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    FNAC   FR0011476928

FNAC DARTY

(FNAC)
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Fnac Darty : 2020 performance that confirms the power of Fnac Darty's omnichannel model in a year of unprecedented crisis

02/23/2021 | 12:32pm EDT

Ivry, February 23, 2021

2020 performance that confirms the power of Fnac Darty's omnichannel model in a year

of unprecedented crisis

Proposal to pay a dividend of €1 per share for 2020

Announcement of the strategic plan Everyday

  • Revenues at €7,491 million in 2020, up +1.9% in reported data and +0.6% on a like-for-like basis1, driven by strong growth in sales in the 4th quarter to +9.6% on a like-for-like basis1

  • Very strong momentum on the digital side in 2020: growth of more than +55% in online sales, representing 29% of the Group's revenues, and a gain of more than 5 million new active online customers

  • Demonstrated relevance of the omnichannel model with an increase of close to 30% in the volume of click & collect orders processed in 2020

  • Net income from continuing operations, Group share, at €96 million in 2020, down -€19 million from 2019

  • Reactivation of the shareholder return policy with the proposed payment of an ordinary dividend of €1.00 per share for the year 20202

  • Trend in cumulative revenues in mid-February 2021 equivalent to that seen in the 4th quarter of 2020

Enrique Martinez, Chief Executive Officer of Fnac Darty, declared: "I am extremely proud of the work done by the Group's teams throughout 2020 and of their commitment in the face of the immense challenges that we faced. The strength and suitability of our omnichannel model enabled us to deliver strong performances this year. This performance now allows us to repay the state-guaranteed loan obtained last April from our banks. This will be repaid by April 2021. I would once again like to thank government representatives-in particular the Bercy teams-for the quality of the measures made available to companies to help them deal with the exceptional situation arising from the COVID-19 crisis.

In addition, in accordance with the dividend policy announced in February 2020, we have decided to reactivate the shareholder returns policy with the proposed payment of an ordinary dividend of €1.00 per share, starting this year, for 2020."

1 Like-for-like data: excludes the effect of changes in foreign exchange rates and scope of consolidation, and directly owned-store openings and closures. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

2 Submitted to a vote at the General Meeting on May 27, 2021.

KEY FIGURES

(€ millions)

2019

2020

Change

Revenues

7,349

7,491

+1.9%

Change on like-for-like basis1

+0.6%

Current operating income (COI)

293

215

-€78m

Net income from continuing operations, Group share2

115

96

-€19m

Free cash flow from operations, excluding IFRS 163

173

192

+€19m

2020 HIGHLIGHTS

Growth in 2020 revenues in the context of an unprecedented health crisis

Fnac Darty's 2020 revenues totaled €7,491 million, up +0.6% on a like-for-like basis1.This performance was

achieved in the context of an unprecedented health crisis marked, in particular, by two lockdown periods. During the first lockdown (March 15 - May 10, 2020), almost all the Group's stores were closed and online sales increased sharply thanks to the agility and power of the Group's centralized logistics and delivery capacities.

During the second lockdown (October 29 - November 28, 2020), online and click & collect sales were available for all products, easing the impact of the closure on departments deemed non-essential in stores. Over the year as a whole, the solid growth in online sales of more than +55%, driven primarily by the gain of over five million new active online customers and the power of the omnichannel model, more than offset the decline in footfall in stores.

Additional revenues related to the consolidation of Nature & Découvertes4 over a full year amounted to €83 million in 2020.

The gross margin rate reached 29.2% in 2020, down -120 basis points from 2019, primarily due to an unfavorable product mix effect of -80 basis points linked to a drop in footfall in-store, which particularly penalized editorial products that are very sensitive to impulse purchases and a sharp increase in sales of consumer electronics.

Ticket sales, which fell sharply, impacted the gross margin rate by -45 basis points. Finally, the consolidation of Nature & Découvertes over a full year offset the decline in other retail services impacted by drop in footfall in stores.

