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conference for the presentation of the half-year results of NACDAIATI. Enrique Martinez, Director General, and Jean-Brieu Le Timier, CFO, will be speaking during this call. Gentlemen, the floor is yours. Hello. Thank you, everyone. Thank you for being with us. for the presentation of our half-year results. I know that the week was tough, so I'll skip to the essential. I want to first express my support to the stores that had to face riots and the consequences. Most of our stores have reopened. Only one is still closed. And we have three reasons for satisfaction. We've been resilient in our sales in spite of the market and the context. We've improved our gross margin thanks to our multi-channel strategy. And based on value creation and service. Can I have a second slide? activities during this semester and then Jean Rieu will tell us about the financial aspects and then we'll have time for questions after a conclusion. As you know, the household confidence has dropped after the energy crisis and we've had a drop of consumer activity. Thanks to our operational resilience, we've managed to overcome this difficulty, and we've got a reinforced service area. And during the first semester, we've also resized our partnership in Switzerland and bought MediaMarkt in Portugal, and this will complete our offer. On that market, we have a plan which worked out successfully for 2023. As regards retail in France, it's a sector that is under a lot of pressure. The first trimester, we had a drop and the drop increased in the second semester. So that has reached minus 2.5% thanks to our resilience and our multi-channel approach. We've been able to make up for this. In France, with the sluggish consumption and negative calendar effects, We serve this at the European level, and the 3.444 million revenue is, of course, there's a calendar effect for the drop in the second semester, which represents about 1.5%. And this is because May was full of bank holidays, and the sales week was postponed to July. Even without this, the second term was characterized by a drop. And we were able, however, to have one good news is that the gross margin stayed at a level of 21%. And if you revise the impact of franchises, It really means an improvement of 35%, and that confirms the model we went for, for sustainable quality and good quality service. Number seven, we've presented the key indicators to follow the financial indicators and evolution of the strategic plan. Multi-channel with 70%, 9% of in-store, Our objective, as you know, is to reach 30 percent of mail orders, internet orders, and This corresponds to a multi-channel model with 49% of people you can click and select. So they buy online and they come and pick up their goods, which is the opportunity for some window shopping and a complete in-store experience. Then we have a wide range of products and services and shows the diversity of our offer. domestic appliance, technical products, editorial products, and industries. This is important for us because it includes diversification and it represents 15% of our activity. Now, let's concentrate on the energy aspect. We're very committed to going green and reducing gas emissions. It's part of our 2030 objectives of the CH-based target. we have a vast remodeling program for our stalls. We're installing leads everywhere. And in the first semester, we should be investing part of the €20 million, which is planned for the coming years, changing the lighting system and the electricals. We have a partnership with Valeco to increase the share of our green energy, and this has been working since April 2023. Number nine, before I conclude on this first part, I think it's important to share with you some of our ideas which have really not our development we i want to be in keeping with our approach digital approach logically we have included our customer base but also all our new customers trying to create a favorable environment for communication and It's a 360-degree approach which connects the digital approach and the in-store approach with a two-figure growth, which is, one of the best retail results in France. We started this campaign since 2021, and we hope in 2024 we think that this is going to go on improving, and we're really in a good place for the development of the choice offerings that our group can bring service is what I want to say as an introduction. Now I want to talk about some of the operational results by geographical zone. Let's see to start with the revenue and the gross margin. As was said, the group has had a first term in 2013. with over 3 billion euros. A slight drop, but the drop is compatible with other years and it's based on the loss of purchasing power and people postponing their decision to buy things which are not essential. And there's also the bad context of May and June being full of... bank holidays and the sale is not at a good date. So this explains a drop of 1.5. As our team already said, we are multi-channel and that's one of our strong points and that keeps us at a high level with 49% of click and collect sales and it shows our resilience in the long term. Now by category. We have quite a drop in the second trimester compared to the first one. There's gaming, which is going very well, a record activity. were able to stock up on some of the games which were missing for a long time. In many regions, still developing Altimax and ticket sales compared to the 22 equivalent semester, we're doing much better. And the sale of hardware has dropped because it had a favorable context last year with people equipping themselves for home offices. The area of