Ceconomy : Financial Release Q2/H1 2023/24 (Englisch)

Q2 results 2023/24 ended 31 March 2024

15 May 2024

CECONOMY accelerates momentum in Q2 2023/24

Q2 financial highlights

• Q2 sales up by +6.5%1 YoY, driven by strong 5.1% LFL growth in bricks and mortar and online.
• +60bp YoY increase in adjusted gross margin2 to +17.8% due to enhanced product mix and positive impact from new growth businesses.
• +€26m increase in Adjusted EBIT2 to €5m for Q2. Adjusted EBIT margin up 50bp to 0.1%.
• Adjusted EPS increased by €0.17 to €0.19 in Q2.
• Lease-adjustedFCF broadly neutral for H1 with - €7 m.
• NPS all time high at 58 (+5 points) in Q2.
• Outlook FY 2023/24 specified: slight increase in total sales adjusted for currency and portfolio effects, adjusted EBIT of between €290 m and €310 m

Dr Karsten Wildberger, CEO of CECONOMY AG:

"Following a strong Christmas business, we further increased our momentum in the second quarter. Our half-year results show: We don't just promise, we act. We were able to significantly increase our sales in a challenging economic environment. We gained market share in almost all countries - both online and offline. And we have clearly increased our profitability. We also made strong progress in our strategic growth areas. These successes are the result of the consistent implementation of our turnaround for the future, which puts the customer at the centre of everything we do. With our momentum, I am confident about the second half of the year and am pleased that we have been able to specify our outlook in a positive direction."

Key financial data

€m	Q2 22/23	Q2 23/24	Change
Reported sales	5,302	5,334	0.6%
Of which indexing effect IAS 29 (hyperinflation in Türkiye)	+32	+45	39.3%
Growth1 (%)	6.4%	6.5%	+10bp
Like-for-like sales development	6.1%	5.1%	-100bp
Adjusted gross margin2	17.2%	17.8%	+60bp
Adjusted EBITDA2	135	168	+33
Adjusted EBITDA margin3	2.6%	3.2%	+60bp
Reported EBIT	-106	44	150
Adjusted EBIT2	-21	5	+26
Adjusted EBIT margin3	-0.4%	0.1%	+50bp
Net result	-47	85	+132
Adjusted net result	11	94	+83
Reported EPS (€)	-0.10	0.17	+0.27
Adjusted EPS4 (€)	0.02	0.19	+0.17
Net debt	-1,666	-1,711	-45

1Adjusted for currency and portfolio change effects, pre IAS 29.

2Excluding associates, adjusted for portfolio changes (Sweden, Portugal), pre IAS 29 and excluding non-recurring effects. 3Margin calculation based on reported sales pre IAS 29 and adjusted EBIT/EBITDA.

4EPS adjusted for portfolio effects, pre IAS 29.

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Q2 results 2023/24 ended 31 March 2024

15 May 2024

Outlook for FY 2023/24

• Slight increase in currency- and portfolio-adjusted total sales.
• Adjusted EBIT range of between €290 m and €310 m.
• All segments are expected to contribute to sales growth.
• Improvement in adjusted EBIT primarily driven by Western/Southern Europe.

The outlook is adjusted for portfolio changes and excludes earnings effects from companies accounted for using the equity method. Accounting effects of applying IAS 29 in Türkiye as a hyperinflationary economy are likewise excluded, as are non-recurring items, especially those related to the simplification and digitalization of central structures and processes as well as changes in the legal environment.

Group highlights Q2 2023/24

• Strong Sales growth with +5.8% YoY in B&M and +8.8% Online, both portfolio- and fx- adjusted; Online share (incl. Marketplace) at 22.9% (+110bp YoY).
• Growth businesses performing strongly: Marketplace GMV growth of +109% YoY; Retail Media income increased nearly fivefold; Operational Services & Solutions income clearly increased.
• Group NPS at all time high, up by 5 points YoY to 58 in Q2.

€m pre-IAS 29, excluding Sweden and Portugal	Q2 22/23	Q2 23/24	Change1
Online sales	1,104	1,180	+8.8%
Services & Solutions sales	311	349	+14.5%

1Growth adjusted for fx-effects.

Free cash flow

€m	H1 22/23	H1 23/24	Change
EBITDA	505	595	+90
Change in net working capital	224	-105	-329
Tax	-58	-12	+46
Other operating cash flow	-76	-134	-57
Cash investment	-122	-115	+7
Free cash flow	472	229	-243
Lease repayments	-244	-236	+8
Lease-adjusted free cash flow	228	-7	-235

• In the second quarter, lease-adjusted free cash flow showed a positive improvement of c. +€100 million year over year, amounting to -€1.5 billion, reflecting the usual seasonal trends.
• In H1 lease-adjusted free cash flow reached -€7m leading to a liquidity position of €897m on 31 March 2024. The change in Net Working Capital is normalizing as expected given the fact that last year stock level was particularly low. We continued to increase our product availability which led to higher stock levels, and boosted sales growth. We confirm our outlook for positive FCF in FY 2023/24.

