Ceconomy Ag Ord

Ladies and gentlemen, thank you for standing by. Welcome to the Sea Economy Q2 and Half Year 2025-2026 Results Webcast and 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 will need to press star 1 and 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 and 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 would now like to hand the conference over to your speaker today, Fabienne Caron, Vice President, Investor Relations and Communications. Please go ahead.

Thank you, Sharon, and good morning, everyone. It's a pleasure to welcome you to our Q2 results calls today. I'm joined by our CEO, Kai-Ulrich Deissner, and our CFO, Remco Reinders. Before we begin, I'd just like to briefly remind you that today's discussion will include forward-looking statements. Please refer to the disclaimer in the presentation for further details. 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.

Thank you, Fabienne. Good morning, everyone. Thank you for joining us today. Together with my trusted CFO and my soon-to-be successor, Remco Reinders, I will now take you through the results of our first half and the second quarter of this financial year. As many of you know, we set out on this transformation journey three years ago, and we made some bold promises back then at our Capital Markets Day 23. We said we would put customers first and that we would establish a new category, experience electronics rather than consumer electronics. We said we would build a business beyond traditional retail, and we said we would deliver consistent, profitable growth. Well, I'm happy and proud that we are delivering on those promises once again with a strong half-year result. The results you'll see aren't just numbers on a slide. They are proof that our strategy is working quarter by quarter, step by step, by step. And that we're on the finishing stretch to those promises from 30 years ago. If you want it in two sentences, we're strengthening our customer relationships and we're increasing our profitability. But we must not get and we are not arrogant. We know there's still significant work ahead of us to serve our customers and to achieve our vision even beyond the commitments from our last CMD. I'll come back to this at the end of this presentation today. Now, let me start with slide three, some of our operational highlights this past quarter. I am super proud that our loyalty programs, so My Media Markt and My Saturn, have been ranked number one in the shopping category at the 2026 German Bonus Awards. Almost 150,000 consumers voted across seven categories, and they chose us over many other well-known programs. If you take a step back and remember where we come from, this recognition becomes even more meaningful. Our business used to be purely transactional, fire and forget. People came in, bought what they were looking for, and left the stores again. No true customer relationship, no loyalty, no CRM. That's different today. By now, we know many of our customers. We stay in contact and we reward their loyalty. Actually, according to this award, we're now the top player in that space. Our app is where customers want to be. That's an excellent proof of our strategy. Another example of strict customer focus is our marketplace. When you browse our online shop, you now have access to a huge assortment to our marketplace partners, way beyond traditional consumer electronics. Given the numbers, in our stores, you can usually find up to 10,000 individual products. Online, we sell a few more. But on our marketplace, there is nearly 4 million individual products available. And this marketplace has reached meaningful scale. With our launch in Switzerland in January, it now covers 98% of our footprint. This is no longer a pilot or an experiment. It is a core part of how we serve our customers. These are just two examples that show customer centricity is not a buzzword for us. It's a strategy. It's what drives every decision we make, every innovation we implement, and every service we deliver. When customers choose us, we want them to choose an experience that puts them first. We now give you an overview of our results on slide four. With one big headline, we are on course to reach our mid-term targets. We're on the finishing stretch. In H1, we delivered sales of 13.1 billion euros. That's growing 4%. This number has always adjusted for currency and portfolio changes. When you look at Q2 alone, we achieved like-for-like growth, even of 4.8%. That's solid momentum. in an admittedly challenging retail environment. And so our market shares increased in Q2 by 20 basis points. And profitability, our adjusted EBIT grew by 43 million euros. That's a 14.2% increase in H1, including another growth in Q2. And we'll, of course, walk you through the dynamics behind these numbers in more detail, but here's what I'm very happy about. Customer satisfaction continues to grow. Our net promoter score increased by two points year over year. It now stands at 62. That tells us something fundamental. The investments we're making in customer experience are paying off our customers and noticing the difference. Not perfect, but better every time. And most importantly, we confirm our outlook for 25-26. This consistency is what builds trust with our shareholders, with our stakeholders, and confidence in our strategy even beyond our targets for September 30th this year. I'll give you a bit more color on what drove this performance in the first half on slide five. First, looking close at our omni-channel sales, we saw strong momentum in Q2, even better than in the first quarter. Online sales grew by 7.3% in H1 and even by 8% in Q2. Our online share for H1 thus was 28.5% including marketplace. That's up 150 basis points. And similarly, our bricks and mortar sales grew by 2.8% in H1 but with 3.9% in Q2. For me, this is proof that omnichannel is the right strategic approach in our sector. Our customers are visiting our stores, they shop online, and they use the app across