smaller plants has not progressed either. And let's see the operational performances by geographic zones. France and Switzerland, it's dropped by 2.5%. And in France, when you look at the Bombe de France data published last year, DATI is still above average in the global market. We had to close 10 shops in Germanic Switzerland in 23 and some shops in France in 22. And now in the Iberian Peninsula, a drop of 4.3% with Portugal being in growth and Spain dropping because of the pressure on consumer behavior of a very competitive environment. Let me remind you that pending the last administrative authorization, we bought MediaMarkt in Portugal. Closing should happen in September 23. Then in Luxembourg and Belgium, it's the only region where sales have gone up. uh compared plus 1.7 percent and this is thanks to the salary increases which have improved the purchasing power of people and a new shop has opened in 22 and services have increased repairs and anti-max and other services have gone up now For the gross margin, Darty maintains its gross margin thanks to its positioning in premium goods, which means that it's easier to get the customers to pay the difference. And the progression has been plus 35 base points, 25 for the mix. thanks to sales in store sales, which have been very good, particularly for editorial goods. And plus 10% in ticket sales, thanks to good programming. Because comparing is difficult because the first trimester of last year was still affected by COVID restrictions. Now, operational costs. Inflation has been offset mainly by our efficiency program because we managed to save with this program and with an investment of 4 million compared to what we had before. If you don't count energy, the operational costs have increased only by 13 million euros thanks to a highly performant plan set up by management. and by, so as a percentage of the turnover, it's gone up by only 1.4%. The results year by year appear here. You note the effect of the effects of the rising energy costs are not entirely offset by the performance plans. There's the provision for ADLC, net income from continuing operations, and that's how we get at minus 134 million euros. with a rise of 26 million thanks to the non-recurrent financial expenses and Sterling Daphne Harper. the group invested 1.6 million in this investment fund and until 22 the participation was reassessed at its real value and after the first trimester we decided to sell this off because of the market output and the So the investment we had made gave us sales benefit of several million euros. So we end up with a minus 163. At the end of June, this is what we've got, a free cash flow. which we have results which are above those of the similar date last year. And apart from the $168 million of last year, we have a cash flow requirement, which is in keeping with the normalization of the group which we have started at the beginning of 23 and the operational investment for 63 million and 8 million for improvement of energy management.

So the financial structure of the group is healthy with nearly 1.4 million shareholders equity. The net financial debt Traditionally is higher at the end of the exercise due to the seasonality of activities. So, on the 3rd of June, 2023 net debt outside is 674M euros. You also have 470 euros available at the end of June to which to be added 500M euros, which can be called upon. So. In March 2027 to March 2028, The option was subscribed at 98.5% of our bank commitments. Therefore, we have a line of 500 million euros up until March 2027, and then 492 up until March 2028. And lastly, for the third consecutive year, the group has proposed paying out dividends of 1.4 euros per share in our General Assembly last May. It was paid on the 6th of July and represents a distribution of 38% of net results per share for the activities. For the first time, our shareholders had the option of receiving their dividends paid in shares. And this was the case for 44%, showing that there's a lot of trust. And 535 million new shares were created as of the 6th of July. At the end of June, the net ratio over 12 months shows that the leverage is at 2%, which is in keeping with our strategic plan. As you can see on slide 17, the next reimbursement will happen in 2024. And as we commented in the results presentation 2022, we wish to secure the next Debt line of 300M euros, which is maturity in May 2024. so we have set up an additional credit line, which has not been drawn upon yet. In that delayed bond loan at 300M euros, which could be drawn upon only once, but only to reimburse the bond debt for 2024. So, it's already 3 years in case of a drawdown, which is extended by 2 years. And thanks to this, the group can continue its credit line to maturity. benefiting to the low rate of 175 and secure our level of financial security. And then in S&P, we received the grade of BB+, Scope and Moody's, so BBB and then BAQ, both being stable. And this shows that they believe that our omni-channel approach is sound. as well as our financial discipline. And now I'll give the floor back to Enrique to conclude our presentation. Thank you very much. So on slide 19. The second half contracted strongly as compared to the first half. But actions were undertaken and they bore fruit. We've won market shares, we've improved our growth margins, They've also maintained strict control over our costs and operational activities. We're aware of what's ahead of us, but we know our strengths as well. There are encouraging signs, even though there's a lot of uncertainty. The level of inflation is stabilizing. There's increased household purchasing power. And lastly, the second half