Ceconomy Ag Ord

Ladies and gentlemen, thank you for standing by. Welcome to the GECONOMY Q1 2025-2026 results conference call. At this time, all participants are in a listen-only mode. The presentation will be followed by a question and answer session. To ask a question, you need to press star 1 1 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. You can also write your questions via the text box below the webcast. Please be advised that today's conference is being recorded. I will now hand over to Fabienne Caron, Vice President, Investor Relations and Communications. Please go ahead.

Thank you. Good morning, everyone, and welcome to our Q1 results. I'm joined today by our CEO, Dr. Kai-Ulrich Deissner, and our CFO, Remco Reinder. Before we begin, a brief reminder. Today's discussion will include forward-looking statements. Please refer to the disclaimer in the presentation for important information. This call is being recorded, and the recording will be available on our website later today. With that, I'm pleased to hand over to Kai to walk you through the key highlights. Kai, over to you.

Thank you, Fabienne. Good morning, everyone. Thank you for joining us today. Together with my partner in crime, our trusted CFO, Remco Reinders, I will soon take you through the results of our first quarter in financial year 25 and 26. But let's first recognize Q1 is a very important quarter for us. It includes the full peak season around Black Week and Singles Day and Cyber Week and Christmas. And in that quarter, we see millions of customers visiting our stores and our app. So at least statistically, you personally will have been part of those customers too, and hopefully even in real life and not just statistically. But effectively, it's a stress test for us, a stress test to our business model and how well we serve customers. So the key message here today is we've delivered. And we have successfully completed that stress test. Now, over the past many quarters, we said it time and again, we have been on a clear strategic journey, transforming Syconomy from a traditional retailer into what we call a true omnichannel service platform. Quarter by quarter, this strategy is paying off, also in this quarter. Just to remind you, we're tackling this transformation from two angles. First, we're building our business beyond traditional retail with some significant growth areas, as we call them, that continue to perform really well. On a four-year basis, this is now already a billion-euro business. But the second, the real driver here is our customers, because they fundamentally changed how they think about shopping, and therefore what they expect from us. Now, every team member across our 11 markets understands this shift and is very focused on delivering what we call experience electronics, putting the customer experience at the heart of what we do every day. We're creating shopping journeys that match what people today want and today need. Even though we still have a lot of work to do naturally, We're making real progress and we're committed to getting better every day. The results we present to you today underline this, that we're on a path of progress, growth in sales and profitability and customer satisfaction in online share and in our growth businesses. We think this is an exceptional achievement in our sector, particularly in a retail environment that remains highly competitive and volatile. Together, all these elements are a strong foundation for future growth. And of course, to reach our midterm targets by the end of this financial year 25 and 26. For us, this makes this year so important. It's the finishing stretch of our journey since the Capital Market Day in 2023. Ladies and gentlemen, the economy is on the right path, strategically, operationally, and financially. Our consistent performance gives us confidence, and that is why we're also confirming our positive outlook for the full year 25-26. With that, now let's look at those details of Q1. Let me start with an overview on slide three. This quarter sends a very clear message. Our strategy is continuing to work, and our business continues to have strong momentum because we're ruthlessly putting the customer in the center. Two points to back this up. One highlight I'm particularly proud of, our online share is at an all-time high, 30%. This is not just a number. It's a clear sign of our successful transformation from traditional bricks and mortar into an omni-channel retailer. Customers are choosing us across all touchpoints, and this seamless integration between online and offline is our core strength. Second, at the same time, we've achieved a record NPS Net Promoter Score, so the recommendations by our customers, of 61 in a Q1. We read this as a signal of trust from our customers for our focus on service quality, for personalized advice, and for simplifying their customer journey. Customer satisfaction is not an add-on to our strategy. It's the core of our experience electronics approach. And when you look at these two records together, online share and net promoter score, we are strengthening our foundation and building the basis for future growth. We're improving convenience through our omni-channel capabilities and we're elevating the experience through service and expertise. That balance is exactly what differentiates us. And it positions the economy with MediaMarkt and Saturn for sustainable long-term growth, even in the future. So on to slide four, you will see here that our growth continued across all key financial KPIs. Sales, EBIT, EPS, our major performance indicators all moved in the right direction. We grew our profitability now for the 12th quarter in a row, three years, quarter, quarter by quarter. That's uniquely meaningful considering the challenging economy that all of us in this sector are facing. Second, sales grew by 3.4% to now 7.6 billion euros. Adjusted EBIT in absolute figures grew by 31 million or 11% to 311 million euros in the quarter and EPS was up 23% to now 37 Eurocents. The basis of all of this, our strong sales development, was driven by two key factors. First, the increase reflects the strength of our international portfolio of countries. We will tell you more about our countries a bit later. Second, our growth businesses gained even more momentum, proving once again how critical they are now for our long-term profitability profiles. Taken together, these developments do give us confidence, confidence that our strategy is working, that our organization is executing with discipline and focus. And that's, once again, why we are reiterating our four-year guidance today. More on that at the end. Let's take one step further and go deeper into the operational performance with the next slide. That's slide five. In summary, what you can see here is the strength and the resilience of our business model during peak season. Online sales grew by 6.9% and I will repeat that our online share increased to an all time high of 30%. And our bricks and mortar business also grew during that first quarter. Profitability increased for the 12th consecutive quarter and our free cash flow was strong at 1.4 billion euros an equally strong liquidity position underneath. Even more customers now trust us, become my Mediamarkt or my Saturn members. We grew our loyalty customers to