FNAC Fnac Darty SA

Fnac Darty: Resilient business in 2023

FULL-YEAR RESULTS 2023Ivry-sur-Seine, February 22, 2024, 5:45 p.m. CET

Resilient business in 2023Current operating income in line with expectations at €171mFree cash-flow from operations1 of €180m

2023 PERFORMANCE

• Revenue stable at nearly €8 billion
• Current operating income of €171 million, in line with consensus, reflecting tight control over margin and costs
• Consolidated net income, Group share of €50 million, following the final closure of Comet disposal litigation in favor of the Group
• Free cash-flow from operations1 of €180 million, in line with the objectives of the strategic plan
• 1.1 million French people have placed their trust in Darty Max
• Dividend of €0.45 proposed to the Annual General Meeting of May 29, 2024

STRATEGIC INITIATIVES ROLLED OUT IN 2023

• Weavenn, the creation of a major player in the European e-commerce logistics and SaaS Marketplace
• Retail Link, the Group’s omnichannel retail media agency, ~€90m of revenue
• Roll-out of 2nd life products, ~€120m GMV (+30% vs 2022)

2024 OUTLOOKAt this stage, the Group remains attentive to the evolving macroeconomic situation

• Current operating income expected to be at least equal to that of 2023
• Cumulative free cash-flow from operations1 of €500 million for the period 2021-2024 confirmed

Enrique Martinez, Chief Executive Officer of Fnac Darty, declared:“In this unprecedented context of significant inflationary pressure, Fnac Darty has been able to accelerate the profound transformation of its digital customer and service model.

Our unique positioning, supported by strong brands, makes us a key partner in meeting the needs of our customers and our 11 million subscribers worldwide.

2023 has been dominated by great momentum in our innovation projects, particularly in using artificial intelligence to improve our customer service and our websites performances.

We have pursued our commitment towards products sustainability through the very strong growth of our Darty Max subscription model, which now has more than one million subscribers, the accelerated development of our training program for repair technicians, who have fixed 2.5 million products, and the considerable growth in our Second Life business.

Finally, 2023 saw us finalize two growth-generating projects: the integration of MediaMarkt's activities in Portugal, which significantly strengthens our position in the country, and the signing of an agreement with Ceva Logistics to create Weavenn, a joint venture dedicated to e-commerce logistics.

I would like to thank our employees for these successes, as they undertake to work hard every day to support and promote responsible consumption. Together, we are approaching 2024 with enthusiasm as it brings unique celebrations: the Olympic and Paralympic Games, 50 years of Darty’s “Contrat de confiance” and 70 years of Fnac.”

FULL-YEAR RESULTS 2023 IN LINE WITH EXPECTATIONS

(in €m)	2022	2023	Change
Revenue	7,949	7,875	(0.9)%
Change on a like-for-like basis2			(1.1)%
Gross margin	2,410	2,380	(30)
As a % of revenue	30.3%	30.2%	(10) bps
Current EBITDA	580	533	(47)
Current operating income	231	171	(60)
As a % of revenue	2.9%	2.2%	(70) bps
Net income from continuing operations, Group share – adjusted3	104	31	(73)
Net income from continuing operations, Group share	100	(75)	(175)
Free cash-flow from operations, excluding IFRS 16	(30)	180	+210

2023 was marked by a lack of visibility on business activity. The Group faced a high level of inflation, which had a significant impact on household purchasing power. Against this backdrop, Fnac Darty once again demonstrated its resilience, thanks to its strategic choices, its positioning as a key player in omnichannel retailing and its rigorous cost control.

2023 revenue was €7,875 million, almost stable compared to 2022 (down by -0.9% in reported data and by -1.1% on a like-for-like basis1). Once again, the Group demonstrated its ability to outperform the market, the volumes of which have fallen compared to 2022.

The gross margin rate reached 30.2% in 2023, stable compared to 2022 excluding the dilutive impact of the franchise. The negative impact of the product mix (growth in gaming and telephony) was offset by a positive impact in the channel mix (increase in in-store sales) and the growth in services.

Operating costs increased by €30 million amounting €2,209 million in 2023. Performance plans were strengthened to improve productivity and the investment plan for reducing energy consumption was rolled out. These did not offset inflation-related increases, in particular the increased cost of energy (+€21 million), rents and payroll costs. The Group has therefore limited the overall increase in its costs to just +1.4% compared to 2022 (compared with an average inflation in France of +4% in 20234).

Current EBITDA amounted to €533 million, €264 million of which related to the application of IFRS 16, down -€47 million compared to 2022.

