Fnac Darty Sa Ord

Good evening and welcome to this conference call for Fnac D'Arte. Mr. Jean-Brieu Le Tine, the Chief Financial Officer, will be facilitating this call. Over to you, sir. Thank you very much. Good evening, everybody. Thank you for attending our conference call for the presentation of activity for the first quarter of 2026. Tonight, I'm joined by the Investors Relations Team, Domiti Vienne, Laura Parizeau. I'll be presenting our results and we'll then take your questions. On slide two, you can see the key elements for the first quarter that I will be detailing throughout this presentation. Our group's revenue has been up by 1% on a life-to-life basis on the quarter, driven by the very good performance of the rest of Europe and of our sales online. Our gross margin is also up with a 10 basis point improvement against the first quarter of 2025. The improvement of subscription services, particularly Dartimax, has offset a negative product mix. Indeed, some categories that are strong contributors to the group's gross margin have been declining throughout the period, like book sales, for example. Of course, we'll come back to EP's group's public tender offer that was filed on the 10th of March, 2026, with the AMF, French Financial Market Authority, which should be completed in the second half of 2026. On slide three, as I said in my opening remarks, Fnac Dartia reported in the first quarter revenues that are up by 0.9% on a like-for-like basis. Our online sales amount to 22% of the revenues for this period and are up by more than 5%. Click and collect, which is a key metric of our performance, accounts for half of our online sales this quarter. Now, let's look at our performance by category. The positive signals observed at the end of 2025 on the sales of domestic appliances are still there. Small domestic appliances are still showing a good performance and large domestic appliances are growing again. Technical products are also improving thanks to good sales in computers with the renewal cycle of PCs sold during COVID, the end of Windows 10 support, but also the highly anticipated launch of the new Apple range. This offsets the lower performance of telephone and television. The Football World Cup, however, should have a positive impact for the next quarter. Services and diversification are continuing to show positive momentum and are still growing. Edith Hill products are on the wane due to particularly inactive book market at the start of the year. Now let's look at the detail of the group's performance by geographical area. France, which accounts for 60% of the group's total revenues, is almost stable at plus 0.1% life-life basis against the first quarter of 2025. The consumer context in France remains challenging, will still perform well, and much better than the market trend according to the Bank of France figures that were published at the start of the week. In the rest of Europe, that accounts for 40% of the group's total revenues. Activity is faring well, with our revenues up by 2% on a like-for-like basis. Italy is slightly growing on a like-for-like basis. Domestic appliances sales have been declining. It is worth mentioning that we have an impact due to the unfavorable comparative base time for gaming. Belgium is up by 3.2% like-for-like basis driven by the momentum for online sales. Portugal is up by 9.8% like-for-like basis driven by the momentum of in-store sales and services for Fnac and Darty likewise. Stools that are operated under the Darty brand since end of 2025 have performed really well. Spain is also improving, plus 5.5% on a like-for-like basis, driven by the very good momentum of stores. The stores that were refurbished in 2025 have posted outstanding results. Last, Switzerland, where activity is slightly on the wane, minus 1.1% on a like-for-like basis, mainly impacted by the decline of the group market. Now, a few words on the current public tender offer. As you know, EP Group announced a cash offer for Fnac Darty shares. Fnac Darty shares EP Group is our main shareholder, has been our main shareholder since 2023 and has coordinated with its subsidiary base hours that hold 28.5% of our share capital. The proposed offer is subject to the monetary success threshold of 50% of the share capital of voting rights as set out in the AMF general regulation. EP's offer is the logical consideration of the strong partnership we've had forged together over the past several years. It is a key milestone to support the acceleration of our strategic plan beyond every day. In the current environment, marked by profound shifts in consumer expectations and behaviour, the support of a stable long-term shareholder is a significant asset. But I'd like to point out that our payout policy remains unchanged, with a payout ratio in excess of 40%, which we confirmed in February, with a dividend of one euro per share, which will be put to the general meeting on the 27th of May. Besides, EP Group does not intend to implement a squeeze-out procedure at the end of the offer. After reviewing the draft response notes and taking notes of the findings of the Le Doublou consultancy that acts as an independent expert which confirmed the fairness of the financial conditions of the offer and the recommendation of the Ad-Hoc Committee, the Board of Directors unanimously issued a favourable reasoned opinion. The Board considered that the offer was in line with the interests of the company, its shareholders and its employees. Besides, the Board also found that the implementation of this project would offer liquidity opportunity and immediate liquidity opportunity to shareholders who are interested with a price of €36 per share that would be attached with a 25-minute that would be attached which would account for 90% premium over the last closing price before the announcement of the offer, and 24% and 26% price on the VWAP, one month and three month VWAP, as well as the OCEAN bonds for a price of €81.12 by OCEAN. The Board also noted that maintaining the listing, even if the conditions for mandatory squeeze-out were met, would allow shareholders who wish to do so to continue benefiting from FNAC data's potential. Shareholders who retain all or part of their shares will remain exposed to the company's risk, including the risk of reduced liquidity in the stock, depending on the number of shares tendered in the offer, as well as share price fluctuations. On slide 5, you can see the timeline. The offer was filed on the 10th of March and is currently being reviewed by the AMF. Forendite investment clearance in France for FDIs was obtained on March 26th. We expect to launch the offer in the Q2 of 2026 subject to abstaining the EMF approval and foreign investment control clearance, the FSR. The offer is therefore expected to close following the receipt of antitrust clearance in the second half of 2026. Let's move on to slide six. In the current complex geopolitical context, our performance has demonstrated the group's resiliency. At this point, we have not found any impact on our activity. In this regard, March is actually a marked improvement against the first two months of the year. Operationally, our supply chain remains robust, our products are inherently non-seasonal, we maintain satisfactory inventories, and their logistics flows are ready to sail by the Cape of Good Hope for delivery to Europe. However, We continue to monitor household confidence closely in this highly uncertain environment. As I said, we will put to the vote of the general meeting on the 27th of May, one euro per share dividend, which would be ex-dividend on the 3rd of June and paid on the 5th. Furthermore, as announced last January, we have begun the search for partners for Nature et Découverte. We have already received preliminary expressions of interest, which gives us confidence in the process moving forward. The finalization of documentation for potential requires and when is expected to be shared with interested parties in the coming weeks. We confirm our objective for 2026, an improvement in our current operating margin and our free cash flow. And of course, we confirm the 2030 objectives of our Beyond Everyday plan. Thank you very much for your attention. We are now ready to take your questions.

Thank you, ladies and gentlemen. If you wish to ask a question, please press star 1 on your telephone keypad. I'll remind you that you can press star 1 on your telephone keypad to join the queue. Mr. Letinier? Mr. Letinier, there are no questions. Perfect. Well, thank you very much. I'll wrap up. Well, I'll remind you that regarding the time frame, our general shareholders meeting will take place on the 27th of May and we encourage you all to vote and see you again on the 22nd of July after closing of the market for our first half results. Thank you very much for your attention and have a great evening. Ladies and gentlemen, this is the end of today's earnings call. Thank you for taking part. You may now disconnect.