is usually more dynamic because there's a back to school. There's also Black Friday, Christmas, and the Rugby World Cup that will be happening this year in France. So, we know very well that when there's an event of this type, it brings people together and we hope that this will have a positive impact on the sales of technical products and especially on televisions. To conclude, we confirm our 2023 objective to reach current operating income of about 200 million euros for up until 2024. We are aiming for about 500 million euros in cumulative free cash flow for operations, and then 2025, at least 240 million in free cash flow. So this will entail very strict management of our inventory. We have to maximize around 520 million euros per year, and as somebody already said, we will be finalizing our acquisitions in Portugal, and there may be other opportunities for development. I have finished with my presentation. Thank you very much for your attention, and we are now here to answer any questions you may have. Ladies and gentlemen, if you wish to ask a question, please hit asterisk 1 on your telephone pad. We have a first question. from . You have the floor. Hello, thank you very much for taking my question. I have a question in reaction to the last comment on your M&A. Could you tell us what your viewpoint is of Cenova and the discount? Because there have been rumors or people have said that some of their activities could tie in very nicely with yours and this could allow you to gain lots of market shares. Thank you very much. People may have imagined that the acquisition has already taken place given what was said in the press. So I don't want to comment this too much in detail. As you saw, And we're looking for opportunities in Portugal where our model is relevant. So it all depends on the quality of the asset and also our capacity to generate synergies. Currently on the market, as we'd anticipated, there are more opportunities than over the past two years because, well, business is difficult for everybody. I will not comment on on what we're looking at currently. But so far, the situation is very stable. And currently, we're already a major player. And I think on the digital market, we have developed our market share very strongly. And also, Nature and Découverte, for example, they have very important presence. And today we wanted to show that we are a major player, and currently our capacity, we have a capacity to develop organically. But if there are acquisitions which we find attractive, then we will study them on a case-by-case basis. Thank you very much. The question now by Emmanuelle Vigneron of HSBC. Over to you. Yes, thank you. I would like to have more information on retail media, especially in terms of its contribution to turnover. And then what are your expectations for BSR for the year? And then lastly, for your gross margins, can one expect a similar increase for the second half? Thank you. So for BFR, as announced, it's being normalized. It's stabilizing. We've made a lot of efforts to come back to a normal level, despite results in June, which was a difficult month. For the year, as you all know, well, everything depends on sales in December. But things have returned to normal. but I'm not going to be commenting that performance today. But things are back to normal. So for this margin, generally, in absolute terms, the second half is usually lower in the first half than the first half, given the weight of Black Friday, for example. We sell a lot more technical equipment than in the first half. Generally speaking, we have a particular focus on maintaining our margins. We will continue the efforts that we started in the first half. We will continue those in the second half, but I can't quantify that today for you. And now on BSR, there seems to be something we've said, and this isn't the case everywhere. The quality of our inventory is highly satisfactory. Our teams have made a lot of efforts to adjust our offer to demand, and to make sure that their products are available despite an inflationary context. We have a satisfactory level of inventory right now, and we hope that this will lead to a satisfactory cash generation by the end of the year. Right now, so we've decided to sort of show our hand. and we see that we have to be a little bit more explicit in our communication, especially the yearly results, and perhaps a fuller report. But we can say that, well, there are more opportunities in technology. We've developed an entire network of communicators, And then also events in our stores. If you go to the Champs-Élysées, for example, you'd see what we're talking about. And this is quite unique because the stores can connect to a network which has one of the highest levels of digital traffic. And currently in the rankings, we are one of the sites that generates the most traffic in France. As compared to the Americans, I'm sure we're actually not far from number two. Thank you very much. The next question by from Brian . Over to you. Yes, I have three questions. First of all, on guidance and what this entails for the second half. and also do you think things will pick up in h2 but inflation remains high in france and then energy costs for households will start going up as as soon as the end of august and then to come back to inventory you said that you were very comfortable with your levels of inventory but what about risks for your competition? And especially, how about appetite for large appliances? And then also, for the Rugby World Cup, what boost do you expect from the World Cup, bearing in mind that during the World Cup for football, it didn't have an enormous impact? Thank you