Current operating income was €171 million at the end of December 2023, down by -€60 million compared to 2022. A particularly sharp drop in sales in Spain and for Nature & Découvertes in the fourth quarter accounted for half of this decline. The remainder reflects the increase in the Group’s operating costs. The operating margin rate was down, at 2.2%.

Changes by distribution channel

In 2023, in-store sales posted solid momentum, with 71 million checkout transactions, while online sales felt (22% of the Group’s total sales, down -1 point compared to 2022). Omnichannel sales continued to grow, accounting for 50% of the Group’s online sales, up by +1.6 points. The omnichannel model, the central element of Fnac Darty’s strategy, enabled the Group to support the implementation of the French Darcos Law 5 by perfectly addressing the changing needs of book-buying customers.

Changes by product category

Editorial products continued to post solid momentum, driven mainly by gaming and book sales. The kitchen business, boosted by increased brand awareness and a global network of 203 dedicated spaces, recorded strong growth. Services also continued to grow strongly, with an increase in the number of Darty Max subscribers and the launch of Fnac Vie Digitale.

Conversely, Domestic appliances recorded a slight increase in average selling prices, this did not compensate for the continuing decline in volumes. Consumer electronics recorded good momentum in telephony, audio and photography, which was not offset by the sharp decline in the television and IT equipment categories. These two categories saw their sales fall this year, still impacted by the high level of equipment seen during the pandemic and a lack of innovation in the PC market.

Changes by region

FRANCE AND SWITZERLAND(€ millions)	2022	2023	Change
Revenue	6,613.3	6,515.1	(1.5)%
Current operating income	202.6	152.4	(50.2)
Current operating margin	3.1%	2.3%	(70) bps

Revenue in France and Switzerland remained relatively resilient, down by -1.1% on a like-for-like basis 6 over the year. In France, the Group outperformed the market by nearly 3 points in 2023 according to the latest figures published by the Banque de France 7. As a result of the fall in consumer discretionary spending in France, Nature & Découvertes posted a sharp decline in sales and profitability compared to last year.Current operating income came to €152.4 million in 2023 compared to €202.6 million in 2022. Current operating margin was 2.3% in 2023.

IBERIAN PENINSULA(€ millions)	2022	2023	Change
Revenue	719.6	731.7	+1.7%
Current operating income	16.9	12.3	(4.6)
Current operating margin	2.3%	1.7%	(60) bps

Revenue in the Iberian Peninsula fell by -4.0% on a like-for-like basis 2 over the year, reflecting contrasting trends. On the one hand, Portugal grew by +3.5% on a like-for-like basis2 thanks to increased brand awareness and market share. The business activities of MediaMarkt, consolidated since October 1, 2023, contributed €39 million to revenue in the country. Conversely, revenue in Spain fell, penalized by purchasing power that was heavily impacted by the level of inflation, the rise in interest rates and an environment that remained competitive. Current operating income came to €12.3 million in 2023 compared to €16.9 million in 2022. Current operating margin was 1.7%.

BELGIUM AND LUXEMBOURG(€ millions)	2022	2023	Change
Revenue	616.5	628.0	+1.9%
Current operating income	11.1	6.0	(5.1)
Current operating margin	1.8%	1.0%	(80) bps

Revenue in the Belgium and Luxembourg increased by +2.0% on a like-for-like basis8 over the year, mainly due to the resilience of domestic appliances and very strong performance of editorial products, driven by gaming and books. Services posted significant growth thanks to the roll out of Vanden Borre Life, while consumer electronics was the only category to decline. Current operating income for the Belgium and Luxembourg segment was €6.0 million in 2023, compared with €11.1 million in 2022. Current operating margin was 1.0%.

Other income statement items

Non-current items amounted to -€131 million in 2023, compared to -€27 million in 2022. This amount includes:

• Exceptional items of €106 million: a provision of €85 million for ADLC9 litigation and brand impairments of €20 million.
• Other items of €25 million, stable compared to 2022, comprising the residual cost of the closure of Manor shop-in-shops in German-speaking Switzerland, riot-related costs and a provision for employees’ rights to accrue paid leave during periods of sick leave. This provision reflects the Group’s compliance with the rulings of the French supreme court (Cour de Cassation) and European law.

