Fnac Darty SA · EURONEXT:FNAC
Fnac Darty SA — Groupe Fnac — FY2014 Earnings Presentation
40 slides from Fnac Darty SA's earnings presentation, Feb 27, 2015
Slide 1: 2014 Full Year Results
February 27th, 2015 2014 FULL YEAR RESULTS
Slide 2: Disclaimer
Disclaimer Confidential IMPORTANT NOTICE: By attending the meeting where this presentation is given, or by reading the presentation slides, you agree to be bound by the following limitations and qualifications: Certain information included in this presentation are not historical facts but are forwar
Slide 3: 2014: accelerating our transformation
2014: accelerating our transformation 2014: An improved performance on all indicators reflecting the rapid execution of Fnac 2015 strategic plan and a culture of constant adaptation and innovation Acceleration of sales momentum Sales up 0.9% in 2nd half Revenues stable for the full year (vs
Slide 4: Strategic review
February 27th, 2015 2014 FULL YEAR RESULTS Strategic review
Slide 5: Innovations and Fnac 2015 are the pillars of solid performance in 2014
Innovations and « Fnac 2015 » are the pillars of solid performance in 2014 Fnac 2015 Innovation and Agility Expand omnichannel proposal A culture of constant innovation Reinforce commercial attractiveness Product offering and customer service Services Accelerate growth levers Online
Slide 6: Expanding our omnichannel model
Expanding our omnichannel model Success of innovative omnichannel features “click & collect 1h”(1) and “click & mag”(2) Marketplace gross merchandise volume up 25% Omnichannel sales in France Rapid ramp-up in Spain and Portugal and robust (%web sales) 35% growth in France 29% 22% 12% M-comme
Slide 7: Introduction of innovative services
Introduction of innovative services New online delivery services Fnac Express+(1) Fnac 3h Chrono(2): the fastest offer on the market New instore initiatives to improve customer service Deployment of Fnac Shop(3), Accelerated check-out process (sales force cashing, mobile and self check o
Slide 8: A unique ability to move early on fast-growing categories
A unique ability to move early on fast-growing categories Successful deployment of mobile phone sections in France since Feb ’14 Double-digit market share reached in a few weeks High attachment rate to services and accessories A cutting-edge strategy in connected objects First retail banne
Slide 9: Rapid ramp-up of new product categories
Rapid ramp-up of new product categories Share of new categories (% of Group sales) 13% Contribution of new product categories to sales almost 11% doubled in 2014 6% 4% Stationary sections deployed in France in 2014 FY 2012 FY 2013 FY 2014 Q4 2014 Differentiating product mix and merchandising
Slide 10: Offensive commercial strategy
Offensive commercial strategy Further online / offline price alignment Tight monitoring of online price vs pure players Targeted promotions Development of bundle offers Exclusive promotions with suppliers Exclusive offers for members Visible communication campaigns 2014 FULL YEAR RESUL
Slide 11: Proximity format expanding rapidly
Proximity format expanding rapidly New format store network 11 new formats openings in 2014 34 Of which 10 proximity stores 16 23 5 15 2 10 Including the conversion of 2 Intermarché 14 18 19 « culture & loisirs » into Fnac Proximity 10 2011 2012 2013 2014 Successful internationalisation of t
Slide 12: Financial review
February 27th, 2015 2014 FULL YEAR RESULTS Financial review
Slide 13: Key financial highlights
Key financial highlights Group sales stable for the full year Acceleration of sales momentum throughout the year Sales up +0,9%* in the 2nd half vs a -1.1%* decrease in the first half Sales up in France and the Iberian Peninsula Current operating income up 7.4% to €77m Strong increase in
Slide 14: Positive sales momentum continued in the 4th quarter
Positive sales momentum continued in the 4th quarter Group sales evolution Q4 sales evolution Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Iberian Other 2013 2013 2013 2013 2014 2014 2014 2014 Group France Peninsula Brazil Countries 2.0% 1.8% 0.6% 0.1% 0.1% 0.1% -1.5% -0.6% -1.1% X%: vs n-1 Like-for-like: -5.3% -5.1% -4
Slide 15: Group returning to sales growth in 2014
Group returning to sales growth in 2014 Sales evolution * Market share evolution – 2014 vs 2013 2014 gross margin evolution vs n-1 H1 2013 H2 2013 H1 2014 H2 2014 +0.6pt 0.9% -0.3pt +0.2pt +0.2pt -1.5% -1.1% +0.1pt -0.6pt France Iberian Peninsula H1 H2 -5.2% FY 2013: -3.1% FY 2014: 0.0% Editorial Pr
