Fnac Darty: Q3 2023 revenue
Ivry-sur-Seine, October 26, 2023,
5:45 p.m. CEST
Continued implementation of the strategic
plan Everyday
Resilience of revenue in Q3 2023 in a
deteriorated environment
2023 Current operating income expected to
be around €180 million1
- Q3 2023
revenue stable at €1,840 million, -0.5% on a reported
basis and -0.1% on a like-for-like basis² compared to Q2 2022
- Sales for
the first nine months of the year at €5,184 million,
-1.8% on a reported basis and -1.5% on a like-for-like basis2
compared to 9m 2022, impacted by poor second quarter
performance
- Gross
margin rate of 30.4%, up +40 bps over the first nine
months of the year, excluding dilutive impact from franchise
- Agreement
for the creation of a joint venture dedicated to e-commerce
logistics and SaaS Marketplace with CEVA Logistics
- Closing of
the acquisition of MediaMarkt in Portugal, which is consolidated
from 1 October 2023
- Positive
ruling from the Court of Appeal in London in the Comet
disposal
- Launch of
a €20 million share buyback program
Enrique Martinez, Chief Executive
Officer of Fnac Darty, declared:
“Fnac Darty sales were stable in the
third quarter, outperforming its respective markets in an
environment that remains under inflationary pressure and marked by
a deteriorated consumer confidence. We are continuing to
successfully implement our strategic plan Everyday: Darty Max, our
trademark unlimited repair service, passed
the million-subscribers mark and we have signed an ambitious
agreement with CEVA Logistics, a subsidiary of CMA-CGM, to create
an e-commerce logistics joint venture.
These milestones demonstrate the Group’s agility
in successfully delivering its structural services and logistics
projects while at the same time preparing for the year-end’s major
sales events.
We are confident about the fourth quarter, but
we are more cautious about the rebound in consumption initially
anticipated. We are maintaining our efforts to deliver a current
operating income in the second half of 2023 in line with that of
the second half of 2022.”
Q3 2023 REVENUE AND CUMULATIVE REVENUE OVER THE FIRST 9
MONTHS OF 2023
|
|
|
|
|
|
|
|
|
Q3 2023 |
Change vs. Q3 2022 |
|
9M 2023 |
Change vs. 9M 2022 |
|
|
In €m |
Reported |
Like-for-like basis2 |
|
In €m |
Reported |
Like-for-like basis2 |
|
|
France and
Switzerland |
1,526 |
-0.1% |
+0.4% |
|
4,292 |
-1.8% |
-1.5% |
|
Iberian
Peninsula |
160 |
-5.2% |
-5.7% |
|
453 |
-4.6% |
-4.8% |
|
Belgium and
Luxembourg |
154 |
+0.7% |
+1.4% |
|
439 |
+1.7% |
+1.6% |
|
Group |
1,840 |
-0.5% |
-0.1% |
|
5,184 |
-1.8% |
-1.5% |
|
Sales analysis
After a first half of the year down by -2.3%1,
sales in the third quarter reached €1,840 million at -0.5% on
a reported basis and -0.1% on a like-for-like basis1 stable in a
market environment still impacted by inflationary pressures.
Over the first nine months of the year, the
Group’s revenue reached €5,184 million, -1.8% on a reported
basis and -1.5% on a like-for-like basis3.
The strong performance of in-store sales in the
period partially offset the drop in the digital business, which
represented 21% of the Group’s total sales. However, the level of
online sales remained +3 points higher than in 2019. The
omnichannel model represented 50% of total online sales in the
first nine months of the year.
Changes by product category
During this quarter, editorial
products continued to benefit from the good momentum of
gaming and books, driven by an attractive line-up and the Culture
Pass in France. Services continued to grow,
benefiting from steady growth in the Darty Max/Vanden Borre Life
subscriber base. The service offer passed
the million-subscribers mark in September, in line with the
strategic plan Everyday aim of 2 million subscribers by
2025.
Domestic appliances sales
declined, having reached a particularly high level in previous
years. The drop in volumes was mainly concentrated in the
entry-level segments for large domestic appliances. However, this
category continued to record slight growth compared with 2019.