Net financial income was -€79 million, compared to -€45 million in 2022. The increase reflects:

• The cost of net financial debt remaining stable;
• IFRS 16 expenses up by +€11 million due to changes in interest rates; and
• Non-recurring items, including the depreciation and disposal of the stake in the Daphni Purple Fund (as a reminder, the Group’s investment, since 2016, in the Daphni Purple fund recorded a cumulative capital gain on disposal of €10 million).

Tax expenses were -€31 million, an improvement compared to 2022, given the reduction in the Group’s results. The effective tax rate was significantly impacted by the provision allocated in 2023 for fines imposed by the French Competition Authority, which is not tax deductible.

Restated to take account of the €106 million in exceptional non-current items described above, net income from continuing operations, Group share – adjusted10 totaled €31 million in 2023.

Financial structure

Free cash-flow from operations, excluding IFRS 16, was +€180 million, a clear improvement compared to the end of 2022. This is the result of a lower operating income, the normalization of the WCR, which returned to the level observed at the end of 2021, and operating investments that were in line with the Group’s expectations. Over the 2021-2023 period, the Group generated cumulative free cash-flow from operations, excluding IFRS 16, of €320 million, in line with the cumulative target of €500 million over the 2021-2024 period.

The Group’s gross financial debt was €923 million, which was mainly comprised of:

• A €300 million bond issue maturing in May 2024, the refinancing of which was fully secured by an additional undrawn credit line in the form of a delayed drawn term loan (DDTL) maturing in December 2026 if it is drawn (with a confirmed option to extend to December 2027);
• A €350 million bond issue maturing in May 2026; and
• A €200 million convertible bond issue (OCEANE) maturing in 2027.

After taking available cash (€1.1 billion) into account, the Group’s net cash position stood at €198 million as of December 31, 2023.

In addition, the Group has an RCF credit line of €500 million, which was undrawn at the end of 2023. Its maturity date has been extended to March 2028 (with two further confirmed extension options of March 2029 and March 2030).

This strong liquidity position supports Group confidence to strategically allocate its resources in the most opportune way (M&A, debt reduction, shareholder return, etc.) while remaining attentive to its leverage ratio.

As of December 31, 2023, Fnac Darty is fully compliant with its contractual commitments relating to its bonds and corporate loans.

Finally, the Group is rated by the rating agencies Standard & Poor’s, Scope Ratings and Moody’s, which assigned ratings of BB+, BBB and BB+ respectively during 2023, with a negative outlook (S&P and Scope) or a stable outlook (Fitch).

CONTINUED IMPLEMENTATION OF THE STRATEGIC PLANThe resilience of the 2023 full-year results continues to demonstrate the power and singularity of the Group’s omnichannel model, with the aim, in its day-to-day work and for the long haul, to be alongside consumers, helping them to be sustainable in their consumption habits and daily household tasks.

Fnac Darty keeps its commitment to its customers. In the last 4 years, 1.1 million French people have placed their trust in Darty Max. This emblematic Group service offers the repair of domestic and high-tech appliances to extend their life span and therefore reduce their environmental impact. In total, 2.5 million products have been repaired by our technicians, making the Group the leading repairer in France. Launched in 2023, Fnac Vie Digitale is an innovative monthly subscription service with a unique three-pronged approach: it offers security, advice and maintenance to guide customers’ digital experiences while guaranteeing them a stressless digital life. These illustrations support the transformation of Fnac Darty around high value-added services, generating recurring cash flows.

Second Life activities contribute to the Group's environmental ambitions in terms of circular economy, through the buyback of used products and the development of the refurbished product offering. In 2023, the volumes under the Fnac 2nde Vie and the Darty 2nde Vie brands has risen to almost 120 million euros, up 30% on 2022, giving concrete expression to the Group's desire to support consumers towards more sustainable and responsible consumption.

Retaillink, the Group’s fully integrated, omnichannel retail media agency, deploys innovative offers and enhanced presence to help brands achieve their awareness, commitment and sales objectives by getting closer to their communities. In 2023, this activity represents close to €90 million in revenue11, up compared to 2022.

Following the implementation of a plan to reduce energy consumption in 2022, the Group is continuing its actions in favor of energy sobriety. The ambitious commitment to reduce electricity consumption by at least 15% by 2024 (compared to 2022) has already been met, one year ahead of schedule. In 2023, the Group reduced its electricity consumption by 17% primarily through the use of reduced energy-consumption and better-managed installations across the entire Fnac and Darty integrated store network (€12 million invested in 2023). This ambition is an integral part of the Group's objective of reducing CO2 emissions by 50% (scope 3) by 2025. The scope selected covers transport (direct and indirect emissions) and site energy. On this scope, Fnac Darty recorded a -26% reduction in CO2 emissions in 2023, compared to 2019. The Group relies on strengthened governance that is structured around a Climate Committee to monitor the trajectory of its CO2 emissions, draw up action plans, monitor the roadmaps for its various operational sectors and work toward the expansion of the low-carbon strategy to other indirect emission items. Finally, the Group's CDP rating was renewed to A-. Fnac Darty is amongst the 22% of companies worldwide to be rated "Leadership"12.

