Fnac Darty: Good revenue resistance in Q1 2022
Good revenue
resistance in Q1
2022
- Revenue for Q1
2022 at €1,782 million, down slightly by -2.0% on a
reported basis and by -2.5% on a like-for-like
basis,1 compared to Q1
2021, taking into account a high
comparison basis effect and in an increasingly inflationary
environment.
- Performance driven by
strong in-store sales growth, in a context where all stores were
open in Q1 this year, and by a continued high
level of online sales.
- Strategic partnerships for
the Group were formed around digital development and data with
Google, and repairs with
Apple.
- Strong financial management
by Fnac Darty, with Standard
& Poor's and Scope Ratings agencies raising the Group's
long-term credit ratings by a level.
Enrique Martinez, Chief Executive
Officer of Fnac Darty,
declared: "The
Group’s performance was solid in Q1 2022, with good product
availability and excellent service quality. We also entered into
strategic partnerships with two key Tech stakeholders: with Google,
to achieve a smoother, more personalized and innovative experience
for our customers when shopping online; and with Apple, to
strengthen our position as a leader in repairs and the circular
economy. We will remain attentive to changes in the international
environment in the coming months."
FIRST QUARTER 2022 REVENUE
|
|
|
|
|
|
|
|
|
Q1 2022In €m |
Change vs Q1 2021 |
|
|
Actualdata |
|
Like-for-Likedata1 |
|
|
France and
Switzerland |
1,471 |
-2.3% |
|
-2.8% |
|
|
Iberian
Peninsula |
157 |
+8.5% |
|
+7.4% |
|
|
Belgium and
Luxembourg |
154 |
-8.6% |
|
-8.6% |
|
|
Group |
1,782 |
-2.0% |
|
-2.5% |
|
|
FIRST QUARTER 2022 KEY HIGHLIGHTS
Sales analysis for the
quarter
Group revenue reached €1,782 million in Q1 2022,
down -2.5% on a like-for-like basis2 and -2.0% on a reported basis
in the context of a very high comparison basis (as a reminder, the
Group had recorded like-for-like growth of +21.7% in Q1 2021).
Compared to the proforma 2019 pre-crisis level3,
the Group recorded solid growth in its sales of +7.8%, supported by
an increase in the average checkout value and the conversion
rate.
Compared to Q1 2021, the strong performance of
in-store sales, with stores fully opened in Q1 2022, partially
offset the consolidation of the digital business, which represents
23% of the Group's total sales. The omnichannel model continued its
progression this quarter and accounts for more than 47% of total
online sales, up +6 points from Q1 2021.
Changes by product category
During the quarter, the Group posted a decline
in its sales of appliances mainly due to lower
volumes in the market, coupled with a strong comparison basis
effect in Q1, as the average selling price of large appliances is
rising. Consumer electronics recorded a strong
momentum in telephony, sound and photo, which was more than offset
by the decline in categories that had benefited from the high
demand for remote-working and home-learning equipment in connection
with the health crisis. Editorial products
continued to show strong sales growth in connection with the
gradual recovery of in-store foot traffic, including books, video,
and audio, while gaming sales declined.
Diversification categories continued to record
solid growth, which was driven mainly by urban mobility. Finally,
services continued to grow in all areas,
benefiting from the continued development of Darty Max and good
credit momentum. Thanks to an easing of health restrictions and
with a rich line-up, ticketing showed an encouraging recovery
during the quarter.
Changes by region
In Q1 2022, sales in the France and
Switzerland segment showed good resilience at €1,471
million, down slightly by -2.8% on a like-for-like basis1, given a
difficult comparison basis effect related to restrictions imposed
in Q1 2021 that had boosted product sales related to remote-working
and home well-being. This performance was driven in particular by
the strong sales momentum of editorial products, particularly of
books, led by literature and manga comics, as well as the continued
positive impact of the Culture Pass. In addition, Nature &
Découvertes posted a recovery in sales with an increase in the
average checkout value and a return of in-store foot traffic to
stores that were closed for much of Q1 last year. Finally, in
Switzerland, the partnership with Manor continued during the
quarter with 7 Fnac shop-in-shops opening within Manor, in
accordance with the deployment plan. By summer, the Group still
aims to have a total of 27 Fnac shop-in-shops within Manor
stores.
