Ceconomy : Results Presentation Q1 2020/21

Results Presentation Q1 2020/21

9 February 2021

Disclaimer and Notes

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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) the risk that CECONOMY shareholders do not approve the transaction, 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 and tax 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. See also "Opportunity and Risk Report" in CECONOMY's most recent Annual Report for risks as of the date of such Annual Report. 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 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. CECONOMY AG assumes no liability for any claim which may arise from the reproduction, distribution or publication of the presentation (in whole or in part). The third parties whose data is cited in this presentation are neither registered broker- dealers nor financial advisors and the permitted use of any data does not constitute financial advice or recommendations.

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.

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.

Historical financial information contained in this presentation 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. The information contained in this presentation may comprise financial and similar information which is neither audited nor reviewed and should be considered preliminary and subject to change.

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 presentation.

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. 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.

In the document, the term "CECONOMY" will be used (for simplicity reasons) also in situations where the business of MediaMarktSaturn Retail Group is concerned.

Date: 15 Dec 2020	// 2
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1. HIGHLIGHTS
2. FINANCIAL PERFORMANCE & OUTLOOK

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1. HIGHLIGHTS
2. FINANCIAL PERFORMANCE & OUTLOOK

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Excellent start into the new financial year 20/21 despite rising COVID-19-related challenges

Continued strong customer demand and high online dynamics supported by attractive marketing campaigns

We deliberately pulled forward Christmas demand to mitigate lockdown risks

Near-term trading subject to significantly increased uncertainties

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We delivered again a successful peak season - key was the extension of the campaign period

+21% yoy	+8% yoy	+30% yoy
Pre-Black Friday period1	Black Friday period2	Post-Black Friday period3

Note: Sales development adj. for currency & portfolio change effects.

1Pre-Black Friday period: 30/10/2020 - 22/11/2020. 2Black Friday period: 23/11/2020 - 30/11/2020. 3Post-Black Friday period: 01/12/2020 - 15/12/2020.

Date: 15 Dec 2020	// 6
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Stationary business again affected by temporary store closures in many countries

Monthly average of open stores

(% of total stores)

89%

59%

70%

69%

37%

43%

14%

Jan 20

Feb 20

Mar 20

Apr 20

May 20

Jun 20

Jul 20

Aug 20

Sep 20

Oct 20

Nov 20

Dec 20

Jan 21

Feb 211

Q2 19/20

Q3 19/20

Q4 19/20

Q1 20/21

Q2 20/21

1Month-to-date average.

Date: 15 Dec 2020	// 7
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Our omnichannel-model is a key advantage during the lockdown

• Webshop can partly compensate temporary closure of stationary business, but in- and outbound logistics impacted by lockdowns
• Pick-up remains available for customers in many cases
• Ship-from-storegives access to store inventory during lockdown
• In-storeservices such as repairs are still available in many stores

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Strong sales and earnings development

despite increasing COVID-19-related B&M restrictions and local lockdowns

+11.4%	346 €m
Sales1 development	Adj. EBIT2 excl. associates

1Adj. for currency & portfolio change effects. 2Adj. for portfolio changes and excl. non-recurring effects in connection with (1) COVID-19-related store closures, (2) the introduction of the new Operating Model and (3) transaction costs related to acquisition of minority shareholding in MediaMarktSaturn.

Date: 15 Dec 2020	// 9
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1. HIGHLIGHTS
2. FINANCIAL PERFORMANCE & OUTLOOK

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Excellent sales growth in the peak period despite increasing COVID-19-related lockdowns, driven by successful campaigns and online business

Total sales	Sales1 by segment
(in €m)	(yoy change)

11.4%1
9.4%
7,464	25.5%
6,821

	13.0%
9.1%	10.7%

Q1 19/20

Q1 20/21

DACH

W. &. S. EUROPE

E. EUROPE

OTHERS

1Adj. for currency and portfolio change effects.