all touchpoints. And this integration is our competitive advantage. Then our growth businesses continue to scale rapidly. Service and solutions income increased strongly. Retail media income nearly doubled. And again, high double-digit G&V growth in March. I'll come back to these growth fields in a minute, but let's have a look at countries. Sales performance was especially strong in Hungary, Turkey, and Spain. Profitability improved in almost all countries, but even more in Poland, Turkey, and Hungary. On the other hand, demand in Germany and Austria remained somewhat subdued, but we are managing that actively. Most importantly, this overall development shows why our diversified international portfolio is so valuable. It gives us balance. On profitability, again, we grew 43 million euros in EBIT, with 10 million of that coming in Q2 alone. That's 30 basis points up in EBIT margin. As promised, in the last three years consistently, we're not just growing, we're growing profitably. And our cash generation rose slightly by 7 million euros above last year, with free cash flow now at minus 165 million euros. That's typical for a second quarter. Again, Remco will share more details on this later. So when I say we're on the finishing stretch to reach our midterm targets, this is exactly what I mean. Our strategy is working. Every business line is contributing, and every market is playing its part. You probably recognize this also on the next slide, number six. We present this table each quarter to give you detailed transparency about the developments of those nine KPIs that we introduced at our Capital Markets Day back in 23, the essence of our strategic focus. And we're getting to the finishing line now. Across the various business fields, retail core, service and solutions, marketplace, retail media, we took big steps towards those targets, And all of this, if you take a helicopter view, has changed the structure of our business. You can see that on slide seven. Our growth businesses now represent approximately 40% of our gross profit, up from 35% a year ago. This is what we mean when we say to move beyond traditional retail. all of our growth businesses contributed to this increase of our EBIT and gross profits. Service and solutions, marketplace, private labels, space as a service, and retail media. This matters because these businesses carry structurally higher margins, and they are less dependent on the classical consumer electronics cycle. The more we grow these segments, the more resilient and profitable our overall business becomes. This is exactly the kind of structural change that positions the economy for sustainable long-term growth in the future too. Again, I will come back to this at the end of my presentation. Let me share an operational initiative that is making a real difference for our customers on slide eight, our hub rollout. So what's a hub? A hub is a regional logistics infrastructure that handles supply and demand of larger products, for example, white goods. not just for one store, two stores, three stores, but for all stores in a larger region. Now, when you're buying a washing machine or a fridge, it's usually not a fun purchase, right? It's a household necessity, and very often it's urgent. You want it quickly, and you want to make sure it comes when we say that it comes. That's what we're delivering with these hubs. And the rollout of those is far advanced. We're targeting in Germany 14 hubs overall and 10 are already live now. This is already now reducing pressure on stock levels and improving product availability and delivery speed. And our customers appreciate that. Our delivery NPS is growing compared to our traditional approach. This is why we also have clear plans to expand this hub model to Spain, to Benelux, Italy, and Turkey, So across our European footprint. I already spoke about customer relationship management, CRM, at the beginning with our bonus programs. Let me come back to this because it's really key. Knowing our customers is so important for us because we can design our shopping experience to precisely what they need and want. Our loyalty program at the base has delivered outstanding results. Our active loyalty base grew by 26% year on year. This shows that customers aren't just signing up and then signing. They're actively choosing to shop with us. And our overall loyalty community now stands at nearly 60 million members. We're using this potential. The sales from direct marketing campaigns in Germany grew by 62%, almost two-thirds. We're successfully shifting from broad mass market messaging to relevant targeted offers that customers actually want and how they want to offer those offers. Mobile engagement continues to accelerate. Our app and mobile channels are now becoming the primary touch points for those campaigns. Looking ahead to the second half of the year, we'll scale this personalization further. This means, for example, real-time targeting and login via existing social media accounts that you may have as you know it from other services. Before I hand over to Remco, let's have a look at our sustainability numbers on slide 10. To start with better way sales, those increased by five percentage points with solid growth across the entire assortment. Secondly, trade in volumes grew by 6.7% It shows that customers increasingly value the ability to bring back their used devices. But here's the real one, right? Our refurbished business grew by 380%. Let me repeat that for you. 380%. That's driven by our own new refurbished office. And by the way, these are now part of our private label business and segment. And driven by better presentation and search results, for example, online. We see that this is bringing entirely new customers to this category. Admittedly, in absolute numbers, there's still a lot of potential, but with these growth rates, there's a clear trend that extends into the future. At this stage, let me now hand over to Remco for a closer look at our financials. Remco.