Sales in the Iberian Peninsula
amounted to €157 million, up +7.4% on a like-for-like basis1, in
the context of a weaker comparison basis due to restrictions that
had strongly impacted the region's performance in Q1 2021. Despite
continued strong competitive pressure, mainly in Spain, stores
posted double-digit growth in the region over the quarter related
to higher traffic, more than offsetting the normalization of
digital sales trends in both countries.
Revenue in the Belgium and
Luxembourg region reached €154 million, down by -8.6% on a
like-for-like basis1. This decline is the result of a sluggish
consumption environment in a context of particularly high inflation
and sustained competitive pressure. Compared to 2019 proforma
figures, sales in the region continued to grow by +3.8%.
Gross margin rate
The Group's gross margin rate increased by more
than +40 basis points during the quarter compared to Q1 2021,
mainly boosted by the recovery in ticketing activities and the
positive impact of services related to the continued roll out of
Darty Max.
Strategic partnerships in digital and
repairs
Fnac Darty is pursuing strategic partnerships to
continue its digital transformation and product reparability
initiatives; two major focuses of its strategic plan Everyday.
On February 23, the Group entered into a
key strategic partnership with
Google that is focused on the Cloud and that is
currently being deployed. Google Cloud Retail Search solution is
being integrated into the Fnac.com and Darty.com websites. This
will increase the performance of the search engine, both online and
on mobile devices, through a simplified, personalized and enhanced
online shopping experience for customers. This partnership will
also allow Fnac Darty to further improve operational efficiency
(such as promotion management and better prioritization of
after-sales service responses) through the integration of data
analytics and processing tools, machine learning and artificial
Intelligence.
Moreover, on March 21, the Group announced that
WeFix, the French leader in smart phone repair, had been officially
accredited by Apple for repairs and so it will now
have access to the brand's spare parts. All 142 WeFix points of
sale will thus join the Apple Authorized Service Provider (AASP)
network in France by summer 2022. This partnership also enables the
Fnac and Darty brands to integrate AppleCare Services into the
range of mobile insurance offered in-store as well as on the
Group's e-commerce sites. The agreement strengthens the long-term
relationship between Apple and Fnac Darty and enables Fnac Darty to
confirm its commitment to the repair and durability of its
products, with the aim of reaching 2.5 million repaired products
per year by 2025.
Continuation of the Group's responsible
commitment
In an inflationary environment, on February 23
Fnac Darty decided to make a commitment toward purchasing power by
paying an exceptional purchasing power premium (prime
exceptionnelle de pouvoir d'achat — PEPA) to its most directly
affected employees. For employees working in France with a gross
fixed annual salary of less than €35,000, the premium amounts to
€400. The Group has also put a similar measure in place that is
adapted to the specific context of each country in which it
operates, except in Belgium, which has already benefited from a
support measure for purchasing power. At the end of March, this
premium was paid to more than 19,000 employees, or nearly 80% of
the Group's employees, representing an impact on the Group's 2022
current operating income of more than €6 million.
Recognition of the Group's strong
financial management
Fnac Darty is rated by the Standard &
Poor's, Scope Ratings and Moody's rating agencies.On March 22 and
April 1, the S&P and Scope Ratings agencies raised their Fnac
Darty long-term credit rating by a level, demonstrating their
confidence in the Group's omnichannel model, operational
performance, and financial discipline, all of which have
significantly improved its risk profile. Fnac Darty has BBB, BB+
and Ba2 ratings, assigned by Scope Ratings, Standard & Poor's,
and Moody's, respectively, all with a stable outlook.
