Ceconomy : Trading Statement Q4/FY 2019/20

TRADING STATEMENT Q4/FY 2019/20

STRONG FINISH TO THE FINANCIAL YEAR: CECONOMY WITH CONTINUED GOOD TOPLINE MOMENTUM AND BETTER THAN EXPECTED RESULTS IN THE FOURTH QUARTER

Düsseldorf, 23 October 2020

• Strong sales performance continued in Q4 (+10%1,3), especially thanks to sustained demand for work-from-home equipment and home appliances as well as successful online activities
• Online business with marked increase of +54%2,3 in Q4, while brick & mortar sales also developed positively, jointly demonstrating the strength of the omni-channel model
• Full-yearsales only slightly below prior year (-2%1) despite more than six weeks of COVID- 19 related store closures
• Full-yearadjusted EBIT excl. associates at around 230 €m - well above guidance
• Sales momentum has continued into Q1 so far, but uncertainties around COVID-19 obviously remain; focus now lies on the upcoming crucial holiday season
• Strategy update scheduled for 15 December 2020 along with the full-year results presentation

"We have successfully managed this unprecedented time and ended the financial year better than expected. The crisis has prompted more people to make their lives at home more productive, entertaining and enjoyable. We are the go-to-destination to satisfy these needs. This is well reflected in our strong online performance and the recovery of stationary sales since the end of the lockdown. Obviously, uncertainties around COVID-19 and the wider economic outlook remain. Our focus now lies on continuing to offer customers a safe and pleasant shopping experience during the upcoming peak season. We enter the coming months with great respect, but also with self-confidence,"Bernhard Düttmann, CEO of CECONOMY.

Q4 2019/20 preliminary results

• Sales adjusted for currency effects and portfolio changes increased by +7.6% (+7.9% on a like-for-like basis), driven by sustained strong customer demand, successful campaigns and continued good online momentum; underlying sales grew by even +9.8%1,3

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TRADING STATEMENT Q4/FY 2019/20

_Countries: All countries except Luxembourg posted a year-on-year increase in sales; Germany, Turkey and Austria performed particularly well

_Product categories: Demand was especially strong for work-from-home equipment, home appliances and TVs, while demand for other brown goods, entertainment products and photo was below the prior year's level

• Online sales increased by +35%2 yoy to 16.1% of total sales; underlying online sales grew by even +54%2,3 yoy; pick-up rate stabilized at around 39%
• Brick & mortar sales developed positively thanks to higher checkout value and increase in conversion rates; store traffic levelling recently at around -15% yoy
• Services & Solutions sales decreased by -23%2 yoy, accounting for 4.7% of total sales; underlying sales came in at -5%2,3 yoy; services at in-store "Smartbars" and extended warranties developed positively, while the GSM mobile and other contract business faced a high comparison basis due to strong campaigns in the prior year
• Adjusted EBIT excl. associates at around 120 €m (Q4 18/19: 151 €m); strong sales performance supported the result, while the gross margin was lower than prior year, but with a trend improvement compared to 9M

FY 2019/20 preliminary results

• Sales adjusted for currency effects and portfolio changes with -1.8% only slightly below the prior year's level (-1.4% on a like-for-like basis), reflecting the adverse impact of the COVID- 19-related store closures, which was almost offset by the strong recovery since stores reopened and the solid sales development in the first five months (Oct-Feb)
• Online sales with an exceptional increase of +44%2 yoy to 4.2 €bn or 20.2% of total sales, thanks to the increased focus of sales activities and resources on the online channel; more than 6 million new webshop customers registered across the Group in the full year
• Services & Solutions sales declined by -8%2 yoy to 5.4% of total sales, largely due to the COVID-19-related store closures and lower store traffic since the end of the lockdown
• Adjusted EBIT excl. associates at around 230 €m (FY 18/19: 403 €m); the decline is the consequence of the lockdown of the stationary business in March and April and a negative margin development resulting mostly from a COVID-19-induced channel shift, higher delivery costs and stock-related effects; the early and extensive measures in response to COVID-19 as well as the consequent implementation of the strategic initiatives had a positive effect on earnings

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TRADING STATEMENT Q4/FY 2019/20

Strategy Update: Save-the-date

• CECONOMY will present its strategy update, including the next steps in the company's transformation process, on Tuesday, 15 December 2020 at 10:00 am CET, together with the presentation of the full year 2019/20 results for analysts and investors
• In light of the current situation, the event including a Q&A session will be hosted virtually, via webcast

All figures reported herein are preliminary and unaudited. Full financial disclosure of the results for financial year 2019/20 will be published on 15 December 2020 at 07:00 CET.

