Fnac Darty Sa Ord

Good evening, everyone, and I'm delighted to be here with you to share our results, our revenues with you for 2023. For this presentation, I shall first give you an overview of our activities and detail some of the more strategic initiatives that we undertook in 2023 concerning the main success factors of our roadmap. And then Jean-Brieuc here, our CFO, will give you a summary of our revenues. Then I'll come back and I will share the conclusions for you and be here for your questions. 2023 was an extremely busy year and I'm very satisfied by our performance. In a macroeconomic rather constrained context, we worked towards meeting our goals for every day, our strategic plan, and we were even able to accelerate an in-depth transformation of our digital client and service model. In 2023, we crossed the one million subscriber mark at Darty Max, and it just goes to show that we have our commitment towards durable and responsible consumption. We also finalized our projects which are extremely ambitious for development of our e-commerce activity to further strengthen our unique European position. This collective success was thanks to our employees who gave much proof of their ability to adapt as best as they could to changes in our sector and to expectations of our customers. I am confident that we shall continue in our project and I'm enthusiastic about starting 2024 for several reasons. Indeed, 2024 represents 70 years of FNAC, FNAC's existence, 50 years of the Contrat de Confiance, Dati, and, of course, it's the Olympics year and Paralympics year in Paris. We'd be here to welcome that event after 100 years, an exceptional event, and we are extremely proud that we are contributing towards its official sponsorship. We will be highlighting all our know-how and expertise to contribute towards the outreach of this movement and the coming together and festivities in our stores and on our online sites. What's better than pictures to illustrate all this? Here's a video.

Intensément. Pour être prêt le grand. Pour donner le meilleur de nous-mêmes. Et ce n'est pas forcément pour être applaudi, ni pour être admiré. C'est avant tout pour mettre nos talents au service de tous nos clients. Courir vite pour tenir une promesse. Faire monter l'exigence, la qualité, la réactivité jusqu'au plus haut niveau. Changer de discipline au nom de l'esprit d'équipe. Battre des records d'enthousiasme, de concentration, de créativité. Se lancer dans une course vers toujours plus de service et de satisfaction. Chez Fnac Darty, nous avons fait triompher nos valeurs et nos différences. Nous avons gagné en performance, gagné en solidarité, gagné en expertise, gagné en reconnaissance, gagné en engagement. Tous ensemble, nous avons fait briller le collectif. Tous ensemble, nous avons vécu de grands moments. Tout le monde a participé et tout le monde a gagné. Et si elle était là, notre plus belle médaille ? Un nouveau défi s'offre à nous. Excellent. Excellent.

So I'd like to start this presentation of 2023 with a focus on our major product markets. Now, you've got in front of you on the left, you've got the growth in value of our markets. And there are three major categories of products. You've got home appliances, technical products, and editorial products. On the right side, you see the growth in volume. And as you will see, we still haven't absorbed the excess of volumes created in 2020. However, the difference in value and trends are very different. Indeed, as far as our editorial products are concerned, they're displaying good momentum and are essentially driven by sales in 2020. gaming and book sales. On the other hand, home appliances are showing a slight decrease in sales progression and are not really made up for volumes that still remain down after the COVID period. Technical products are showing a slight improvement in terms of value, and they are driven by telephony sound and photo that compensate the sharp drop in TV and IT equipment. These last two segments have always been suffering because of the high level of equipment bought during the health crisis and absence of innovation in the market of PC. Since the market, since the increase in activity during the COVID period, we never got back to the same levels. These changes have really impacted the retail sector, which is changing a lot. And now we see that there is a market concentrating around specialists and Besides, growth in e-commerce is extremely expected and it will have a direct impact on pure players. In this complex environment, we have once again shown our resilience thanks to the strategy that we've been implementing for three years now in our everyday plan. To begin with, given the drop in volumes, we've maintained revenues and managed to maintain our gross margin. Our omni-channel strategy has a plus point. The negative impact of mixed product and the growth of Gaming 7 and telephony has had a positive impact on mixed channel with an increase in business in stores and growth of services. So we shall have to remain on our toes to keep inflation down, interest rates down, and be extremely flexible. As Jean-Pierre says, we have also continued managed to reduce the increase in costs by 1.4% in 2023. And finally, in view of the slump in household consumption and the confidence index has never been so low in these last 10 years, we've undertaken initiatives to stimulate growth and show that we can still make money as we did with the takeover of certain parts of media market in Portugal, which has strengthened our position since the 1st of October in 2023. I'd also like to point out that the litigation related to the divestment of Comet has finally come to a close. In effect, on the 12th of February last year, the Supreme Court of London turned down the appeal of the liquidator of the Comet Group Limited, contesting the judgment made by the Court of Appeal in London in October 23 in favor of Daugherty. FNAC Daugherty should receive the balance of the sum initially paid in 