Slide 16: Current operating income up 7.4% to €77m
Current operating income up 7.4% to €77m €m 2013 2014 % CHANGE Full-year sales stable at comparable scope of consolidation and constant FX REVENUES 3,905 3,895 -0.3% Decrease of 40 bp in gross margin rate Gross Margin % Revenues 1,164 29.8% 1,144 29.4% -1.8% mostly due to Personnel costs -559 -5
Slide 17: France returning to sales growth and improving profits
France returning to sales growth and improving profits €m 2013 2014 % Change 2014 sales evolution Revenues 2,762 2,777 0.5% FY 2013 S1 2014 S2 2014 FY 2014 Change at comp. scope 1.3% of consolidation 0.4% 0.4% Current operating 42.7 47.3 10.8% -0.8% income Like-for-like: -2.7% 2.3% Operating margin
Slide 18: Iberian Peninsula improving strongly in 2014
Iberian Peninsula improving strongly in 2014 €m 2013 2014 % Change 2014 sales evolution FY 2013 S1 2014 S2 2014 FY 2014 Revenues 654 659 0.7% 1.3% 0.7% 0.0% Current operating 21.3 23.6 10.8% income Operating margin 3.3% 3.6% -4.2% X%: vs n-1 at comparable scope of consolidation Sales up 0.7% Dou
Slide 19: Brazil facing a complex environment
Brazil facing a complex environment €m 2013 2014 % Change 2014 sales evolution Revenues 197 175 -11.3% FY 2013 S1 2014 S2 2014 FY 2014 Change at constant -3.4% rate -0.6% Current -1.0% operating 0.7 -0.9 N/A income -3.4% Operating margin 0.4% -0.5% -5.6% X%: vs n-1 at at comparable scope of consolid
Slide 20: Belgium and Switzerland: solid resistance in H2
Belgium and Switzerland: solid resistance in H2 €m 2013 2014 % Change 2014 sales evolution Revenues 292 284 -2.6% FY 2013 S1 2014 S2 2014 FY 2014 Change at constant rate -3.1% -0.7% Current operating 7.1 7.1 0,0% -3.1% income -5.6% -6.0% Operating margin 2.4% 2.5% X%: vs n-1 at at comparable scope o
Slide 21: Ticketing: successful development in 2014
Ticketing: successful development in 2014 Satisfactory performance of the ticketing business (BtoC), with sales volume up Internet driving the growth, benefiting primarily from increased IT investments Distribution reach increased Double-digit growth in Tourism & Entertainment and Art & Muse
Slide 22: Sharp increase in net income
Sharp increase in net income % €m 2013 2014 Change Current operating income 72 77 7.4 % Non-current operating income Lower non-current operating items -29 -9 68% and expenses Resulting mainly from lower Operating income 43 68 57% restructuring costs Financial charges -12 -12 -3% Stable financi
Slide 23: Cost savings well above target
Cost savings well above target Cost savings Good momentum in cost reductions continued in 2014 €118m vs objective of €80m €63m cost savings delivered in 2014 €55m €63m €118m cost savings generated in the €60m €30m- 2013-2014 period vs an ambition of €80m €19m €40m 2012 2013 2014 2015 Objecti
Slide 24: Sharp improvement in free cash flow generation: +51% vs 2013
Sharp improvement in free cash flow generation: +51% vs 2013 Strong increase in cash flow from €m 2013 2014 Var. operations thanks to Cash flow from operations before Improved operational performance tax, dividends and interest 91 122 +31 Lower non-current cash items, Change in inventories 17
Slide 25: A stronger balance sheet
A stronger balance sheet €m 31/12/2013 31/12/2014 Shareholders’ funds 550 595 Net cash 461 535 Net cash position increased to €535m at end 2014 compared to €461m at end 2013 Higher level of shareholders’ equity (close to €600m) Financial covenants met on the €250m revolving credit facility F
Slide 26: Conclusion
February 27th, 2015 2014 FULL YEAR RESULTS Conclusion
Slide 27: Conclusion and outlook
Conclusion and outlook 2014 results reflect the acceleration of the Group’s transformation and its ability to innovate to adjust its model to changing consumer uses Consumption environment expected to remain sluggish in 2015 The Group is well positioned to strengthen its leadership through B
Slide 28: Appendices
February 27th, 2015 2014 FULL YEAR RESULTS Appendices
Slide 29: Q4 and full year revenue
Q4 and full year revenue Change vs Q4 2013 Change vs FY 2013 at constant at constant exchange rates Q4 2014 exchange rates same-store FY 2014 and same-store €m Reported and comparable Reported basis* comparable basis* scope of scope of consolidation consolidation France 1,014 0.2% 0.1% 1.0% 2,777 0.
