56
FY 15/16 Q1 16/17
+5
-51
Q2 16/17 H1 16/17
// 13 Date: 08.06.2017
FY 2016/17 outlook for CECONOMY
Public On-Site Event Ingolstadt
_Positive lfl sales growth expected
_CECONOMY EBIT before special items (EBIT for continued operations) to be slightly better than PY’s level of €466 million1,2
_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 300-350m compared to EUR 406m in FY 2015/162
CECONOMY GUIDANCE: SALES AND EBIT HIGHER THAN PY
Guidance FY 2016/17
Lfl sales growth >0%
EBIT before special items: EUR >466m1
1 Based on constant foreign exchange rates. 2 As per Combined Financial information for CE Group and related supplementary information.
Investments: EUR 300-350m
// 14 Date: 08.06.2017
Strategic update //
// 15 Date: 08.06.2017
The business model is transforming… CECONOMY is now positioning itself as a “CE customer community”
Public On-Site Event Ingolstadt
ELECTRONICS RETAILER
Phase 1 Phase 2 Phase 3 Phase 4
CATEGORY KILLER
MULTI-CHANNEL RETAILER
1
CE CUSTOMER COMMUNITY
.
// 16 Date: 08.06.2017
Key value drivers and enablers
Public On-Site Event Ingolstadt
Portfolio
V
alu
e
dri
ver
E
nab
ler
#6 Competitive
Cost Base
#7 Net Working
Capital
#8 People trans-
formation
#9 #10
Online, Mobile,
Multi-channel
#1 Services &
Solutions
#2 Customer
Data / CRM
#3 #4 Category Management
Pricing Supply Chain
#5
Digital & technology leadership
Selective expansion /
new formats
#4
Redefine central vs. decentral
UPDATE
UPDATE UPDATE UPDATE UPDATE
// 17 Date: 08.06.2017
Multi-channel is the winning model
Public On-Site Event Ingolstadt
Where do German consumers buy CE products? Revenue share in Germany (in %)
Source: GFK Handelspanel.
78%
16% 17%
76%
17%
7%
2012
5%
77%
2015
10%
17%
73%
6% 11%
17%
72%
2014 2016
17%
8%
2013 2011
74%
Online business of brick&mortar retailers
Brick&mortar shops - convenience & specialised (w/o online business)
Online Pure Player
CECONOMY has become one of the largest CE online/mobile players in Europe and still headroom to grow online
_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 same-day delivery
_Unmatched pick-up option (> 40% of online orders)
_Product in-store availability can be checked online
_More responsive website increasing conversion
// 18 Date: 08.06.2017
Focus on services & solutions to meet increasing consumer demand
Public On-Site Event Ingolstadt
Roll-out of smart bars
Acquisition of ZES Goes
_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
_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
// 19 Date: 08.06.2017
In-depth customer knowledge as the basis for the monetisation of our customer base
Public On-Site Event Ingolstadt
MediaMarkt Club Germany (in m) Store restructuring & focused expansion
CONTINUOUS RISE IN NUMBER OF MEMBERS, GAINING DEEPER KNOWLEDGE OF OUR CUSTOMERS
Dec ’16
2.30
29%
Mar ’17 Jun ’16 Feb ’16
1.78
0.81
0.24
All local loyalty programs (in m)
Mar ’17
25%
Just fully rolled out to all SATURN stores across Germany
Mar ’17
>12
Revenue penetration Germany
// 20 Date: 08.06.2017
Selective expansion of CECONOMY’s store network also remains a key growth driver
Public On-Site Event Ingolstadt
X
Number of stores
Average size of stores (in sqm)
H1 16/17
1,034
Closings
-9
7
2
Openings
20
9
11
FY 15/16
1,023
ONGOING EXPANSION, YET AT A LOWER PACE AND WITH NEW & SMALLER FORMATS
_Selective expansion with 20 openings in H1 16/17 (average size <1,600sqm)
_Focus mainly on proximity and shop-in-shop formats
_Pilot of 2 shop-in-shops with Tesco in Hungary
_Opening of two MediaMarkt shop-in-shop concepts at MAKRO Belgium
Q2 16/17
Q1 16/17
~1,600
2,861
Closings Openings FY 15/16
2,909
~1,900
H1 16/17
H1 16/17
// 21 Date: 08.06.2017
Recap CMD: Significant potential to increase margins by either improving or exiting “question-mark” countries
Public On-Site Event Ingolstadt
Core Peers (Listed)
EBITDA Margin12 (LTM)
6.2% 5.7%
3.9%
PEER LTM MARGINS RANGE FROM 3.9-6.2%
CECONOMY EBITDA Margin2 (2015/16)
+5%p
3.3%
direction 5%
Group Best 5 countries
4.3%
Mid-term ambition
5.4%
Best country Lowest 5 countries
-1.6%
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.
// 22 Date: 08.06.2017
Restructuring of redcoon almost completed
Public On-Site Event Ingolstadt
Country Exits
Full integration
_Discontinuation of selected unprofitable wholesale businesses
_Decision taken to close redcoon operations in Austria, Spain, Portugal, Benelux
_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
// 23 Date: 08.06.2017
Country portfolio measures to improve earnings initiated
Public On-Site Event Ingolstadt
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
FIRST RESULTS OF THESE EFFORTS EXPECTED BY YEAR-END
Turkey
_Internal business turnaround remains well on track
_Major improvement in the past 2 quarters
_Full implementation of centralised category management and pricing
// 24 Date: 08.06.2017
Introduction to store visits //
// 25 Date: 08.06.2017 Public On-Site Event Ingolstadt
Two of Europe’s most modern, fully multi-channel and digitally enabled electronic retail stores
SATURN Ingolstadt
// ~4.200 sqm
// EUR c. 34m sales
// Highlights: Service smart bar, 24/7 pick-up station, Galaxy World, drone flight area
MEDIA MARKT Ingolstadt
// ~3.500 sqm
// EUR c. 35m sales
// Highlights: Drive-in area, MediaMarkt club info point, smartphone repair service, e-bike area
// 26 Date: 08.06.2017
MEDIAMARKT INGOLSTADT
Factsheet, 08 June 2017
2
› 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%
Snapshot
Market Data
MediaMarkt Ingolstadt
Operational KPIs
2016
Managing Directors
› Opening date June 1982
› Last modernisation September 2014
› Sales area ~3,500 sqm
› FTEs 76
› Market Share (10km Catchment area) 17%
› Wolfgang Bachesz
› Josef Heinl
3
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
SATURN INGOLSTADT SATURN INGOLSTADT
Factsheet, 08 June 2017
5
Snapshot
› 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%
Market Data
Saturn Ingolstadt
Operational KPIs
2016
Managing Directors
Dirk Huffert Gertraud Haslauer
› Opening date October 1999
› Last modernisation October 2016
› Sales area ~4,200 sqm
› FTEs 81
› Market Share (10km Catchment area) 17%
6
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
7
Recommended store tour
5. Drone flight area
3. Samsung Galaxy World
2. Service / personalisation
1. Orientation / ESL / Robotics
4. Gaming / VR area
Orientation
First-class
service
Experience
Experience
Experience 1
2
3
5
End
4
Experience
8
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 2016.
› All core format stores are continuoulsy
upgraded and remodeled.
› This includes: new LED lighting, flooring,
new corporation design, digital shelf
labels, digitalization @ 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.
9
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.
Highlights – Deep dive Experience
Robotics Virtual reality / Galaxy World
› 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.
› 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.
10
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.
› 3rd 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.
Highlights – Deep dive First-class service
11
