CECONOMY AG Investor Presentation. January 2019

Transcription

1 CECONOMY AG

2 DISCLAIMER AND NOTES BY ACCESSING THIS PRESENTATION YOU AGREE TO THE FOLLOWING RESTRICTIONS This document and the presentation to which it 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 respective period and not from the consolidated (interim) financial statements of the former METRO Group. 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 former METRO Group and, thus, may not be fully comparable to such financial statements. Historical information contained in this presentation which is not taken or derived from the unaudited combined financial statements 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. In addition, the historical financial and operative information included in this presentation 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, readers 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, express or implied, as to the accuracy, correctness or completeness of the information contained in this presentation. 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 forward-looking statements. // 2

3 Disclaimer and Notes (cont d) 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. 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 categorisation, 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. 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 analysed 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. // 3

4 // CECONOMY At a Glance // 4

5 CECONOMY at a glance // Europe s largest Consumer Electronics platform // 21.4bn of sales and 650m EBITDA in FY 2017/18 // More than 2.5bn online sales and 1.4bn sales in Services & Solutions // Leading position in 8 out of 14 countries // 2 strong brands: MediaMarkt and Saturn // Fully multi-channel and digitally-enabled 1,000+ store network // Solid financial framework // Minority investments in Fnac Darty (c.24%) and M.video (c.15%) Shareholder structure 1 Haniel 22.7% Free float 47.2% 14.3% Meridian 6.6% Stiftung 9.1% freenet Beisheim Number of stores ,022 Sept 17 Sept 18 Product category breakdown FY 17/18 9% 5% Computer Entertainment Other3 Hardware 2 21% & Accessories Telecommuni cations 21% 22% Free Cash Flow (in m) -183 White Goods % Brown Goods 480 FY 16/17 FY 17/18 1 Calculated on the basis of the number of voting rights in disclosures pursuant to section 40 para. 1 sentence 1 WpHG; 2 Telecommunication devices such as ipads without SIM card included; 3 Includes in essence Photo&Office equipment. // 5

6 Solid progress in the Online and Services & Solutions business Strong Online business Stable pick-up rate Increasing Services & Solutions business % of total sales Sales ( m) 10.6% 12.1% 2,300 2,593 In % of orders 40% 42% % of total sales Sales ( m) 6.2% 6.9% 1,344 1,478 16/17 17/18 16/17 17/18 16/17 17/18 Growing CRM basis Rising number of customer contacts Ongoing rightsizing of stores Avg. store size m² 2,808 2, ,022 In million members In billion contacts Number of stores 16/17 17/18 16/17 17/18 16/17 17/18 Note: Business figures represent the continuing operations of CECONOMY, i.e. excl. the Russian MediaMarkt business. CRM data for Poland not included due to change to new CRM IT platform. // 6

7 Why invest in CECONOMY? #1 #2 #3 #4 CECONOMY IS THE LEADER IN MULTI-CHANNEL AND SCALE CECONOMY HAS A STRONG FINANCIAL PROFILE CECONOMY HAS THE POTENTIAL TO INCREASE MARGINS AND FREE CASH FLOW GENERATION CECONOMY HAS THE POTENTIAL TO LEAD THE RETAIL CONSOLIDATION AND TRANSFORMATION IN THE FUTURE // 7

8 Mid-term targets Sales 1 EBITDA margin Tax rate >3% CAGR direction 5% direction 40% Investments 2 FCF conversion 3 Dividend pay-out ratio 4 1.5% of sales 60-70% 45-55% 1 At constant currency before portfolio effects. CAGR = Compound Annual Growth Rate. 2 Cash investments. 3 Free Cash Flow conversion defined as EBITDA less cash investments plus/minus changes in net working capital divided by EBITDA; EBITDA adjusted for investment in Fnac Darty stake. 4 % of EPS. // 8