Trends in consumer electronics
varied greatly by product category. Sound (mainly headphones) and
television performed well during Q3. IT and telephony declined,
albeit with a high comparison basis. Lastly,
diversification categories were driven by the toys
and games and stationery segments, while urban mobility still
experienced a slowdown.
Changes by region
Sales in France and Switzerland
reached €1,526 million in the third quarter, up +0.4% on
a like-for-like basis1 compared with the third quarter of 2022,
and €4,292 million for the first nine months, down
-1.5% on a like-for-like basis1. Performance in the third quarter
was notably driven by an extra week of sales in July, as well as
the positive impact of the Culture Pass in France and the ongoing
development of services, particularly Darty Max.
Iberian Peninsula revenue stood
at €160 million for the third quarter, down -5.7% on a
like-for-like basis2 compared with the third quarter of 2022, and
€453 million for the first nine months, down -4.8% on a
like-for-like basis4, against a backdrop of very high inflation and
competitive pressure, especially in Spain.
Revenue for the Belgium and
Luxembourg region was €154 million in the third
quarter, up +1.4% on a like-for-like basis1 compared with the third
quarter of 2022, and €439 million for the first
nine months, up +1.6% on a like-for-like basis1. The slowdown
in business mainly reflected an increased competitive pressure.
Gross margin rate
Driven mainly by the growing positive impact of
services linked to Darty Max and a more favorable product mix, the
Group's gross margin rate rose by +70 basis points in Q3 and by +40
basis points over the first nine months of the year, excluding
dilutive impact from franchise.
CONTINUED IMPLEMENTATION OF THE STRATEGIC PLAN
EVERYDAY
Reinforced position as European leader
in omnichannel retail
The Group strengthened its position as a major
player in omnichannel retail through innovative partnerships with
leading companies.
A partnership agreement with Rakuten France,
signed in September, allowed Darty to increase its web presence and
to reach around 15 million new users each month.
On October 4, Fnac Darty announced that it
had signed an agreement with CEVA Logistics for the creation of a
joint venture dedicated to e-commerce logistics and SaaS
Marketplace. This innovative offering would meet all the needs of
e-commerce players, such as the complete management of
marketplaces, direct sales to consumers and omnichannel delivery.
This new partnership demonstrates the determination of the two
groups to strengthen their position in an addressable European
market valued at around 80 billion euros5, with growth estimated at
over 10% a year. Over the next 5 years, the joint venture could
generate more than €200 million revenue, with a double-digit
operating margin. The envisaged cooperation would take the form of
a 50-50 joint venture between Fnac Darty and CEVA Logistics,
operational from 2024, subject to approval by the relevant
authorities.
Leader in home assistance services
promoting more sustainable and responsible consumption
The trademark Darty Max unlimited repair
service, which generates recurring cash flow, recently passed the
million-subscribers mark, with a target of two million by 2025. To
achieve its ambition, the Group is continuing to develop
acquisition channels and external partnerships, while relying on
the expertise of its 2,500 specialist technicians.
A pioneer in the circular economy and the
leading repairer in France, Fnac Darty has published the sixth
edition of its After-Sales Service Barometer. This tool provides a
reference framework for consumer purchase decisions, creating a
unique overview of the repairability and reliability of more than
150 brands, thanks to their associated sustainability
scores.
As part of its ongoing commitment to
sustainability, Fnac Darty is strengthening its assistance
solutions with the launch of "Fnac Vie Digitale", a subscription
service aimed at supporting consumers s in everything they need for
daily life in the digital world (device protection, the user
protection and advice).
These projects demonstrate the Group’s
acceleration toward high value-added services for its customers and
its transformation toward a service-based model.
ACQUISITION OF MEDIAMARKT IN PORTUGAL
On September 28, Fnac Darty announced the
completion of the 100% MediaMarkt acquisition in Portugal. Leading
retailer of electronic products and domestic appliances, MediaMarkt
employs around 450 people and operates 10 stores as well as
its own website. In financial year 2021-2022, MediaMarkt Portugal
recorded sales of c. €140 million. With this acquisition, the Group
consolidates its number 2 position in Portugal. The operation is an
opportunity to accelerate growth in its historic businesses,
diversify and develop in the large and small domestic appliances
categories, as well as strengthen its services and improve its
global efficiency.