Shareholding and governance
Fnac Darty recently welcomed a new shareholder,
Vesa Equity Investment, which notified the Group on April 12 that
it holds more than 13% of Fnac Darty's share capital and voting
rights, but that it did not intend to seek the appointment of one
or more members to the Board of Directors. The firm is now the
Group's second largest shareholder.
Moreover, after receiving the opinion of the
Appointments and Compensation Committee, the Board of Directors
will propose to the General Meeting on May 18, 2022 to renew the
directorship of Jacques Veyrat for a term of three years, as well
as those of Daniela Weber-Rey and Jean-Marc Janaillac for a
four-year term each.
The Board of Directors will also submit to the
General Meeting the appointment of Stefanie Meyer as an independent
director for a two-year term4, replacing Delphine Mousseau, who
resigned as director on January 26, 2022. This appointment, in
accordance with the Board's diversity policy, would strengthen the
gender balance, diversity of profiles and the key skills within the
Board of Directors. The Board's level of international experience
would thus be preserved, as well as its expertise in retail and
digital development, with Stefanie Meyer having held the position
of Vice-President Group Projects and PMO (Program Mgt. Office) at
Ceconomy AG from 2018 until February 2022. It should be noted that,
in view of the AFEP-MEDEF independence criteria, Stefanie Meyer is
considered to be an independent director.
Thus, at the end of the General Meeting and
subject to your vote in favor, the Board of Directors would remain
composed of 14 members, including 11 independent members, 2 members
representing employees and 6 women. The composition of the Board
would thus comply with the AFEP-MEDEF Code as regards the number of
independent directors on the Board and meet the legal obligation as
regards the male/female ratio represented on the Board, i.e. at
least 40% of each sex.
OUTLOOK
The year 2022 has started with rising inflation
and geopolitical uncertainties that will impact visibility in the
coming months. Although Fnac Darty does not have any sites in the
conflict zone between Russia and Ukraine, nor does Fnac Darty
procure from suppliers based in that area, the Group remains
attentive to the evolving situation and its potential impact on its
activities and results.
After a first quarter in which the Group managed
to preserve its gross margin rate, Fnac Darty is particularly
vigilant about changes in its markets in the coming months, with
inflation on the rise and a decline in the consumer confidence
index. Nevertheless, the Group remains confident in its ability to
outperform the markets in which it operates, as it has already
demonstrated in recent years, through its position as a leading
omnichannel player. The Group's priority for this year remains
above all to optimize its gross margin rate, thanks to strong
supply management, its wide range of products and services, and its
ability to reflect price increases, particularly in the more
premium product categories where the range is regularly renewed.
These drivers will be complemented by robust cost control through
the Group's annual performance plans to partially offset the impact
of inflation, which is expected to be higher than in previous
years.
Finally, the Group will continue to execute its
strategic plan Everyday and confirms its objectives of achieving5
cumulative free cash-flow from operations5 of approximately €500
million over the 2021–2023 period, and free cash flow from
operations5 of at least €240 million annually from 2025.
************
FIRST QUARTER 2022 REVENUE
Jean-Brieuc Le Tinier, Chief Financial
Officer of the Group,
will host a conference call for investors and analysts on Thursday,
April 21, 2022, at 6:30 pm (CET); 5:30 pm (UK), 12:30 pm (East
Coast USA).
Please register here to only attend the
conference by phone and to be able to ask questions during the
Q&A session.
A presentation will be broadcast live, which you
will be able to access by clicking on the following link: here
Listen to the recording at Fnac's website:
https://www.fnacdarty.com/en/.