9 // Q4/FY 2017/18 Results // 9

10 Fx-adjusted sales and NWC improved, but EBIT/DA lower than expected (excl. Russia) ( m) 21,605 ( m) -0.9% +0.2% 21, fx-adjusted ( m) FY 16/17 FY 17/18 FY 16/17 FY 17/18 FY 16/17 FY 17/18 FY 16/17 FY 17/18 Sales EBITDA EBIT Change in Net Working Capital (NWC) // Fx-adjusted sales increased by +0.2% (-0.9% on a reported basis) // Turkey, Spain and Italy main drivers for fxadjusted growth, while Germany and Switzerland declined // Online sales up +13% yoy // Services & Solutions grew by +10% yoy // EBIT, incl. 21m Fnac Darty contribution, declined by -75m yoy ( -71m fx-adjusted) // Gross margin declined by -0.5%p. to 20.1% // Sales- and margin-driven decline, particularly in Germany // Support from positive non-recurring effects // Goodwill impairment in Switzerland ( 7m) // Change in NWC improved to 302m // Higher trade payables driven by temporary optimization of payment terms and higher purchasing volumes due to VAT campaigns in Germany // Free Cash Flow (FCF), adjusted for the Fnac Darty acquisition in the prior year, improved by around 206m Note: EBITDA & EBIT incl. Fnac Darty; EBITDA & EBIT in FY 16/17 before special items. Change in Net Working Capital acc. to Cash Flow Statement. // 10

11 Sales faced tough comps in Q4 and were negatively impacted due to the weather conditions in July and August Total sales -3.8% 5, % fx-adjusted 4,953 Highlights // Positive momentum from promotional campaigns in September could not compensate for the overall decline in sales in Germany Q4 16/17 Q4 17/18 // Switzerland with declining sales in an intense competitive market, while Hungary continued to grow double-digit Q4 17/18 sales by segment (fx-adjusted, yoy change) 10% // Positive development in Italy, while the business in the Netherlands, Belgium and Spain was below the prioryear period -1% -4% -4% DACH W. & S. Europe E. Europe Others Note: Sales figures for Italy for 16/17 and 17/18 were restated to present revenues related to extended warranties on a net basis. // Turkey again with double-digit sales growth, also driven by inflation // Declining sales at other smaller operating businesses and slightly lower sales in Sweden // 11

12 Online sales grew by +10% in Q4 and +13% in FY 17/18 Online Sales (in m) 10% 13% Highlights ,300 2,593 // Online sales in Q4 increased by +10% yoy, accounting for 12.2% of total sales vs. 10.6% in the prior-year period Q4 16/17 Q4 17/18 FY 16/17 FY 17/18 // Over the last 12 months, online sales increased by +13% yoy, accounting for 12.1% of total sales (previous year: 10.6%) Online Sales (% of total sales) 10.6% 12.2% 10.6% 12.1% // Pick-up rate in Q4 increased slightly to 43% vs. 42% in the prior-year period; in FY 17/18, the pick-up rate increased to 42% vs. 40% in the prior year // Online assortment increased to c. 367k SKUs vs. the prior year Q4 16/17 Q4 17/18 FY 16/17 FY 17/18 // 12

13 Services & Solutions sales accounted for 8% of total sales in Q4 17/18 Services & Solutions Sales (in m) 3% 10% Highlights ,344 1,478 // Services & Solutions sales in Q4 grew slightly by +3% yoy, accounting for 8.0% of total sales vs. 7.5% in the prior-year period Q4 16/17 Q4 17/18 FY 16/17 FY 17/18 Services & Solutions Sales (% of total sales) 8.0% 6.9% 7.5% 6.2% // Sales growth driven by telco contracts, insurances, extended warranties and repair services // Over the last 12 months, Services & Solutions sales increased by +13% yoy, accounting for 12.1% of total sales (previous year: 10.6%) // Service smartbars are already implemented in 922 stores (+101 vs. June 2018) Q4 16/17 Q4 17/18 FY 16/17 FY 17/18 // 13

14 Solid growth in the number of members of our customer programmes Members in Customer Programmes in Germany (in k) ,343 4,650 3,805 3,196 3,696 4, ,222 Sept 17 Dec 17 Mar ,925 4,505 1,420 Jun 18 Sales Penetration MediaMarkt Club Germany 25% 27% MM Club +540 Saturn Card 6,465 4,884 1,581 Sept 18 29% 28% 28% Highlights // German MediaMarkt Club with solid growth in the number of members, counting 4.9m in September 2018 (+379k members vs. June 2018) // 28% sales are generated by MediaMarkt Club members in Germany // Saturn Card in Germany counted close to 1.6m members in September 2018 (+161k members vs. June 2018) // All customer programmes counted more than 16.8m members in total internationally Q4 16/17 Q1 17/18 Q2 17/18 Q3 17/18 Note: CRM data for Poland as of May 18 not included due to change to new CRM IT platform. Q4 17/18 // 14