COURT OF APPEAL IN LONDON RULES IN FAVOR OF
FNAC DARTY IN PROCEEDINGS RELATING TO THE DISPOSAL OF
COMET
In early October, the Court of Appeal in London
unanimously allowed an appeal by Darty Holdings SAS (Darty), a
subsidiary of the Fnac Darty group, in the context of litigation
relating to the disposal of Comet Group Limited in 2012. Now that
the Court of Appeal has overturned the High Court’s first instance
decision, the Group should be entitled to repayment of all sums
paid by Darty before the end of the year, as well as the
reimbursement of interest and legal costs incurred, representing a
positive cash impact estimated at around €130
million.IMPLEMENTATION OF A SHARE BUYBACK PROGRAM FOR
€20M6
At its meeting on October 26, 2023, the Board of
Directors decided to implement the share buyback program approved
by the General Meeting of May 24, 2023, for the purpose of
allocating performance shares.Fnac Darty will appoint an investment
services provider (ISP) to acquire a maximum of €20 million. This
decision reflects the management's confidence in the Group's
operating performance, free cash flow generation and future
prospects.A description of the share buyback program is provided in
the 2022 Universal Registration Document (Chapter 7.2.3.2)
available on the company's website.
SHAREHOLDERS
On October 26, 2023, the Autorité des Marchés
Financiers announced that it had been informed by letter dated
October 25, 2023, that Indexia had fallen below the 10% and 5%
thresholds, declaring that it no longer holds any Fnac Darty
shares. At the same time, the Autorité des Marchés Financiers
announced that it has been informed by letter dated 25 October 2023
that the 5% and 10% thresholds have been exceeded by GLAS SAS,
acting as security agent, and that it held 3,026,422 Fnac Darty
shares representing 10.89% of the share capital.
OUTLOOK
After posting a stable activity in the third
quarter and in a deteriorated consumer environment, Fnac Darty
is cautious about the rebound in consumer consumption initially
anticipated. Nevertheless, the Group is confident in its ability to
achieve a good level of activity in Q4 2023 driven by the year-end
major sales events, Black Friday and Christmas.
Thanks to its ongoing performance plans to limit
inflation in operating costs, the current operating income for H2
2023 is expected to be in line with that of H2 2022. Current
operating income for the full year 2023 is therefore expected to be
around €180 million7.
In addition, the Group reiterates that it is
still targeting an operating investment budget for 2023 of around
€120 million. Lastly, Fnac Darty is continuing to implement its
Everyday strategic plan to achieve its targets of cumulative free
cash-flow from operations8 of approximately €500 million over the
2021–2024 period, and at least €240 million annually from 2025.
***
2023 THIRD-QUARTER REVENUE
Enrique Martinez, Chief Executive
Officer, and Jean-Brieuc Le Tinier, Group Chief
Financial Officer, will host a conference call in French
(simultaneous translation into English) for investors and analysts
on Thursday October 26, 2023 at 6:30 p.m. (CEST); 5:30
p.m. (UK); 12:30 p.m. (East Coast USA).
The presentation will be broadcast live, and you will be able to
access it by clicking on the following link: here
In French
For people wishing to connect to the conference call in French
and ask questions by phone: France: +33 (0)1 70 91 87 04
In English
For people wishing to connect to the conference call in English
and ask questions by phone: UK: +44
(0)1 212 818 004; USA:
+1 (0)718 705 8796
Replay
Replays, in French and English, will be available on the website
www.fnacdarty.com/en.