Fnac Darty and CEVA Logistics have joined forces to create Weavenn, with the ambition to make it a major European player in the e-commerce logistics and SaaS Marketplace. This joint venture aims to simplify the daily lives of sellers by offering them a unique, fully integrated solution that will draw on their power and collective knowledge and expertise. Having secured regulatory approval, operations should start during the first half of 2024. In the next 5 years, the joint venture is expected to generate €200 million in revenue with a double-digit operating margin.

Meanwhile, Fnac Darty signed a collaboration with Rakuten France in September 2023 allowing Darty to expand its online presence and thus reach nearly 15 million new users each month.

Finally, the Group signed a partnership agreement with the organizing committee for the Paris 2024 Olympic and Paralympic Games to be an official supporter. Ahead of the Paris 2024 Olympic and Paralympic Games, Fnac Darty wants to develop initiatives for the Cultural Olympiad. Throughout the Paris 2024 Olympic and Paralympic Games, the Group also undertakes to contribute to the athlete experience by offering services inside the Athletes’ Village. Indeed, Fnac Darty's teams aim to supply the Village with small and large household appliances, including certain products from the IOC's TOP Partners, to ensure the best possible stay for athletes and their delegation, just as they do in the daily lives of French men and women. Committed to informed and sustainable consumption, Fnac Darty also intends to provide after-sales service for the host site. The Company has announced a “100% reuse” target for all its products, in line with its goal to expand its Second Life product range.

SCOPEThe Group has finalized its acquisition of MediaMarktSaturn in Portugal, consolidating its number 2 position in the country. This operation is a real opportunity to accelerate Group growth in its core businesses, to diversify and expand in the large and small domestic appliance categories, as well as to enhance its services and improve its overall efficiency.

On August 2, 2023, Fnac Darty announced the evolution of its strategic ticketing partnership, initiated in 2019 with the CTS Eventim Group, the European leader in the sector. In accordance with the terms of the agreement between the two parties, CTS Eventim notified Fnac Darty of its intention to exercise its call option to become the majority shareholder of France Billet. The transaction is subject to obtaining the necessary approvals from the European and Swiss competition authorities. The procedure for obtaining the necessary approvals from the competition authorities is still underway, in a phase that remains preliminary to date, making the timeframe for completion of this transaction uncertain.

RECENT EVENT

On February 12, the Supreme Court in London has refused the application by the liquidator of Comet Group Limited to challenge the judgment handed down by the Court of Appeal in London in October 2023 in favor of Darty Holdings SAS, a subsidiary of the Fnac Darty Group. This decision definitively closes the litigation linked to the disposal of Comet Group Limited in 2012. Fnac Darty should receive the balance of the sum initially paid in December 2022, as well as the reimbursement of interest and legal costs incurred, representing a positive impact on its cash position estimated at least at €40 million.

GOVERNANCE AND SHAREHOLDERS As of December 31, 2023, Vesa Equity Investment was the Group’s largest shareholder with 29.9% of the capital, followed by Ceconomy with 23.4% of the capital and GLAS SAS (receiver of Indexia Développement’s pledged stake in October 2023) with 10.9% of the capital.

Fnac Darty’s Board of Directors decided to implement the share buyback program approved by the General Meeting of May 24, 2023, for the purpose of performance share plans (LTIP) to the amount of €20 million. As of January 31, 2024, a total sum of €15.4 million (representing 603,604 shares) has been repurchased. On February 23, 2024, the Group plans to restart a program to reach the authorized amount.

At the General Meeting, the Board shall also propose the renewal of Brigitte Taittinger-Jouyet, Laure Hauseux and Stéphanie Meyer as independent directors for a term of 4 years.

DIVIDENDSFnac Darty will propose that the General Meeting scheduled for May 29, 2024 approves the distribution of a dividend of €0.45 per share. This amount represents a 39% payout ratio, calculated on the net income from continuing operations, Group share – adjusted13. This is in line with previous years and with the shareholder return policy presented in the strategic plan Everyday.The ex-date is July 3, 2024 and the payment date is July 5, 2024.