Current operating income totaled €215 million in 2020, down -€78 million over one year. After an operating loss recorded in the first half, primarily tied to the health crisis, good control of operating costs and the full effect of the readjustment plans helped Fnac Darty maintain an operating margin in the second half of 2020 that was stable with respect to the second half of 2019. The consolidation of Nature & Découvertes over a full year in 2020 had a negative impact of -€16 million on 2020 current operating income for the period due to the normal

season activity of the brand.

1 Like-for-like data: excludes the effect of changes in foreign exchange rates and scope of consolidation, and directly owned-store openings and closures. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

  • 2 Operations in the Netherlands are recognized as discontinued operations, following the application of IFRS 5.

  • 3 Excluding IFRS16. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

  • 4 Nature & Découvertes has been consolidated since August 1, 2019.

Net income from continuing operations, Group share, was €96 million in 2020 versus €115 million in 2019. The limited decline primarily represents the reduction in non-current items, financial expenses and the tax liability compared with 2019.

Fnac Darty continued strong generation of free cash flow from operations1 at €192 million in 2020, up +€19 million from 2019.

A group committed to and recognized for corporate social responsibility

In the context of the unprecedented Covid-19 health crisis, the Group's priority was to guarantee the health and safety of the employees and customers by implementing the best protection measures, ahead of legal obligations. Good management of this crisis was therefore based on the adoption of collective and organized measures, which was possible thanks to the quality of social dialogue within the Group to ensure business continuity. All the measures taken by the Group, which helped to contain the number of infections, were praised by the customers of the banners, but also by the different administrations whose control inspections were all conclusive. Fnac Darty was able to demonstrate its agility and capacity for rapid adaptation in a changing environment to meet the consumers' urgent need to be equipped for working and learning from home.

Despite the atypical context that prevailed in 2020, the Group pursued its initiatives to become a major player in the circular economy, and a promoter for extending the life span of the products. Fnac Darty therefore continued the roll-out of its new repair subscription service, Darty Max, launched in October 2019, and designed to extend the life span of large household appliances. This service carries on the Group's longstanding commitment to responsible consumption. At the end of 2020, around 200,000 customers had subscribed to this service, and several thousand appliances had been repaired each month thanks to Darty Max, representing tens of tons of waste prevented.

The Group also pursued its initiatives in supporting its customers toward an educated choice and sustainable consumption with the launch of the third edition of the "after-sales service barometer" in September 2020, which is designed to give the public better information about the life span of 63 product families from the universe of appliances and multimedia, compared with 15 the previous year. This new edition, available to all our customers on our websites and in stores, now has a sustainability score, easily identifiable, aggregating both reliability and reparability criteria - an innovation that allows all categories of products to be compared with each other and for a comparison to be made between the brands. The Group has also used this sustainability score to expand the selection of products with the Darty Sustainable Choice label, which now includes 152 products (83 large appliances and 69 small appliances). Implemented in all Darty stores, this new information is based on two criteria: the availability of spare parts for at least ten years, and the low breakdown rate of the product with respect to its price category. Finally, the Darty Occasion recycling scheme has been extended to include cold-category appliances, including refrigerators and freezers, in order to give a second life to all types of electronic products and appliances offered and to boost the Group's positioning in this growth market.

All these initiatives in societal and environmental responsibility were recognized by the extra-financial ratings agencies in 2020. Fnac Darty thus earned a score of 48/100 from Vigeo Eiris this year, up +4 points from 2019, and confirmed its positioning in the "Outperformer" classification of Sustainalytics with a score of 68/100, along with its AA rating from MSCI. Finally, the Carbon Disclosure Project (CDP), the international benchmark in environmental transparency for businesses, gave Fnac Darty a rating of C, in line with the average for the sector.

In addition, Fnac Darty ensures that these challenges are fully incorporated into the Group's strategy, and adopts a decentralized approach to CSR by involving all the business lines daily through the nomination of a CSR referee, the creation of roadmaps with the definition of objectives specific to each department of the Group, and regular

1 Excluding IFRS16. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

monitoring of those objectives. Finally, Fnac Darty has continued to strengthen the integration of CSR criteria in the variable compensation of all Group managers in addition to an increase in the weight of these criteria for members of the Executive Committee.