CONTACTS
ANALYSTS/INVESTORSDomitille
Vielle — Head of Investor Relations —
domitille.vielle@fnacdarty.com —
+33 (0)6 03 86 05 02Laura Parisot —
Investor Relations Manager — laura.parisot@fnacdarty.com —
+33 (0)6 64 74 27 18
PRESSAudrey Bouchard — Head of
Media Relations and Reputation — audrey.bouchard@fnacdarty.com –
+33 (0)6 17 25 03 77
APPENDIX — STORE NETWORK
|
Dec. 31, 2022 |
Opening |
Closure |
Sep. 30, 2023 |
France and Switzerland* |
826 |
15 |
7 |
834 |
Traditional Fnac |
96 |
1 |
2 |
95 |
Suburban Fnac |
17 |
0 |
0 |
17 |
Travel Fnac |
36 |
2 |
0 |
38 |
Proximity Fnac |
79 |
1 |
0 |
80 |
Fnac Connect |
7 |
0 |
0 |
7 |
Darty |
486 |
11 |
4 |
493 |
Fnac/Darty France |
1 |
0 |
0 |
1 |
Nature & Découvertes** |
104 |
0 |
1 |
103 |
Of which
franchised stores |
414 |
15 |
2 |
427 |
|
|
|
|
|
Iberian Peninsula |
75 |
4 |
1 |
78 |
Traditional Fnac |
53 |
0 |
0 |
53 |
Travel Fnac |
2 |
2 |
0 |
4 |
Proximity Fnac |
16 |
2 |
0 |
18 |
Fnac Connect |
4 |
0 |
1 |
3 |
Of which franchised stores |
6 |
0 |
0 |
6 |
|
|
|
|
|
Belgium and Luxembourg |
86 |
1 |
1 |
86 |
Traditional Fnac*** |
13 |
0 |
0 |
13 |
Proximity Fnac |
1 |
0 |
0 |
1 |
VDB (Darty) |
72 |
1 |
1 |
72 |
|
|
|
|
|
Fnac Darty Group |
987 |
20 |
9 |
998 |
Traditional Fnac |
162 |
1 |
2 |
161 |
Suburban Fnac |
17 |
0 |
0 |
17 |
Travel Fnac |
38 |
4 |
0 |
42 |
Proximity Fnac |
96 |
3 |
0 |
99 |
Fnac Connect |
11 |
0 |
1 |
10 |
Darty |
558 |
12 |
5 |
565 |
Fnac/Darty |
1 |
0 |
0 |
1 |
Nature & Découvertes |
104 |
0 |
1 |
103 |
Of which
franchised stores |
420 |
15 |
2 |
433 |
* Including 12 foreign Fnac stores: 1 in Saudi
Arabia, 1 in Cameroon, 1 in Congo, 2 in Ivory Coast, 3 in Qatar, 2
in Senegal and 2 in Tunisia, and 2 foreign Darty stores in Tunisia;
18 stores in the French overseas territories. Excluding Fnac
shop-in-shops opened in Manor stores.** Nature & Découvertes
and its subsidiaries are managed from France. This includes 4
stores in Belgium, 1 in Luxembourg, 7 franchised stores in
Switzerland and 1 franchised store in Portugal as well as 5
franchised stores in French overseas territories: 1 in Martinique,
1 in Réunion, 1 in Guadeloupe, 1 in New Caledonia, 1 in French
Guiana*** Including 1 store in Luxembourg, which is managed from
Belgium.
1Compared with the guidance of “around €200 million”
communicated on February 23, 2023
2 Like-for-like basis excludes effect of changes
in foreign exchange rates, changes in scope, store openings and
closures.3 Like-for-like basis excludes effect of changes in
foreign exchange rates, changes in scope, store openings and
closures.4 Like-for-like basis excludes effect of changes in
foreign exchange rates, changes in scope, store openings and
closures.2 Europe's e-commerce logistics market according to Global
e-commerce Logistics 2023 - Ti Research - March 2023
6 The implementation of these buybacks, their
duration as well as the final amounts thus repurchased will depend
on market conditions. Fnac Darty reserves the right to change all
or part of the terms of the program, with the described limits.7
Compared with the guide figure of “around €200 million”
communicated on February 23, 20238 Excluding IFRS 16.
- Fnac_Darty_PR_Q3 2023_26102023_vdef
Grafico Azioni Fnac Darty (EU:FNAC)
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