2024 OUTLOOK

In 2024, growth should be supported by the declining inflation, which is beneficial to purchasing power, and by the decline in the savings rate level. Nevertheless, the timing of the recovery in household consumption remains very uncertain, affecting visibility of the recovery in volumes.

Energy costs will benefit from a favorable comparable basis, while rental costs and wages are expected to rise.

Against this backdrop, the Group will ensure that it:

• Continues to outperform the markets thanks to its operational agility and the complementarity nature of its stores and websites, which are important assets in mature markets that are preparing for a new cycle of innovation from H2 2024.
• Preserves its gross margin as much as possible thanks to the relevance of its offer and the growing contribution of services.

• Pursues tight cost control thanks to the performance plans that offset a large part of the inflation in 2023.
• Maintains a solid liquidity position and remains attentive to potential market opportunities, while reducing its financial leverage ratio (c. 1.5x on 31 Dec.).
• Continues to deploy strategic initiatives to simplify its model and support future growth; testing in particular the possibilities offered by recent breakthroughs in artificial intelligence.

The Group is therefore continuing to have a cautious view of the economic and geopolitical context, and at this stage it anticipates a Current Operating Income (COI) for 2024 at least equal to that of 2023.

The Group reaffirms its objective of achieving a cumulative free cash-flow from operations14 of approximately €500 million over the period 2021-2024 (i.e. €180 million in 2024).

*********

PRESENTATION OF ANNUAL RESULTS 2023

Enrique Martinez, Chief Executive Officer and Jean-Brieuc Le Tinier, Group Chief Financial Officer, will host a virtual presentation of the results in French, with simultaneous interpretation into English, on Thursday February 22, 2024 at 6:30 p.m. (CET); 5:30 p.m. (UK); 12:30 p.m. (East Coast USA).

The webcast will be available at this link.

You can listen to a recording of the presentation at any time, in either French or English, via the website www.fnacdarty.com.

FINANCIAL CALENDAR

April 24, 2024 (as of the close of business): Revenue for the first quarter of 2024May 29, 2024: General Meeting 2024July 26, 2024 (as of the close of business): Half-year results 2024October 26, 2024 (as of the close of business): Third quarter 2024 revenue

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

NOTES

The Board of Directors of Fnac Darty SA met under the chairmanship of Jacques Veyrat on February 22, 2024 to approve the consolidated financial statements for the year 2023. The procedures for auditing the consolidated financial statements were performed and the certification report will be issued after the verification of the Management Report and the due diligence relating to the ESEF electronic format of the 2023 accounts are finalized.

The Group’s unaudited 2023 consolidated financial statements are available on the website www.fnacdarty.com.

The following tables contain individually rounded data. The arithmetical calculations based on rounded data may present some differences with the aggregates or subtotals reported.

Q4 2023 REVENUE BY OPERATING SEGMENT

(in €m)	Q4 2023	Change compared with Q4 2022
		Actual	At comparable scope and at constant exchange rates	Like-for-like basis – LFL15
France and Switzerland	2,223.3	(0.9)%	(1.0)%	(0.3)%
Iberian Peninsula	278.9	+13.9%	+13.9%	(2.6)%
Belgium and Luxembourg	188.6	+2.1%	+2.1%	+2.8%
Group	2,690.8	+0.7%	+0.6%	(0.3)%

2023 REVENUE BY OPERATING SEGMENT

(in €m)	2023	Change compared with 2022
		Actual	At comparable scope and at constant exchange rates	Like-for-like basis – LFL1
France and Switzerland	6,515.1	-1.5%	-1.6%	-1.1%
Iberian Peninsula	731.7	+1.7%	+1.7%	-4.0%
Belgium and Luxembourg	628.0	+1.9%	+1.9%	+2.0%
Group	7,874.7	-0.9%	-1.0%	-1.1%

2023 CURRENT OPERATING INCOME BY OPERATING SEGMENT

(in €m)	2022	As a % of revenue	2023	As a % of revenue
France and Switzerland	202.6	3.1%	152.4	2.3%
Iberian Peninsula	16.9	2.3%	12.3	1.7%
Belgium and Luxembourg	11.1	1.8%	6.0	1.0%
Group	230.6	2.9%	170.7	2.2%