15 Selective store expansion continued Number of stores 9M 17/18 Q4 17/18 Highlights ,022 // Selective store expansion continued in the fourth quarter with reduced number of openings Sept 17 Openings Closings Sept 18 Average size of stores (in m²) -3.0% 2,808 2,724 // 3 openings in Turkey followed by Germany and Sweden with 1 store opening each; in contrast, 2 stores were closed in the same period // Over the 12 months period, 34 stores were opened and 8 stores closed // Average store size reduced by 3.0% since September 2017, mainly due to openings of small formats and store rightsizings ~1,200 ~1,170 // Low double-digit number of net openings of traditional store formats in FY 18/19 planned Sept 17 Openings Closings Sept 18 // 15

16 Substantial earnings shortfall in Q4 17/18 driven by declining sales, esp. in Germany and Switzerland, along with a declining gross margin EBITDA & EBIT excl. Fnac Darty (in m) EBITDA EBIT Highlights // Gross margin declined by -0.9%p. to 21.6% // Weaker than expected trading in Germany driven by unusually hot weather in July and August in Germany Q4 16/17 Q4 17/18 Q4 16/17 Q4 17/18 // Earnings in Switzerland impacted by sales decline and also goodwill impairment Segment EBITDA excl. Fnac Darty (in m) DACH W. & S. Europe E. Europe Others* Note: EBITDA & EBIT in Q4 16/17 before special items. *Others: Including consolidation. Q4 16/17 Q4 17/18 // Italy benefited from previous year s reversal of the accrual-related effect // Positive earnings development in Turkey mainly due to sales growth // Others impacted by lower pension income (- 6m yoy) // Location-related provisions for Switzerland, Sweden and Greece also weighed on earnings // 16

17 Decline in EPS due to lower earnings and impairment of METRO AG stake Net financial result (in m) Tax rate Highlights %p % 60.7% // Financial result negatively impacted by -268m impairment of METRO AG stake, partially offset by 25m METRO AG dividend and also by book gain due to disposal of 3.6% METRO AG stake in September -198 FY 16/17 FY 17/18 Minorities (in m) FY 16/17 EPS (in ) FY 17/18 // Deterioration of tax rate due to non-tax deductible impairment of METRO AG stake; underlying tax rate improved to 34.1% // Adjusted for METRO and Fnac Darty, minorities at around 25% of underlying profit or loss for the period // EPS decline due to lower earnings and METRO AG stake impairment 0.07 FY 16/17 FY 17/18 FY 16/17 FY 17/18 Note: All figures shown from continued operations; FY 16/17 figures shown before special items. // No meaningful basis for the distribution of a dividend for FY 17/18; general dividend policy remains in place for future years // 17

18 CECONOMY s underlying tax rate improved to 34.1% Transition of reported to underlying tax rate (FY 17/18) Reported METRO & Fnac Darty Underlying Pre-tax profit 60.7% 34.1% Tax expense Improvement of underlying tax rate (FY 16/17 vs. FY 17/18) Russia: -2.0%p. 42.1% Before SI FY 16/17-4.7%p. German tax group -3.4%p. Turkey DTA activation +0.2%p. Others 34.1% Underlying FY 17/18 Highlights Transition from reported to underlying tax rate (FY 17/18): // Elimination of METRO AG impairment and dividend, book gain from disposal of 3.6% METRO AG stake and Fnac Darty profit share Reduction of tax rate before special items of 42.1% (FY 16/17) to underlying tax rate of 34.1% (FY 17/18) by: // Implementation of tax group with the 91 most profitable German MediaMarkt stores in FY 17/18, thereby utilization of almost all tax loss carry forwards of MSH (one-time tax expense reduction of 22m) // DTA activation in Turkey due to profitability improvements (one-time tax expense reduction of 16m) // Improvement also driven by elimination of losses of Russian MediaMarkt business Note: All figures shown from continued operations; FY 16/17 figures shown before special items. // 18