Financial ratios: Further background regarding the financial ratios referred to may be found on pages 52 to 55 of the annual report for financial year 2018/19 and regarding the latest guidance in the quarterly report Q3/9M 2019/20 on page 7 - available at https://www.ceconomy.de/en/.

1. Fx- and portfolio adjusted sales growth
2. Excluding MediaMarkt Greece business (portfolio change)
3. Excluding 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

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TRADING STATEMENT Q4/FY 2019/20

APPENDIX

Preliminary sales development

								Sales adjusted for
								currency
								and portfolio	Like-for-like sales
		Sales (€ million)	Change	Currency effects	change effects	(local currency)
	Q4 2018/19	Q4 2019/20	Q4 2019/20	Q4 2019/20	Q4 2019/20	Q4 2019/20
Total	4,996	5,271		5.5%	-1.1%	7.6%*		7.9%
DACH	2,891	3,024		4.6%	-0.1%	4.7%*		5.1%
Western/Southern Europe	1,614	1,680		4.1%	0.0%	7.1%	7.0%
Eastern Europe	374	456		21.9%	-17.0%	38.9%	37.0%
Others	117	111		-4.6%	2.8%	-7.3%	4.4%

*Excluding 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, underlying Group sales in Q4 2019/20 came in at +9.8% and underlying sales in DACH at 8.4%

								Sales adjusted for
								currency
								and portfolio	Like-for-like sales
		Sales (€ million)	Change	Currency effects	change effects	(local currency)
	FY 2018/19	FY 2019/20	FY 2019/20	FY 2019/20	FY 2019/20	FY 2019/20
Total	21,455	20,831		-2.9%	-0.4%	-1.8%	-1.4%
DACH	12,565	12,323		-1.9%	0.0%	-1.9%	-1.5%
Western/Southern Europe	6,807	6,431		-5.5%	0.0%	-3.4%	-3.7%
Eastern Europe	1,567	1,611		2.8%	-6.9%	9.7%	7.8%
Others	516	465		-10.0%	-0.6%	-9.4%	5.5%

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TRADING STATEMENT Q4/FY 2019/20

Store network

	30/06/2020	Openings	Closures	30/09/2020
Germany	426	-	1	425
Austria	52	1	-	53
Switzerland	26	-	1	25
Hungary	32	-	-	32
DACH	536	1	2	535
Belgium	27	-	-	27
Italy	117	-	-	117
Luxembourg	2	-	-	2
Netherlands	50	-	-	50
Portugal	10	-	-	10
Spain	88	-	-	88
Western/S. Europe	294	-	-	294
Poland	88	-	-	88
Turkey	78	-	-	78
Eastern Europe	166	-	-	166
Sweden	28	-	-	28
Others	28	-	-	28
CECONOMY	1,024	1	2	1,023

Financial calendar

Q4/FY 2019/20 results & Strategy Update	Tuesday	15 December 2020
Q1 2020/21 results	Tuesday	9 February 2021
Annual General Meeting	Wednesday	17 February 2021
Q2/H1 2020/21 results	Tuesday	11 May 2021
Q3/9M 2020/21 results	Thursday	12 August 2021
Q4/FY 2020/21 trading statement	Tuesday	26 October 2021
Q4/FY 2020/21 results	Tuesday	14 December 2021

Contact

CECONOMY AG

Kaistr. 3

40221 Düsseldorf, Germany

Investor Relations

Telephone	[phone]
Email	[e-mail]
Website	https://www.ceconomy.de/en/investor-relations/

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TRADING STATEMENT Q4/FY 2019/20

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 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 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 2018/19, pages 52-55. 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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