SUMMARY INCOME STATEMENT

(in €m)	2022	2023	Change
Revenue	7,949	7,875	(0.9)%
Gross margin	2,410	2,380	(30)
As a % of revenue	30.3%	30.2%	(10) bps
Total costs	2,179	2,209	+30
As a % of revenue	27.4%	28.1%	+70 bps
Current operating income	231	171	(60)
Products and non-current operating income and expenses	(27)	(131)	(104)
Exceptional non-current operating expenses16	(4)	(106)	(102)
Other non-current operating income and expenses	(23)	(25)	(2)
Operating income	204	40	(164)
Net financial expense	(45)	(79)	(33)
Income tax	(54)	(31)	+24
Net income from continuing operations for the period	104	(69)	(173)
Net income from continuing operations for the period, Group share	100	(75)	(175)
Net income from discontinued operations	(132)	125	+257
Consolidated net income, Group share	(32)	50	82
Current EBITDA17	580	533	(47)
As a % of revenue	7.3%	6.8%	(50) bps
Current EBITDA2 excluding IFRS 16	326	269	(57)

FREE CASH-FLOW FROM OPERATIONS

(in €m)	2022	2023
Cash flow before tax, dividends and interest	572	496
IFRS 16 impact	(254)	(264)
Cash-flow before tax, dividends and interest, excluding IFRS 16	317	232
Change in working capital requirement, excluding IFRS 16	(155)	63
Income tax paid	(70)	8
Net cash-flows from operating activities, excluding IFRS 16	93	302
Operating investments	(138)	(132)
Operating divestments	7	17
Change in payables and receivables relating to non-current assets	9	(7)
Net cash-flows from operating investment activities	(123)	(122)
Free cash-flow from operations, excluding IFRS 16	(30)	180

BALANCE SHEET                                                 

Assets (€m)	At December 31, 2022	At December 31, 2023
Goodwill	1,654	1,680
Intangible assets	562	566
Property, plant and equipment	570	544
Rights of use relating to lease agreements	1,115	1,105
Investments in associates	2	1
Non-current financial assets	44	22
Deferred tax assets	60	63
Other non-current assets	0	0
Non-current assets	4,008	3,981
Inventories	1,144	1,158
Trade receivables	250	189
Tax receivables due	6	8
Other current financial assets	19	22
Other current assets	389	536
Cash and cash equivalents	932	1,121
Current assets	2,739	3,034
Assets held for sale	0	0
Total assets	6,747	7,015
Liabilities (€m)	At December 31, 2022	At December 31, 2023
Share capital	27	28
Equity-related reserves	971	987
Translation reserves	(4)	(6)
Other reserves	518	416
Shareholders’ equity, Group share	1,512	1,522
Shareholders’ equity – Share attributable to non-controlling interests	11	17
Shareholders’ equity	1,523	1,539
Long-term borrowings and financial debt	917	604
Long-term leasing debt	897	898
Provisions for pensions and other equivalent benefits	145	167
Other non-current liabilities	22	9
Deferred tax liabilities	165	199
Non-current liabilities	2,147	1,876
Short-term borrowings and financial debt	20	319
Short-term leasing debt	244	246
Other current financial liabilities	10	9
Trade payables	1,965	2,153
Provisions	37	115
Tax liabilities payable	0	1
Other current liabilities	803	758
Current liabilities	3,078	3,600
Liabilities relating to assets held for sale	0	0
Total liabilities	6,747	7,015

STORE NETWORK

	Dec. 31, 2022	Opening	Closure	Dec. 31, 2023
France and Switzerland*	826	28	16	838
Traditional Fnac	96	2	2	96
Suburban Fnac	17	0	0	17
Travel Fnac	36	3	2	37
Proximity Fnac	79	3	0	82
Fnac Connect	7	0	0	7
Darty	486	17	11	492
Fnac/Darty France	1	0	0	1
Nature & Découvertes**	104	3	1	106
Of which franchised stores	414	26	9	431
Iberian Peninsula	75	14	1	88
Traditional Fnac	53	0	0	53
Travel Fnac	2	2	0	4
Proximity Fnac	16	2	0	18
Fnac Connect	4	0	1	3
MediaMarkt Portugal	0	10	0	10
Of which franchised stores	6	0	0	6
Belgium and Luxembourg	86	1	3	84
Traditional Fnac***	13	0	1	12
Proximity Fnac	1	0	0	1
Darty (Vanden Borre)	72	1	2	71
Fnac Darty Group	987	43	20	1,010
Traditional Fnac	162	2	3	161
Suburban Fnac	17	0	0	17
Travel Fnac	38	5	2	41
Proximity Fnac	96	5	0	101
Fnac Connect	11	0	1	10
Darty/Vanden Borre	558	18	13	563
Fnac/Darty	1	0	0	1
MediaMarkt	0	10	0	10
Nature & Découvertes	104	3	1	106
Of which franchised stores	420	26	9	437