Fnac Darty's unique and highly agile omnichannel model and solid business execution

The year 2020 was marked by the Covid-19 crisis and its spread around the world overwhelmed all business sectors, including retail. While guaranteeing the health and safety of its employees and customers, Fnac Darty then demonstrated its capacity for rapid adaptation and its operational agility in order to continue its service, delivery and after-sale service activities.

Fnac Darty first had to face a supply crisis related to production delays generated by disturbances in the industrial bases in China following the arrival of the epidemic on Chinese territory at the beginning of the year. The Group had to adapt its merchandise purchasing policy to deal with production delays and develop a tactical purchasing plan for categories of key products in close collaboration with its suppliers.

Starting in March, the pandemic spread across Europe, leading to the implementation of lockdown measures by all governments in the countries in which Fnac Darty does business. These measures led to the closure of almost all the Group's stores, representing 80% of the Group's normal revenues, from March 15 through May 10, resulting in a total shutdown of in-store sales. Backed by the centralized organization of its logistics platforms and the strength of its digital platforms, the Group was able to quickly adapt its model and meet the very high demand thanks to the unfailing commitment of its teams and the rapid reassignment of resources to digital capacities and service activities. The Group also relied on its partnership ecosystem of delivery providers and its in-house delivery capabilities, which allowed it to ensure delivery times in line with the highest market standards.

At the same time, another Fnac Darty priority was to protect the Group's profitability and liquidity. 80% of its workforce was furloughed following the closure of the store network during the first lockdown. The Group adjusted its rent payments, shifted the payment of taxes and social security deductions, and established a policy of targeted merchandise and inventory purchases. The Group also negotiated longer payment terms with its suppliers in accordance with the French law on economic modernization (known as the "LME"). The investment plan was revised downward, while preserving the Group's priority projects. Finally, Fnac Darty was one of the first issuers in France to receive a €500 million State-Guaranteed Loan in April.

At the end of the first lockdown required by governments, the Group began to progressively reopen its stores. Almost all stores in France, Switzerland and Belgium reopened the week of May 11, while stores in Portugal re-opened on May 15. In Spain, stores reopened very gradually throughout the month with the last of them opening at the end of the first week in June. In line with its commitment to ensure the health and safety of its employees, partners and customers, Fnac Darty implemented all necessary health measures to ensure the successful reopening of its stores, which was permitted thanks to the advance preparation of employees and their unfailing commitment.

The Group's quality relationship with its suppliers and the solid commercial capacity of its teams allowed it to obtain a good level of product availability throughout the year and to meet the high demand in categories of products related to telecommuting, at-home learning, gaming and home equipment.

Faced with the increased spread of the virus in October 2020, new lockdown measures were implemented in France from October 29 to November 28, resulting in the closure of the departments of product categories deemed non-essential by the Government (editorial products including books, large appliances, games & toys). All Fnac and Darty stores remained open in France during this period for the sale of consumer electronics, small household appliances and urban mobility, which represented more than 60% of normal product sales. For the

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Fnac Darty SA published this content on 23 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 February 2021 17:31:00 UTC.


© Publicnow 2021
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Sales 2021 7 663 M 9 130 M 9 130 M
Net income 2021 128 M 152 M 152 M
Net Debt 2021 432 M 515 M 515 M
P/E ratio 2021 11,8x
Yield 2021 2,61%
Capitalization 1 444 M 1 721 M 1 721 M
EV / Sales 2021 0,24x
EV / Sales 2022 0,22x
Nbr of Employees 22 350
Free-Float 62,6%
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Mean consensus BUY
Number of Analysts 8
Average target price 62,88 €
Last Close Price 54,10 €
Spread / Highest target 25,7%
Spread / Average Target 16,2%
Spread / Lowest Target -3,88%
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Managers and Directors
NameTitle
Enrique Martinez Ballesteros Chief Executive Officer & Director
Jean-Brieuc-Pierre Le Tinier Group Chief Financial Officer
Jacques Veyrat Chairman
François Gazuit Operations Director
Carole Gabriella Ferrand Independent Director
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