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Online sales more than doubled in the first quarter, generating 30% of total sales

Online sales

(in €m)

+115.7%

2,259

1,048
15.4%	in % of sales	30.3%
Q1 19/20		Q1 20/21

Online share reached even 35% in December as growing COVID-19 restrictions accelerate channel shift

Number of registered online customers increased by c. 3 million in Q1

Decline in pick-up rate to 32%, influenced by lockdowns and partial pick-up bans

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Services & Solutions business impacted by COVID-19-related store closures and associated drop in customer footfall

Services & Solutions sales

(in €m)

-8.6%

-2.6% adj.1

375343

5.5%	in % of sales	4.6%
Q1 19/20		Q1 20/21

1Excl. MediaMarkt Greece business (portfolio change) and excl. a technical effect due to switch from agent to principal model for online sales of mobile phones and related contracts as a bundle in Germany.

Sales growth in October cannot be continued due to rising COVID-19 restrictions

Continued strong demand for extended warranties

Financing and GSM mobile significantly below PY, mainly due to lower store frequency

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Lower gross margin essentially driven by channel shift and logistics costs

Gross margin1

(in % of sales)

-1.4%p.

Accelerated channel shift coupled with product mix effects and

18.3%

17.0%

increased delivery costs

Partial pick-up bans additionally weighed on gross margin

Lower income contribution from Services & Solutions business due to decline in B&M traffic

Q1 19/20

Q1 20/21

1Excl. non-recurring effects and adj. for portfolio changes.

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Further progress in the optimization of the cost structure in addition to COVID-19 cost measures

OPEX1,2

(in % of sales)

18 €m

Absolute cost savings

-1.6%p.

14.8%

13.2%

Q1 19/20Q1 20/21

1Excl. non-recurring effects and adj. for portfolio changes.

2Sum of SG&A expenses and other operating expenses (excl. associates).

Lower personnel expenses driven by FTE reduction and higher cost efficiency

First savings from introduction of new Operating Model

COVID-19-related cost measures mainly related to short-time work

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Strong EBIT increase due to strong sales performance and cost discipline

Adj. EBIT1 excl. associates

(in €m)

+56

346

289

Q1 19/20

Q1 20/21

Adj. EBIT1 excl. associates by segment

(in €m)

Q1 19/20

Q1 20/21

247 259

	50	74
			16
			7
					-15	-3
DACH	W. &. S. EUROPE	E. EUROPE	OTHERS

1Excl. non-recurring effects and adj. for portfolio changes.

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EPS slightly below prior year's level -

EBIT increase offset by lower financial result and higher taxes

EBITDA to EPS (in €m)

€m	Q1 19/20	Q1 20/21	Change
EBITDA	509	521	11
EBIT	319	340	21
Net financial result	9	-10	-19
Earnings before taxes	327	330	3
Income taxes	-105	-126	-21
Tax rate	32.0%	38.1%	6.0%p.
Profit or loss for the period	222	204	-18
Non-controlling interest	53	51	-2
Net result	170	153	-17
EPS (in €)	0.47	0.43	-0.05

Note: From continuing operations and based on reported figures.

Transaction costs (6 €m) related to acquisition of MMS minority stake included in reported EBIT in CY

Net financial result affected among others by provision fee for syndicated loan and lower M.video dividend (-4 €m yoy)

Higher tax rate due to anticipated restructuring expenses; benefits related to acquisition of MMS minority stake not yet included

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Adjusted Free Cash Flow slightly below PY due to lower NWC inflow, while tax refunds and lower investments were supportive

Free Cash Flow in Q1 20/21

(in €m)

Yoy change

+11	-262	+41	+79	+39	-92	+16	-76
	856	12			1,329
		Capital gains tax	-26
		-35
		refund	Other OCF in PY			1,196
			PY included
			negatively		-133
521			impacted by	investment in
		reversal of non-	Greek JV;
			cash effect	investments for
	Lower increase		related to Greek	modernization
	in trade liabilities		transaction	and expansion
	(reflecting			slightly below PY
	temporary store
	closures from mid-
	Dec 2020 and high
	starting point on 30
	Sep 2020)
EBITDA	NWC	TAX	OTHER	CASH INVESTMENTS	FREE CASH FLOW	LEASE REPAYM.	LEASE ADJ. FCF 1

1Lease adjusted FCF subtracts the repayment of lease liabilities for better FCF comparability under IFRS 16.