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Q2 results 2023/24 ended 31 March 2024			15 May 2024
Performance by segment Q2 2023/24
		Western/Southern		Others4
€m	DACH	Europe	Eastern Europe	CECONOMY
Sales (pre-IAS 29)	2,839	1,681	766	4	5,289
Growth1 (%)	-1.8	4.9	59.4	-4.8	6.5
Like-for-like (%)	-1.8	2.2	54.6		5.1
IAS 29			45		45
Sales post-IAS 29			810		5,334
Reported YoY change (%)	-1.6	3.1	19.5	-	0.6
Adjusted EBIT2	-4	-17	19	7	5
Adjusted EBIT margin3 (%)	-0.1	-1.0	2.4	-	0.1
Adjusted EBIT YoY change	-4	28	-15	17	26

1Adjusted for currency and portfolio change effects, pre-IAS 29.

2Excluding associates, adjusted for portfolio changes (Sweden, Portugal), pre-IAS 29 and excluding non-recurring effects.

3Margin calculation based on reported sales pre-IAS 29 and adjusted EBIT.

4Segment Others includes holding functions, hence respective EBIT margin would not offer a reasonable comparison. Including consolidation.

• DACH: Expanding market share and cost-saving initiatives bolster almost stable EBIT.
• Western & Southern Europe: Sales growth in all countries, except Italy, contributes to a strong improvement in EBIT; Strong market share gain in the region.
• Eastern Europe: Robust sales growth and healthy profitability, but margins impacted by price competition.

Good progress on our key pledges in Q2 2023/24

Business fields	KPI	FY 22/23	Target 25/26	Progress Q2 23/24
Retail Core	Loyalty members	39m	50m	↗
Retail Core	Online share1	23%	c. 30%	↗
Retail Core	Modernization rate	50%	> 90%	↑
Retail Core	Stock reach progress	9.1 weeks	-10%	↑
Space-as-a-Service	# Lighthouses	8	Up to 20	↗
Services & Solutions2	Income in % of total sales	4.5%	c. 5.5%	↑
Marketplace	GMV	€137m	€750m	↑
Private Label	Private Label share	2.4%	c. 5%	↗
Retail Media	Income	€18m	c. €45m	↑

1Online share based on 1P and 3P online sales. 2Operational Services & Solutions income in % of total net sales (excluding e.g., Retail Media, Marketplace commissions & fees, deliveries).

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Q2 results 2023/24 ended 31 March 2024

15 May 2024

Application of IAS 29, hyperinflation accounting

Given the technical impact of IAS 29 (hyperinflation) on sales in Türkiye in Q2 2023/24, we comment on business dynamics pre-IAS 29.

	Reported sales	IAS 29	Sales	Reported sales	IAS 29	Sales
€m	2022/23	effect	pre-IAS 29	2023/24	effect	pre-IAS 29
Q2	5,302	32	5,270	5,334	45	5,289

Results call

There will be a live presentation followed by a Q&A session. The call for investors and analysts will start at 9am CEST today: www.webcast-eqs.com/login/ceconomy-202324-q2

The quarterly statement will be posted on www.ceconomy.de/en/investor-relationsat 7am CEST. A recording of the conference call will be posted shortly after its conclusion.

Store network

The store network has been expanded by four stores in Q2 2023/24, no closures have taken place.

Financial calendar

Q3/9M 2023/24 results	Wednesday	14 August 2024
Q4/FY 2023/24 trading statement	Tuesday	29 October 2024
Q4/FY 2023/24 results	Wednesday	18 December 2024

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Q2 results 2023/24 ended 31 March 2024	15 May 2024
Contact
CECONOMY AG
Kaistr. 3
40221 Düsseldorf, Germany
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Email	[e-mail]
Website	https://www.ceconomy.de/de/investor-relations

Investor Relations

Fabienne Caron

VP, Head of Investor Relations

Telephone [phone]

Mobile [phone]

Email [e-mail]

Dr Kerstin Achterfeldt	Arian Ebrahimi
Senior Investor Relations Manager	Expert Investor Relations
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Disclaimer

To the extent that statements in this document 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 document 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 omnichannel 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 document. 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.

This document 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 as an offer for sale, or as a solicitation of an offer to purchase or subscribe to, any securities in any jurisdiction. Neither this document nor anything contained therein shall form the basis of, or be relied upon in connection with, any commitment or contract whatsoever. Historical financial information contained in this document 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. 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 document.

This document 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 2022/23, pages 33-37. 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.

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