now 57 million. Next, our growth businesses now scale rapidly. This is becoming a defining element of our strategy. As you can see, service and solutions income increased significantly, and so did retail media income. And here's an interesting one. Refurbished unit sales grew almost 400%. There is clearly more and more customer demand for affordable and sustainable options, and we are meeting it. Several of our key countries delivered excellent performances. Turkey, Spain, Hungary, Italy all achieved strong sales momentum and better profitability. Now, we did see a softer demand in Germany and Austria, but this only shows how valuable our diversified international portfolio is. It gives us balance, stability, and multiple engines of growth. Overall, slide five demonstrates we're scaling the right businesses, we're executing consistently across the markets, and we're thus building a more resilient and more profitable economy at MediaMarkt Saturn that will continue to grow in the future. The next slide, number six, you will probably recognize. We presented each quarter to give you transparency about the development of the nine KPIs that we introduced at our Capital Markets Day back in 2024. because these nine KPIs represent the essence of our strategic focus. And we are getting to the finishing line now. Across the various business fields, retail core, service and solutions, marketplace, space as a service, retail media, we took big steps towards all those targets that will become due on the 30th of September, 2026. We take a step back. Retail at the core, strong momentum in our growth fields, And all of that with a focus on the customer. That's the architecture of our journey that I've outlined. And you can see how this materializes in numbers on this slide. When you look at the structure of our EBIT development, it becomes very clear how significant our growth businesses have become for the group. Our revenue and profit mix becoming more diversified, more resilient, and more future-proof. And most importantly, with more growth. As you've seen over the past quarters, this is not just a temporary effect. It marks a structural shift in how value is created within this economy. We're no longer dependent on the traditional retail cycle alone. Instead, we're building a balanced portfolio that combines the stability of our retail core, the high margins of service and solutions, marketplace, private labor spaces, service and retail media. Now next, a closer look at our peak season on slide eight. In summary, what we can say, our teams executed exceptionally well across all major product and service categories. Let's start with product. In our retail core, we saw strong performance, especially in gaming hardware, floor care, toys, and computing. Here's what sold best. The Nintendo Switch 2, the PlayStation 5, as well as robot vacuum cleaners. And interestingly, we had a substantial sales increase in toys. For example, Lego. I'm told Lego flowers are really hot on the market at the moment. So you can see that products that are beyond our core assortment can also become favorites for our customers. PCs also sold very well. mostly driven by laptops. In this context, here's another interesting detail. We've also just released our very first private label, so own gaming laptop. It's called the Experian. Now, in parallel to this retail core business, at the same time, retail media grew substantially across the whole portfolio, nearly doubled its web shop ads volume. This business is really scaling rapidly now. And we're also, as we anticipated at the end of last year, we're extending our customer base for retail media with customers outside the traditional consumer electronics sector. For example, Opel. Opel showcased the new Opel Frontera in various media mark stores in the Netherlands. Another example outside retail core services solutions delivered another strong quarter. This was primarily driven by bundling and by preparation of those bundles and value-added services in central warehouses. So a more efficient way of producing this. These bundles are key for us to reduce complexity for customers, easier to buy, and of course, reduce complexity for employees as well. So they drive on the one hand side, attachment of that service and income, and they also drive efficiency for us. Two examples. we launched maintenance packages in Turkey. These are designed to extend the lifespan of the device that the customer may have, improve long-term energy efficiency, and even help with hygiene conditions, in particular for household appliances at home. Now, in real life, each maintenance procedure is carried out either on-site, the customer, or at the service workshop by specialized technical personnel. Second example is the successful launch of what we call the Spar-Kete bundles in Germany. Here we focus on subscription contracts like antivirus or Microsoft 365 licenses combined with devices like smartphones and tablets. And there's always a clear price benefit for customers. Final milestone and interesting detail here is the collaboration between our growth field service and solutions and marketplace, because we now also offer insurances, not just for the products that we sell in our retail business, but also for marketplace in Germany, so for third-party products from independent sellers. As you can see, our peak season performance was really broad-based, fully in line with our strategy and operationally really strong. Now, before I hand over to Remco, let me have a closer look at one of those longer-term trends that we continuously emphasize, and it's circular economy on slide nine, because this really had some extra momentum in Q1. Customers are actively choosing more and more sustainable and, from their perspective, affordable alternatives. You can see that in the numbers. the better way sales share increased another two percentage points to 16%. Now, those of you who follow us more often, more regularly, please note, we had to redefine our better way scope. So what you're seeing here is the new better way logic. Why? Because new energy labels are being introduced on an EU level. So we withdrew categories without such a label. That's, for example, vacuum cleaners and coffee machines. And we also introduced new criteria for smartphones. That's why it's the new better way scope, increasing two percentage points to 16%. But most strikingly, perhaps, and importantly, refurbished sales, mainly on the marketplace for us, grew significantly by 380%. This came from more and more specialized sellers and thus a broader assortment. In December alone, one in four products sold on the marketplace was refurbished. And finally, trade-in numbers also grew. In Spain, we already launched a more efficient trade-in platform for us internally, and it shows promising results. The technology that underlies this simplifies the customer journey, or then it increases conversion, and it gives us a better return as a retailer. We'll roll out this platform in more countries throughout this year. But as you can see, with all of these developments, we're not just responding to customer expectations. We're actively shaping a more sustainable, more innovative, and future-oriented retail model around circulation. Now, let me hand over to Remco for a closer look at those financials. Remco.