CONTACTS
ANALYSTS/INVESTORS |
Stéphanie Laval |
stephanie.laval@fnacdarty.com+33 (0)1 55 21 52 53 |
Marina Louvard |
marina.louvard@fnacdarty.com+33 (0)1 72 28 17 08 |
|
|
|
PRESS |
Audrey Bouchard |
audrey.bouchard@fnacdarty.com+33 (0)6 17 25 03 77 |
Alexandra Redin |
alexandra.redin@fnacdarty.com+33 (0)6 66 26 05 18 |
APPENDICE – STORE NETWORK
|
|
|
|
|
|
|
Dec. 31, 2021 |
Opening |
Closing |
Mar 31, 2022 |
|
France and Switzerland* |
798 |
9 |
5 |
802 |
|
Traditional Fnac |
97 |
2 |
4 |
95 |
|
Suburban Fnac |
17 |
0 |
0 |
17 |
|
Travel Fnac |
30 |
0 |
0 |
30 |
|
Proximity Fnac |
73 |
2 |
0 |
75 |
|
Fnac Connect |
14 |
0 |
0 |
14 |
|
Darty |
465 |
4 |
0 |
469 |
|
Fnac/Darty France |
1 |
0 |
0 |
1 |
|
Nature & Découvertes** |
101 |
1 |
1 |
101 |
|
Of which
franchised stores |
385 |
7 |
2 |
390 |
|
|
|
|
|
|
|
Iberian Peninsula |
74 |
1 |
1 |
74 |
|
Traditional Fnac |
52 |
1 |
1 |
52 |
|
Suburban Fnac |
0 |
0 |
0 |
0 |
|
Travel Fnac |
2 |
0 |
0 |
2 |
|
Proximity Fnac |
16 |
0 |
0 |
16 |
|
Fnac Connect |
4 |
0 |
0 |
4 |
|
Of which
franchised stores |
5 |
0 |
0 |
5 |
|
|
|
|
|
|
|
Belgium and Luxembourg |
85 |
0 |
0 |
85 |
|
Traditional Fnac*** |
12 |
0 |
0 |
12 |
|
Suburban Fnac |
0 |
0 |
0 |
0 |
|
Travel Fnac |
0 |
0 |
0 |
0 |
|
Proximity Fnac |
1 |
0 |
0 |
1 |
|
Fnac Connect |
0 |
0 |
0 |
0 |
|
Darty (Vanden Borre) |
72 |
0 |
0 |
72 |
|
Of which
franchised stores |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
Fnac Darty
Group |
957 |
10 |
6 |
961 |
|
Traditional Fnac |
161 |
3 |
5 |
159 |
|
Suburban Fnac |
17 |
0 |
0 |
17 |
|
Travel Fnac |
32 |
0 |
0 |
32 |
|
Proximity Fnac |
90 |
2 |
0 |
92 |
|
Fnac Connect |
18 |
0 |
0 |
18 |
|
Darty/Vanden Borre |
537 |
4 |
0 |
541 |
|
Fnac/Darty |
1 |
0 |
0 |
1 |
|
Nature & Découvertes |
101 |
1 |
1 |
101 |
|
Of which
franchised stores |
390 |
7 |
2 |
395 |
|
* Including 10 Fnac stores abroad: 2 in
Tunisia, 1 in Morocco, 1 in the Congo, 1 in Cameroon, 2 in Ivory
Coast, 2 in Qatar and 2 Darty stores in Tunisia; 17 stores in the
French overseas territories. Excluding Fnac shop-in-shops opened in
Manor stores.** Nature & Découvertes and its subsidiaries are
managed from France. Including four stores in Belgium, one store in
Luxembourg, one franchise in Portugal, seven franchises in
Switzerland and four franchises in the French overseas
territories.*** Including one store in Luxembourg, which is managed
from Belgium.
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.2 Like-for-like data:
excludes the effect of changes in foreign exchange rates and scope
of consolidation, and directly owned store openings and closures.3
Including Nature & Découvertes on a full year basis.4 In
accordance with the rule of rescheduling of mandates.5 Excluding
IFRS 16.
- Fnac_Darty_CP_T1 2022_vENG_VDEF
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