19 Positive Free Cash Flow in FY 17/18 due to clearly positive NWC FY 17/18: Free Cash Flow (in m) 650 Rep. EBITDA 302 Δ NWC FY 16/17: Free Cash Flow (in m) Note: Cash investments and FCF for 9M 17/18 were restated to exclude investments in money market funds from cash investments Tax Other OCF Cash FCF Adj. FCF investments Rep. EBITDA Δ NWC Trade tax receivables Lower bonus provisions Reversal of Fnac Darty profit share -160 Tax Other OCF Fnac Darty acquisition Cash investments -183 FCF 275 Adj.FCF // Free Cash Flow, adjusted for the Fnac Darty acquisition in the previous year, improved by c. 206m // NWC improvement driven by higher trade payables due to temporary optimization of payment terms and an increased purchasing volume due to the promotional campaigns in September in Germany // Lower cash taxes mainly due to implementation of tax group // Other OCF impacted trade tax receivables, lower build-up of bonus provisions and reversal of Fnac Darty profit share // Cash investments, adjusted for Fnac Darty in the previous year, declined by around 47m yoy to 263m (or 1.2% of sales vs. 1.5% of sales in the previous year) Highlights // 19

20 CECONOMY will face lack of positive non-recurring effects in the previous year and expects contributions from accelerating its strategic initiatives Indicative EBIT development (excl. Fnac Darty) Included non-recurring effects such as: Re-assessment of inventory costs Valuation of gift card liabilities Pension income Middouble digit m amount Contributions from: Digital Growth Services & Solutions Category & Supply Chain Management Organization & Cost Structure Investing into the future FY 17/18 FY 18/19e // 20

21 Outlook The outlook is adjusted for exchange rate effects and before portfolio changes. Still to be specified expenses in connection with the restructuring and optimization of structures and business processes at administrative and central units are not included. Expenses for already announced management changes in top management are also not included. m FY 17/18 FY 18/19 Sales Total sales 1 21,418 Slight increase EBITDA (excl. Fnac Darty) EBIT (excl. Fnac Darty) Included non-recurring effects such as: Re-assessment of inventory costs Valuation of gift card liabilities Pension income Slight decline Slight decline Fnac Darty profit share 21 Mid double-digit m amount (based on consensus estimate) Net Working Capital Moderate decline // 21

22 // Strategy & Operations // 22

23 State of MediaMarktSaturn Retail Group Leading multi-channel business model Attractive market with rising demand for services Highly decentral and complex organization and processes Inconsistent in executing our strategic initiatives and lacking focus Leadership challenges and new skills required Disappointing operational and consequently also disappointing financial performance Requiring investments into the future Unchanged strong potential not yet fully utilized // 23

24 We are building a new organization New Leadership Team at MediaMarktSaturn Retail Group Chief Executive Officer Chief Financial Officer Chief Investment Officer Chief Operating Officer Chief Marketing & Digital Officer Chief Technology Officer Responsible for orchestrating the transformation Define and implement consistent standards across the company Focus on implementation of strategic initiatives // 24

25 Our focus now lies on the implementation and acceleration of these strategic initiatives Multi-channel business model DIGITAL GROWTH SERVICES & SOLUTIONS CATEGORY & SUPPLY CHAIN MANAGEMENT ORGANIZATION & COST STRUCTURE // Improve conversion through optimized user experience and customer journey (e.g. by improving average load times, recommendation share) // Improve online margins by pushing relevant online services // Refocus marketing investments and leverage data analytics to drive customer acquisition and retention // Use country best practices to improve attach rates in existing services portfolio // Implement new proposition for insurances and extended warranties // Further ramp-up of Smartbars // Ramp-up at-home tech support // Drive recurring revenue models through own billing platform for e.g. security software // Deploy new, group-wide category management approach // Roll-out central planning and replenishment // Centralize supply chain and implement central warehouses with shared stock // Improve last mile offerings and management of providers // Build new management structures and processes // Redesign store and HQ organizations as part of centralization initiatives // Optimize and challenge store portfolio to reduce location costs // Drive general cost reductions (e.g. indirect spend) // 25

26 This transformation will require initial investments involving restructuring expenses Requires investments in terms of both money and time Continue to invest in the future which is about customer experience Improve IT and logistics systems Align all other costs to the strategy: location, marketing and organizational costs // 26

27 We are familiar with transformations and are developing a value creation plan for Germany Iberia Italy Netherlands Germany Turnaround Turnaround Value Creation Value Creation / / Turnaround during economic crisis Ruthless cost saving and restructuring programs Professionalized control systems Improve structure and processes to manage costs and speed Restructure cost base Opening-up new income sources from Services & Solutions Implementation focus Focus on fewer topics in line with strategic initiatives Build-up innovative services business Implement basic stock and category management approach Introduction of service standards Invest into the centralization of the business Implement cross-docking platform and central repair hub (in 2016) Change management Improve store operations Consumer-centric business model // 27