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Outlook for FY 20/21 subject to significantly increased uncertainties due to prolonged temporary store closures

Initial assumptions1

• No further extensive temporary closures of the stationary business
• No serious deterioration of consumer confidence
• Supply chains remain largely intact

1As communicated on 15 December 2020.

Knowns

• Q1 results are a major step to reach FY guidance
• In- and outbound logistics impacted

Unknowns

• Duration of the pandemic & associated length of temporary store closures
• Possible effects on consumer demand

Current outlook

• Near-termtrading remains challenging
• Uncertainty for the further business development and outlook in FY 20/21 has increased significantly

Date: 15 Dec 2020	// 19
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Key take-aways

• Successful peak season and strong resilience against COVID-19 headwinds
• Uncertain environment characterized by challenging operating conditions
• Relentless focus on pursuit of our strategy and execution of our transformation

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Q&A

Dr Bernhard Düttmann	Karin Sonnenmoser
CEO	CFO

Date: 15 Dec 2020	// 21
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Contact

CECONOMY AG

Investor Relations

Kaistr. 3

40221 Düsseldorf

Germany

PHONE +(49) 211 5408-7222

[e-mail]

https://www.ceconomy.de/en/investor-relations/

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Net Working Capital

€m	30/09/2019	31/12/2019	Change	30/09/2020	31/12/2020	Change
Inventories	2,548	3,348	801	2,949	3,668	719
Trade receivables and similar claims	455	543	87	488	493	4
Receivables due from suppliers	1,295	1,851	556	1,302	1,834	532
Trade liabilities and similar liabilities	-5,321	-7,857	-2,536	-5,996	-8,109	-2,113
Net Working Capital	-1,023	-2,115	-1,092	-1,256	-2,114	-858

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Store network

	30/09/2020	Openings	Closures	31/12/2020
Germany	425	-	-5	420
Austria	53	-	-	53
Switzerland	25	-	-	25
Hungary	32	-	-	32
DACH	535	-	-5	530
Belgium	27	-	-	27
Italy	117	-	-	117
Luxembourg	2	-	-	2
Netherlands	50	-	-	50
Portugal	10	-	-	10
Spain	88	1	-	89
Western/S. Europe	294	1	-	295
Poland	88	-	-	88
Turkey	78	2	-	80
Eastern Europe	166	2	-	168
Sweden	28	-	-	28
Others	28	-	-	28
CECONOMY	1,023	3	-5	1,021

3 store openings, thereof 1 store in Spain and 2 stores in Turkey

5 store closures in Germany

Average store size reduced by

-0.7% to 2,584 sqm at the end of December 2020 vs. September 2020

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Status on COVID-19 lockdowns by country (as of 8 February 2021)

	# stores as of
Germany	31/12/2020	Opened stores	Closed stores
420	-	420
Austria	53	53	-
Switzerland	25	-	25
Hungary	32	32	-
DACH	530	85	445	52% of our stores are currently
Belgium	27	27	-
opened
Italy	117	1171	-
Luxembourg	2	2	-
Netherlands	50	-	50
Portugal	10	10	-	48% of our stores are still
Spain	89	89	-
temporary closed
Western/S. Europe	295	245	50
Poland	88	88	-
Turkey	80	802	-
Eastern Europe	168	168	-
Sweden	28	28	-
Others	28	28	-
CECONOMY	1,021	526 (52%)	495 (48%)

1Italy: Stores in shopping centres closed on weekends, holidays and pre-holidays (affecting 87 stores). 2Turkey: Stores closed on weekends.

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Financial calendar

Annual General	Q2/H1 2020/21	Q3/9M 2020/21
Meeting	results	results
17 FEBRUARY 2021	11 MAY 2021	12 AUGUST 2021

Q4/FY 2020/21	FY 2020/21
trading statement	results
26 OCTOBER 2021	14 DECEMBER 2021

Date: 15 Dec 2020	// 26
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Upcoming events

Morgan Stanley	Baader Bank
Virtual Roadshow post-Q1	Virtual Roadshow post-Q1
11 FEBRUARY 2021	11 MARCH 2021

Date: 15 Dec 2020	// 27
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Date: 15 Dec 2020

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