* including 13 Fnac stores abroad: 3 in Qatar, 3 in Tunisia, 2 in Senegal, 2 in Ivory Coast, 1 in the Congo, 1 in Cameroon, 1 in Saudi Arabia and 3 Darty stores abroad in Tunisia; and including 18 stores in the French overseas territories. Excluding 17 Fnac shop-in-shops opened in Manor stores.** including Nature & Découvertes subsidiaries managed from France: 4 stores in Belgium, 1 store in Luxembourg, 7 franchises in Switzerland, 1 franchise in Portugal and 5 franchises in the French overseas territories.*** Including one store in Luxembourg, which is managed from Belgium.

MONITORING OF THE NON-FINANCIAL INDICATORS OF THE EVERYDAY PLAN

INDICATORS	2021	2022	2023	2025 objective
Sustainability score18	111	115	118	135
Number of products repaired	2.1 million	2.3 million	2.5 million	2.5 million
Percentage of Women in the top 200 managers	27%	30%	33%	35%
Percentage of women on the Executive Committee	38%	42%	42%19	>40%

DEFINITIONS OF ALTERNATIVE PERFORMANCE INDICATORS

REVENUE The Group’s reported revenue (or profit from ordinary activities) corresponds to its published revenue. The Group uses the following notions of change in revenue:Change in revenue at a constant exchange rateChange in revenue at a constant exchange rate means that the impact of changes in exchange rates has been excluded. The exchange rate impact is eliminated by recalculating sales for period N-1 using the exchange rates used for period N.Change in revenue on a comparable scope of consolidationChange in revenue at a comparable scope of consolidation means that the impact of changes in the scope of consolidation is corrected so as to exclude the modifications (acquisition, disposal of subsidiary). Revenue of subsidiaries acquired or sold since January 1 of period N-1 are, therefore, excluded when calculating the change (in the event of a significant variation at Group level).Change in revenue on a same-store basisThe change in revenue on a same-store basis means that the impact of directly owned store openings and closures is excluded. Revenue of stores opened or closed since January 1 of period N-1 is excluded from calculations of the change.

CURRENT OPERATING INCOMEThe total operating income of Fnac Darty includes all the income and costs directly related to Group operations, whether the income and expense are recurrent or whether they result from one-off operations or decisions.“Other non-current operating income and expense” reflects the unusual and material items for the consolidated entity that could disrupt tracking of the Group’s economic performance.As a result, and in order to monitor the Group’s operating performances, Fnac Darty uses current operating income as the main management balance. This is defined as the difference between the total operating income and the “Other non-current operating income and expense.”Current operating income is an intermediate line item intended to facilitate the understanding of the entity’s operating performance and that can be used as a way to estimate recurring performance. This indicator is presented in a manner that is consistent and stable over the long term in order to ensure the continuity and relevance of financial information.

CURRENT EBITDA

In addition to the results published, the Group presents the current EBITDA performance indicator, which excludes Interest, Taxes, Depreciation, Amortization and provisions on operational fixed assets from current operating income. Current EBITDA is not an indicator stipulated by IFRS and does not appear in the Group consolidated financial statements. Current EBITDA has no standard definition and, therefore, the definition used by the Group may not match the definition of this term used by other companies. The application of IFRS 16 significantly changes the Group’s current EBITDA. Current EBITDA excluding IFRS 16 is used in the context of the applicable financial covenants under the Loan Agreement.EBITDA = current operating income before net additions for depreciation, amortization and provisions on non-current operating assets recognized in current operating income.

FREE CASH-FLOW FROM OPERATIONS

The Group also uses an intermediate line item to track its financial performance described as free cash-flow from operations. This financial indicator measures the net cash flows linked to operating activities and the net cash flows from operational investments (defined as acquisitions and disposals of property, plant and equipment and intangible assets, and the change in trade payables for non-current assets). The application of IFRS 16 significantly changes the Group’s free cash-flow from operations.Free cash-flow from operations = net cash flows related to operating activities + net cash flows from net operating investments.

NET CASH

Net cash consists of gross cash and cash equivalents, minus gross debt including accrued interest not yet due as defined by the French National Accounting Council’s recommendation No. 2013-03 on November 7, 2013. The application of IFRS 16 significantly changes the Group’s net cash.