28 Foundations laid to improve Black Friday performance, but turning best practices and learnings into actions is a gradual process October November December? Black Friday 2018 Foundations Challenges Best practice sharing, early planning and preparation Still highly decentral organization and processes Attack rather than react, more cautious sales and stock planning in pre- and post campaign period Better goods margin planning and early securing of supplier support Services as cornerstone of campaign planning focus on attach during Black Friday period Complexity of steering goods margins and conditions Backbone systems capacity challenged during peak periods Different starting points for services in the countries // 28

29 FY 18/19 will be a year of transition the transformation already started This company has a great potential that has not been fully utilized. We have to fix the basics and lay the foundation for a sustainable future. We will put the customer back at the center of everything we do. By doing so, we will be able to lift the huge potentials and improve our operational and consequently also our financial performance sustainably. // 29

30 // Back Up // 30

31 Sales & number of stores by country Sales ( m) Number of Stores FY 16/17 FY 17/18 FY 16/17 Openings Closures FY 17/18 Germany 10,556 10, Austria 1,169 1, Switzerland Hungary DACH 12,662 12, Belgium Greece Italy 1 2,064 2, Luxembourg Netherlands 1,590 1, Portugal Spain 1,967 2, Western/Southern Europe 1 6,691 6, Poland 1,033 1, Turkey Eastern Europe 1,699 1, Sweden Others CECONOMY 1 21,605 21, ,022 Note: All figures shown from continued operations. 1 Sales figures for Italy for 2016/17 and 2017/18 were restated to present revenues related to extended warranties on a net basis. // 31

32 Declining EBIT/DA in Q4 and FY 17/18; EPS in FY 17/18 additionally impacted by impairment of METRO AG stake m Q4 16/17 Q4 17/18 Change FY 16/17 FY 17/18 Change EBITDA EBITDA excl. Fnac Darty EBITDA excl. Fnac Darty margin 5.8% 4.3% 1.5%p. 3.3% 2.9% 0.4%p. EBIT EBIT excl. Fnac Darty EBIT excl. Fnac Darty margin 4.7% 3.0% 1.7%p. 2.3% 1.9% 0.4%p. Net financial result Earnings before taxes Income taxes Tax rate 36.9% 60.2% 23.4%p. 42.1% 60.7% 18.6%p. Profit or loss for the period attributable to non-controlling interest attributable to shareholders of CECONOMY AG Number of shares (m) EPS ( ) DPS ( ) n.a. n.a. n.a Note: All figures shown from continued operations. Q4 and FY 16/17 figures shown before special items. // 32

33 Net Working Capital m 30/09/ /09/2017 Change 30/09/ /09/2018 Change Inventories 2,293 2, ,449 2, Trade receivables Receivables due from suppliers 2 1,157 1, ,197 1, Credit card receivables Prepayments on inventories Trade liabilities 4,359 4, ,817 5, Liabilities to customers Accrued sales from vouchers and customer loyalty programmes Provisions for customer loyalty programmes and rights of return Prepayments received on orders Net Working Capital , Balance sheet figures were adjusted for discontinued operations to enable comparison. 2 Includes 29m on 30/09/2016, which was reported in the balance sheet under Other financial assets item in non-current assets. // 33

34 Balance Sheet - Assets m 30/09/ /06/ /09/2018 Non-current assets 2,144 2,093 2,282 Goodwill Other intangible assets Property, plant and equipment Financial assets Investment accounted for using the equity method Other financial assets Non-financial assets Deferred tax assets Current assets 6,136 6,362 6,193 Inventories 2,553 2,819 2,480 Trade receivables Receivables due from suppliers 1 1,246 1,102 1,239 Other financial assets Non-financial assets Entitlements to income tax refunds Cash and cash equivalents ,115 Assets held for sale ,280 8,455 8,475 // 34

35 Balance Sheet Equity and liabilities m 30/09/ /06/ /09/2018 Equity Non-current liabilities 1,062 1,051 1,025 Provisions for pensions and similar obligations Other provisions Borrowings Other financial liabilities Non-financial liabilities Deferred tax liabilities Current liabilities 6,551 6,980 6,784 Trade liabilities 4,929 5,151 5,277 Provisions Borrowings Other financial liabilities Non-financial liabilities Income tax liabilities Liabilities related to assets held for sale ,280 8,455 8,475 // 35