very much. Thank you for your question. As for guidance, we had anticipated that the first half would be depressed. With hindsight, there probably was a social unrest and also the fact that sales were postponed. And also some people were waiting for those sales to happen. And there's also certainly tension on people's buying power. And when there are sales, we can see that sales are more fluid. So when we promote certain products, we can see that this does have an effect. So we'll be doing much more of that during the second half. And then it's true that energy prices will be increasing. Salaries have also gone up. But what we're seeing in Belgium will be adjusted much more quickly in terms of buying power and consumption is reacting in a stronger manner. So all of this is just forecasts. And producers around us are betting that at the end of the year, people will be investing more and that consumption will be strong for everyone. And December wasn't particularly satisfactory, historically speaking. But I think in December maybe we could do better, especially in the last week. For inventory, yes, we are satisfied. I don't think that people are having difficulties with sourcing. Of course, there's a lot of tension around cash. That's true for everybody. I haven't seen any other publications yet, but I think that troubles with inventory are behind us. So on appliances, but also on computer equipment and all of this is returning to normal. I meant to finish the World Cup. It's true that World Championships usually don't have much of an impact on the sales of televisions, but The fact that the championship is in France, we're hoping that it will nonetheless have a positive impact. We don't have any figures, but we hope that it will increase sales in television. And the World Cup wasn't particularly dynamic, but it did have an impact, especially at the end of the third quarter and the beginning of the fourth, where they were to pick up. especially in large-screen televisions. So we're confident, and anyway, we're prepared for an uptake, and we will be launching a campaign next week around the World Cup of Rugby. So thank you very much.

None of these factors are very important separately, but altogether, taken together, they might have a good influence. The next question is from TPICAP. Hello. I'm referring to Clément's question about the second semester OPEC and what we can expect as regards the impact on the yearly results with the million point two and other elements which indicate that more inflation should be taken into account or salary effects. which can explain your confidence on costs. We had inflation on the first semester, which was high, and we've had between 5% and 6%, and we managed to master this and only have a rise in our costs of 1.6%. Second term, we're still going to have inflation costs, To offset, there's good and bad news. The bad news is that, well, there are difficulties, but the good news is that we're going to go on with our performance plans, and the cost of energy is not quite as much as we thought it would be. For the second semester, we'll probably have a fairly normal cost of energy, higher than last year, but something under control. the energy saving plans are a great help. Then we're going to have the effects on the salary costs. We're going to have to improve productivity to offset that. and master our expenses in the stores and for the inventory. And at SSP2, you know that we're not sure if we'll have the same level of results, but we're working on it. And as regards energy saving and the impact on the internal OPEX, I think we can count on... maintaining the present level. And when you change a store to LED, you save about 20% of energy cost. And this is, this offsets the increase in energy costs, prices. And in 2022, at the end of the, that's when we started, and we're deploying this till 24, and So the real results will appear at the end of 24. And you talked about the bad month of June, which is not what some other players consider to be true. So what about July? We're going to... have certainly to feel the impact of the riots and destruction. I don't know who had a good month of June, as far as I know, because everyone into sales has had a problem, and the manufacturers as well have been in difficulty. The non-food sector in France and in Europe There was a low in France. Last year, we had a good two weeks of sales in June, and that was good. And this year, the sales were moved, well, on the contrary, were postponed. And since we'd had bad weekends, then we had the later sales. And that explains that the June and July activity was not so good. And the government then gave an extra week, which we probably won't manage to catch up entirely. And the explanation being that we're in a global market and all the phenomena and moving the sales is probably it interacts with purchasing retention and so compared to the trends on the market, France and the Western countries have not done well generally for non-food. Last question about The free cash flow objective, the exceptional elements that we've been through for the first semester. You mean the free cash flow of $500 million that we gave ourselves over four years, but it's not for regular expenditure? And ADLC would not be inside this?

All right. If you have a question, you press star 1 on your phone. Gentlemen, if there are no more questions, there are no more questions right now, so then we're going to call it a day.

remind you that you've all deserved some good holidays and so take care. Ladies and gentlemen, this is the conclusion of today's phone conference. Thank you for participating and you may now disconnect.