NET FINANCIAL DEBT

Net financial debt consists of gross debt including accrued interest not yet due as defined by the French National Accounting Council’s recommendation No. 2013-03 on November 7, 2013, minus gross cash and cash equivalents. The application of IFRS 16 significantly changes the Group’s net financial debt.

THE APPLICATION OF THE IFRS 16 STANDARD

On January 13, 2016, the IASB published IFRS 16 on “Leases.” IFRS 16 replaces IAS 17 and its interpretations. This standard, which is mandatory for annual periods beginning on or after January 1, 2019, requires the recognition of an asset (the right of use) and a liability (leasing debt) on the basis of discounted in-substance fixed lease payments.

The Group has applied IFRS 16 since January 1, 2019. In order to ensure the transition between IAS 17 and IFRS 16, all lease and service agreements falling within the scope of 16 have been analyzed.

To monitor its financial performance, the Group publishes indicators that exclude the application of IFRS 16. These indicators are current EBITDA excluding IFRS 16, free cash-flow from operations excluding IFRS 16, and net financial debt excluding IFRS 16.

With the application of IFRS 16	IFRS 16 restatement	Without the application of IFRS 16
Current EBITDA	Rent within the scope of IFRS 16	EBITDA excluding IFRS 16
Current operating income before depreciation, amortization and provisions on fixed operating assets that are recognized as recurring operating income		Current EBITDA including rental expenses within the scope of application of IFRS 16
Free cash-flow from operations	Payment of rent within the scope of IFRS 16	Free cash-flow from operations excluding IFRS 16
Net cash-flow from operating activities, less net operating investments		Free cash-flow from operations, including cash impacts relating to rent within the scope of application of IFRS 16
Net financial debt	Leasing debt	Net financial debt excluding IFRS 16
Gross financial debt less gross cash and cash equivalents		Net financial debt less leasing debt
Net financial income	Financial interest on leasing debt	Net financial income excluding financial interest on leasing debt

1 Excluding IFRS 16

2 Like-for-like basis – LFL: excludes the effect of changes in foreign exchange rates, changes in scope, and store openings and closures.3 Corresponds to the current net income, Group share of continuing operations, excluding IFRS 16 and adjusted according to the provision relating to the planned transaction with the French Competition Authority (€85 million) and brand impairments (€20 million).4 Note de Conjoncture (economic forecast) – December 2023, INSEE5 The Darcos Law, which took effect on October 7, 2023, imposes upon all players in the online bookselling market a minimum delivery fee of €3 for any purchases of new books totaling less than €35.6 Like-for-like basis – LFL: excludes the effect of changes in foreign exchange rates, changes in scope, and store openings and closures.7 Market data for 2023 published by Banque de France.8 Like-for-like basis – LFL: excludes the effect of changes in foreign exchange rates, changes in scope, and store openings and closures.

9 Fnac Darty decided to waive its right to contest the grievance notified to it by the French Competition Authority’s investigation services concerning, in particular, a vertical agreement between Darty and some distributors over a limited period which ending in December 2014 - i.e., prior to Fnac’s acquisition of Darty. This choice does not constitute neither an avowal nor an acknowledgment of responsibility on the part of the Group, but rather reflects its intention to bring a rapid close to a complex procedure and to be able to devote all its resources to the operational implementation of its “Everyday” strategic plan. See the press release published on June 29, 2023.10 Corresponds to the current net income from continuing operations, Group share, excluding IFRS 16 and adjusted according to the provision relating to the planned transaction with the French Competition Authority (€85 million) and brand impairments (€20 million)11 Includes trade marketing and advertising department activities.12 Leadership as per CDP include all companies evaluated A and A-.13 Corresponds to the current net income, Group share of continuing operations, excluding IFRS 16 and adjusted according to the provision relating to the planned transaction with the French Competition Authority (€85 million) and brand impairments (€20 million)

14 Excluding IFRS 16.15 Like-for-like basis – LFL: excludes the effect of changes in foreign exchange rates, changes in scope, and store openings and closures.16 Exceptional non-current operating expenses in 2023 correspond to the provision relating to the planned transaction with the French Competition Authority €85 million and brand depreciation €20 million

17 EBITDA = current operating income before interest, tax, depreciation, amortization and provisions on fixed operational assets.18 Sustainability score: average of a reliability score and a repairability score, based on data collected by Fnac Darty’s after-sales service over the last two years for each product and weighted by the volumes of products sold by the Group in the year in question.

Attachment

• Fnac_Darty_CP_2023_EN_22 02 2024_vdef