Slide 30: 2014 sales by category
2014 sales by category €m 2014 % Change Technical products 2,185 1.6% Editorial products 1,512 -3.2% Services 198 3.1% Total sales 3,895 -0.3% 2014 FULL YEAR RESULTS 30 February 27th, 2015
Slide 31: Non current operating income and expenses
Non current operating income and expenses €m 2013 2014 Non current operating expenses -36 -13 Restructuring costs -29 -13 Litigation and disputes -5 0 Other risks -2 0 Non current operating income 7 4 Gains on asset disposals 7 0 Other risks 0 4 Total -29 -9 2014 FULL YEAR RESULTS 31 February 27th,
Slide 32: Financial charges
Financial charges €m 2013 2014 % Change Cost of net debt -0 -0 0% Other financial charges (net)(1) -11 -12 -4% Financial charges (net) -12 -12 -3% (1) Includes expense on the cost of free consumer credit, the impact of discounting assets and liabilities and fees related to the revolving credit facil
Slide 33: Net current income
Net current income €m 2013 2014 Income before tax 31 56 Non-current operating expenses and revenues -29 -9 Current income before tax 60 65 Current tax (expense) / Income -17 -17 Tax on non-current items 1 2 Total tax charge -16 -15 Net current income 44 50 2014 FULL YEAR RESULTS 33 February 27th, 20
Slide 34: Balance sheet
Balance sheet ASSETS in €m 2013 2014 EQUITY AND LIABILITIES in €m 2013 2014 Share capital 17 17 Reserves related to equity 495 495 Goodwill 332 332 Conversion reserves -3 -2 Intangible assets 70 68 Other reserves 41 80 Tangible assets 181 163 Equity Group Share 550 589 Non-current financials assets
Slide 35: Cash flow statement
Cash flow statement €m 2013 2014 Net income from continuing operations 16 41 Net additions to depreciation, amortization and provisions 59 57 Financial interest income and expense 4 6 Net tax charge payable 12 18 Cash flow from operations before tax, dividends and interest 91 122 Change in working c
Slide 36: Working capital
Working capital As of As of €m December 31, 2013 December 31, 2014 Inventories 473 469 Accounts receivable 109 115 Accounts payable -646 -713 Other operational working capital including Accounts -363 -306 receivable and payable related to CAPEX Operational Working capital -427 -435 Financial account
Slide 37: Net cash position
Net cash position €m Free cash flow: €72m 122 18 -14 9 -54 -2 -6 0 535 461 Net cash Cash Flow Change in Corporate CAPEX Increase in Net financial Net interest Other Net cash position at before tax, working capital income tax capital investments paid and position at December 31, dividends and require
Slide 38: Shareholders' funds
Shareholders’ funds €m 600,0 0 0 1 9 37 500,0 400,0 300,0 595 550 200,0 100,0 0,0 Shareholder's equity Increase in capital Total comprehensive Treasury share Dividends paid Valuation of share- Shareholder's equity as of December 31, income based payments as of December 31, 2013 2014 2014 FULL YEAR R
Slide 39: Exchange rates
Exchange rates 2013 2014 BRL (Brazil) 2.8685 3.1221 CHF (Switzerland) 1.2310 1.2146 NB : average rates 2014 FULL YEAR RESULTS 39 February 27th, 2015
Slide 40: Store network
Store network December, 31th 2013 December, 31th 2014 Owned Franchised Total Owned Franchised Total France 87 21* 108 85 27* 112 Iberian Peninsula 44 0 44 47 0 47 Brazil 11 0 11 12 0 12 Other countries 13 0 13 13 0 13 Group 155 21 176 157 27 184 * Included 1 store in Morocco 2014 FULL YEAR RESULTS 4