2022. and we feel that we should be seeing a total refunding of costs and legal costs, interests, etc., which will give us €40 million extra of positive cash flow in the first quarter of 2024. We are delighted that we finally put a foot stop to this entire incident, which started in 2012. Let's get back to the fundamentals of our everyday strategic plan, which is based on the reason why we do this business, committed towards informed choice and sustainable... This is based on three pillars. The first one is our omni-channel strategy that offers an optimal customer experience, and thanks to its extremely efficient digital offer and network of stores of extremely great quality. Secondly, it's also based on diversified products, and that gives special importance to sustainability and repairs. And we have services via subscriptions for technical assistance and after-sales services. Let me now tell you about it in detail. Our omni-channel strategy is adapted to different methods of consumption for customers. So you have each time a physical experience and digital experience and a mix of both. We have a huge network of 1,000 stores which covers all our territories, France, Switzerland, Spain, Portugal, Belgium, and Luxembourg. This represents nearly 78% of our total sales, backed by our strong digital presence on 14 internet sites and our own platform of marketplace. This represents 22% of our sales. 27.5 million visitors come online every month in France for our sites, Snack and Darty, and we are number two players insofar as e-commerce, the busiest e-commerce is concerned. Best proof of our success is the omni-channel strategy that we've employed, which represents 50% of our total digital sales, and that we see at Click and Collect. The second pillar of our strategy is the diversity of our offer, which represents 47% in technical products of our total revenues and 20% in home appliances, editorial products 18%, and other services, which are now up to 15%. This diversity gives us greater resilience and less vulnerability to sometimes volatile changes in various sections. We are leaders and recognized as such in various categories, which gives us an additional advantage. And we are undisputedly number one in certain editorial products, books and discs and services, ticketing, et cetera, and number one repairers in France. Our third pillar and strategy is this offer of services that we provide to via subscription and which meet a strong expectation, a keen expectation of our customers and enable us to generate a recurrent revenue stream. In 2023, we crossed the mark of 20 million subscribers for Darty Maxa. And actually, we had 1,125,000 subscribers end of 2023. We are aiming at 2 million by 2025. So this method of subscription is much more expected by our customers, and we have covered nearly 12 million products by DartyMax in just a single year. Our development of this service model through subscription is accompanied by FNACV Digital for IT use, and which is now part and parcel of our customers' daily life. And then you've got Maison Relax with our partner HomeServe for all home repairs. And that commits our customers. That means that they have an informed choice and sustainable consumption in all categories and products, editorial, technical, and also appliances. This shows that the group is very strongly involved in culture. We have the Goncourt Award for high school students that we created in 1988, and we've been organizing it for 35 years. Awards are now also given for reference literary, which have become a reference for literary awards and are recommended on the reading list. And they're the most sold in France. We also accompany it with the FNAC Novels Award, and it's the first prize for this season, the literary season. It's been like that since the last 20 years in all our FNAC bookshops and FNAC members, as well as comic book... Price with France Inter. The giving of these awards has been a real booster for our sales, and we've been riding the wave of this popularity in the comic book sector particularly. Fnac Dati is also committed towards technology. Since 1972, Fnac developed its own Fnac Labo for testing products completely independently and guiding its consumers as of its own test protocols. This was the only time we had this concept in the world, and we tested 531 products in 2023. And now this is part of FNAC V Digital, a service that's available on subscription. Our customers can be guided by experts at the Lab of FNAC and that for their various digital uses every day. Since 2021, all our recommendations in cultural technological feeds are also available on our site called Les Claires FNAC. which is recording excellent increase in traffic of nearly a million hits per month, very unique in 2023. And finally, we are committed towards extending the life and duration of our products and promoting sustainable behavior. So we are doing this through DatiMax repairs, and we have a label called Choix Durable. which is present in our stores to guide our customers towards reliable products in all categories, which according to our after-sales barometer at Fnac Dati is now best-traded brands for the six consecutive years in terms of repairability, reliability, and the impact on the environment. Besides, we talk about enlightened delivery, and especially we commit ourselves We encourage our customers to repair rather than replace. We've also started continuing the hiring and acceleration of training for new technicians, more than 300 in 2023, to meet this growing need for repairs. So Second Life is another business that we have, and that is to meet our environmental ambitions in terms of circular economy. In 2023, the resale values under the name brands Fnac Second Vie and Darty Second Vie increased by 30% and reached 120 million euros. At Fnac Dati, the Second Life is not just a second-choice product. Our Second Life products provide the same guarantee of quality and the same service conditions of delivery as do our