CECONOMY WITH STRONG TRADING IN COUNTRIES LESS AFFECTED BY COVID-19 IN THE THIRD QUARTER - GERMAN BUSINESS MARKED BY LONG LOCKDOWN AND RESTRICTIONS
Düsseldorf, 19 July 2021
- Strong trading continued in all countries less affected by COVID-19 restrictions, thanks to continued high customer demand for Consumer Electronics
- German in-store sales impacted by long lockdown period and severe restrictions; slight trend improvement since full reopening mid-June
- Higher customer checkout value and improved conversion rate overcompensated muted store traffic
- Online sales in Q3 remained on high level and accounted for around 34% of total sales, demonstrating successful execution of omnichannel strategy
- Q3 sales adjusted for currency effects and portfolio changes up +8.0% and adjusted EBIT1 excl. associates -48 ?m below prior year due to normalization of the cost base (especially discontinuation of short-time work)
- On 9M basis, sales adjusted for currency effects and portfolio changes up +5.4% and adjusted EBIT1 excl. associatesonly slightly below prior year, despite almost 6 months of store closures and restrictions in Germany
"Almost the entire current financial year so far has been marked by the COVID-19 pandemic and associated temporary store closures, particularly in Germany. The third quarter was no exception. The pandemic development coupled with the incidence-based regulations in Germany only enabled the full reopening of our German MediaMarkt and Saturn stores at the end of the third quarter. Customer frequency following the openings is still below pre-pandemic levels and we see more transactional business. Yet, the sales trend in Germany is slightly improving. In countries where we were not or less impacted by COVID-19-related restrictions, the high level of buying interest for consumer electronics continued in the third quarter. I am also pleased with the sustained strong level of our online sales despite the high comparison basis and that demand for Services and Solutions picked up, particularly in the online channel. We therefore continue to reap the benefits of our omnichannel approach and the strategy behind it," Bernhard Düttmann, CEO of CECONOMY.
Q3 2020/21 preliminary results
- Sales adjusted for currency effects and portfolio changes increased by +8.0% (+8.1% on a like-for-like basis) thanks to continued high demand for Consumer Electronics and successful marketing campaigns; April 2020 heavily affected by Group-wide lockdowns, leading to low comparison base
_Countries: All countries except Germany and Portugal posted a year-on-year increase in sales; Spain, Italy and Turkey performed particularly well overcompensating sales decline in Germany which suffered from the long lockdown and opening restrictions
_Product categories: Demand was especially strong for new media (computer hardware, telco products and accessories), TVs and home appliances, while the entertainment and photo category remained below prior year's level
- Online sales rose by +3.3% yoy to 1.5 ?bn despite high comparison basis; online sales share reached 33.9% of total sales (Q3 2019/20: 35.2%); average bon at sustainable high level and continued uplift in conversion; pick-up ratio came in at 43% despite ongoing restrictions
- Services & Solutions sales increased by +7.9% yoy, accounting for 5.5% of total sales (Q3 2019/20: 5.5%); Services & Solutions business supported by strong demand for extended warranties and Smartbar services as well as better adoption of online services
- Gross margin1with 15.9% roughly on prior-year's level (Q3 2019/20: 16.1%); higher income from Services & Solutions and improved stock level and aging during the last quarter largely offset by negative product mix effects and promotional market environment
- OPEX1 ratio came in at 19.2% due to normalization of cost base (Q3 2019/20: 18.1%); PY heavily supported by COVID-19-related cost measures (especially short-time work); continued improvement in underlying operative cost performance thanks to new Operating Model and location cost savings
- Adjusted EBIT1 excl. associates declined by -48 ?m yoy to -93 ?m (Q3 2019/20: -45 ?m), mainly due to normalization of the cost base, while sales development had a positive effect; strong EBIT decline in DACH driven by severe lockdown in Germany; Eastern Europe with slight yoy improvement while the segments Western/Southern Europe and Others came in on prior year's level
- Reported EBIT declined by -41 ?m yoy to -106 ?m (Q3 2019/20: -64 ?m); PY included 18 ?m non-recurring expenses compared to 12 ?m in CY, roughly equally split for COVID-19-related store closures, the introduction of the new Operating Model and transaction costs
All figures and statements reported herein are preliminary and unaudited. Full financial disclosure for Q3/9M 2020/21 will be published on 12 August 2021 at 07:00 am CEST.
1Excluding non-recurring effects and adjusted for portfolio changes.
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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 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.
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