36 CECONOMY executed 10% capital increase with freenet AG joining as new anchor investor Pre-transaction structure based on voting rights* Highlights Free float 50.1% 24.9% Haniel 15.8% Meridian 9.1% Stiftung Beisheim Post-transaction structure based on voting rights* Free float 47.2% 22.7% Haniel 14.3% Meridian 6.6% Stiftung 9.1% freenet Beisheim // Issuance of around 32.6m new ordinary shares (approx. 10% of the former share capital) under exclusion of subscription rights // New total number of voting rights: 356,743,118 // freenet AG acquired all newly issued shares in a private placement at 8.50 per share // Proceeds of around 277m used to strengthen the balance sheet increase the financial power for the continued implementation of the strategic agenda // Successful and long-term partnership between MediaMarktSaturn and freenet s wholly owned subsidiary Mobilcom-Debitel for more than 25 years * Calculated on the basis of the number of voting rights in disclosures pursuant to section 40 para. 1 sentence 1 WpHG // 36

37 CECONOMY s new shareholder structure Pre-transaction structure based on voting rights* Free float 50.1% 9.1% 24.9% 15.8% Beisheim Haniel Meridian Stiftung Beisheim reported 23,615,334 voting rights to METRO Wholesale & Food Specialist AG (now METRO AG) on 12 July 2017 Shareholder Number of voting rights % of voting rights Date of publication Haniel 81,015, % 13 May 2015 Meridian Stiftung 51,117, % 02 June 2017 Beisheim 29,493, % 12 August 2013 Total 324,109,563 In addition: 2,677,966 non-voting preference shares outstanding Post-transaction structure based on voting rights* Free float 47.2% 22.7% 6.6% 14.3% 9.1% Haniel freenet Beisheim Meridian Stiftung Shareholder Number of voting rights % of voting rights* Date of publication Haniel 81,015, % 13 May 2015 Meridian Stiftung 51,117, % 16 July 2018 freenet 32,633, % 12 July 2018 Beisheim 23,615, % 18 July 2018 Total 356,743,118 In addition: 2,677,966 non-voting preference shares outstanding * Calculated on the basis of the number of voting rights in disclosures pursuant to section 40 para. 1 sentence 1 WpHG // 37

38 Fnac Darty consolidation FNAC H /6 FNAC H FNAC H CEC Q4 16/17 CEC Q1 17/18 CEC Q2 17/18 CEC Q3 17/18 CEC Q4 17/18 CEC Q1 18/ // Our c.24% stake in Fnac Darty is accounted for as Investment accounted for using the equity method on the balance sheet // The share of Fnac Darty s net income will be reported in our EBITDA and EBIT // Due to Fnac Darty s semi-annual reporting of net income, we will report our earnings share semi-annually in Q2 and Q4 _First-time consolidation: in our Q2 17/18, we recognized our earnings share of 4/6 x Fnac Darty s full H2 net income (Sep-Dec), because 01 September 2017 was the date of first consolidation // Our share of dividends, should there be any dividends, will be recognised earnings-neutral in our cash flow statement // 38

39 Upcoming IFRS 9 and 15 accounting changes effective as of 1 October 2018 and their impact on CECONOMY s financials IFRS 9 Financial Instruments Effective: 1 Oct // The IFRS 9 accounting change will reduce the impairment requirement for the receivables portfolio // According to an impact analysis no material impact expected Financial Impact 1 Not material // IFRS 15 related changes in the sales allocation on the basis of standalone selling prices are mainly applicable to Telco related package deals Financial Impact 2 IFRS 15 Revenue from Contracts with Customers Effective: 1 Oct // As a result a low triple-digit m shift from Services & Solutions to product sales is expected // Comparable figures according to IAS18 will be provided on a quarterly basis Product sales: Low triple-digit m Service sales: Low triple-digit m 1 Preliminary and unaudited impact analysis as of 31 Dec. 2017; 2 Preliminary and unaudited impact analysis as of 30 Sep // 39

40 Financial calendar Q1 2018/19 results 8 February 2019 Annual General Meeting 13 February 2019 Q2 2018/19 results 21 May 2019 Q3 2018/19 results 13 August 2019 Q4/FY 2018/19 trading statement 24 October 2019 FY 2018/19 results 17 December 2019 // 40

41 Date: 15/01/2019 // 41