new products. They get a two-year guarantee, and people who are subscribing to Dati Maxx are eligible to it. This Second Life offer today is expanding greatly and is dovetailing perfectly with the offer for new products. And provided, offered at lower prices, it gives you a perfect, it gives you very competitive rates. And it's easily found in all our shelves along with the new products. What's more, Being the first collector in France, we are perfectly positioned for a natural stream of quality products of eligible home appliances for a second life. Given this demand, we have implemented several recycling services. And so now, on this slide, you see all the various strategic initiatives that we've undertaken with our very efficient partnerships, and that will boost our marketplace. To begin with, we have brought in-house the... the management of our marketplace, and we have merged the back office of NAC and DATI. And today we've got 3,600 sales partners with 35 million offers in terms of activity. This will improve our position as leaders, as online sales in categories. We've also signed up a collaboration with Rakuten France in September 23 to increase our presence online, and so we'll have an outreach to 15 million new users per month. We want to go even further. With Seval Logistics, a subsidiary of CMA CGM, we have united our forces to create Weaven, a future major European logistics e-commerce player and of the SaaS marketplace. This company means to simplify the daily life of our salespeople by proposing a turnkey marketplace. We have obtained the required clearances since early January, and operations should kick off in the first half of 2024. We are aiming at €200 million of revenue and an operational margin in double digits in the next five years. Talking of innovation, let's just go on to another activity in the group which is really going up. RetailLink is our advertising department. It's omnichannel, 100%. and which deploys offers that enables brands to get close to their own community of users to meet their aims and objectives in publicity and commitment and sales. Since 21, we launched 1,600 campaigns in our business, and that represents nearly €90 million of revenue in 2023. Between 2019 and 2023, sales and operational margin increased by plus 40%, just showing our leadership in this field and taking advantage of our omnichannel position. On the right, you have a few illustrations of what we can do for our customers on these communicative screens, either in digital or in stores. In 2023, we increased our digital transformation thanks to partnerships that we had developed over the last few years and and we have undertaken the modernization, a major modernization of our data structure in 2021 with our partnership with Google to include search tools like Google Cloud Retail. These tools include options now for extended analytics for AI and learning. There are different case studies going on with AI that we are testing today. In fact, some of our developers are using these tools like CoPilot, and that enables us to generate qualitative content for marketplace and accelerate the moderation of content to gain inefficiency during after-sales operations. We have our ambition now, actually, is to give further importance to being responsible and protective and experiment that we are using to implement generative AI with our employees and to create value and service. Now, what I wish to talk to you about is our social and societal responsibility as a firm and a company, which is a regular pillar of our group strategy. Our ESG policy, I might remind you, is based on five pillars, sustainable consumption, climate conservation, development of human capital, ethical business, and commitment in our various markets. And we are determined to provide results. On the right, you can see that we have reached our aim in our everyday plan to reduce our direct emissions by 50% by 2030 as opposed to 2019. End of 23, we'd already come down to minus 26% compared to 2019. We also fixed another aim in reducing by 15% our electricity consumption in France. between now and 2024. This is already a reality, thanks to the conversion of our entire store networks to full LED lighting and also centralized management of heating and cooling of HVAC. Concerning human capital, we've accelerated various action plans to develop the diversity within the group of various advances that we've made. Concerning women and the role of women, the top 200 managers had 33% in 2023. That's plus three points compared to 2022. And finally, we have maintained a score of CDPA- despite a hardening of scoring criteria. In conclusion, in this first part, in 2023, we are confirming our commitment towards our customers and our employees. And proof of this is the increase of two points in our score in 2023 in the customer satisfaction index. Besides, FNAC and I are more than compensated for all that they have done through the equal responsible actions of their customers, etc. And we have also revealed a new platform for the brand Darty, which will further consolidate our commitment towards customers. sustainability with a larger number. So it's all set to last. And finally, one last point, which is very important. Attractivity, retention and commitment of our employees are a very determining factor in our company enterprise project. And given the expectations which are increasingly high of our employees and the lack of skills in certain fields as we have in repairs. We've made an effort in terms of training in 2023. 94% of our employees received training and more than 230 employees were trained for various different business lines, repair technicians, etc. 180 new technicians were also recruited with permanent contracts. We have opened 27 apprenticeships also and as you know, we are working actively with all our employees, and we thank them here for their commitment for working with us together on a daily basis and making all this such a success. Over to you, Jean-Brieuc.