Ceconomy, the parent company of MediaMarktSaturn, has reported a stable development in the first nine months of the 2020/21 financial year. In the period from October 2020 to June 2021, the company achieved consolidated sales of Euro 16.2 billion; adjusted for currency and portfolio changes, this corresponds to an increase of 5.4 percent compared to the same period of the previous year. With an adjusted EBIT of Euro 106 million (2020: Euro 113 million), Ceconomy fell slightly short of previous year’s level.
According to a press release, the current financial year was affected by COVID-19-related closures in stationary retail for around six months, especially in Germany, which was significantly longer than in the previous year.
Although there were still restrictions in the third quarter, Ceconomy’s sales rose by 8.0 percent to Euro 4.4 billion in this period, mainly due to the positive development in the online business and persistently high demand in Spain, Italy and in Turkey. Ceconomy was thus able to more than compensate for the COVID-19-related decline in sales in its core market of Germany, where the stores where still locked in large parts of the third quarter.
Adjusted EBIT fell to Euro –93 million in the quarterly comparison (Q3 2019/20: EUR –45 million), mainly due to the normalization of the cost base, according to a press release. In the previous year, the result was supported by COVID-19-related state support such as short-time work allowance.
“My first impression is that there is still a lot to be done, but the company is basically on the right track,” said Dr. Karsten Wildberger, who took over as CEO of Ceconomy and MediaMarktSaturn August 1, 2021. “Despite the adverse circumstances, we have gron in sales and made further progress in implementing our strategy. We have prepared well for the time after Corona in order to take advantage of our opportunities across all channels to the customers. After all, one thing is certain: the consumer electronics market is and will remain an attractive growth market.“
In the third quarter of 2020/21, Ceconomy achieved further growth of 3.3 percent in its online business, reaching a volume of around Euro 1.5 billion, which corresponds to approimately a third of total sales. For comparison: in the third quarter of 2018/19, this share was still 13 percent. The pick-up rate has increased significantly: 43 percent of customers picked up the goods they had ordered online from the store (Q3 2019/20: 32 percent).
In a nine-month comparison, Ceconomy was able to increase its online sales by 75.1 percent to Euro 5.9 billion.
With Services & Solutions, Ceconomy achieved sales of Euro 243 million in the third quarter, 7.9 percent more than in the previous year. The share of this division grew again to 5.5 percent of total sales and, despite the long lockdown, reached the level of the previous year. The brokerage of warranty extensions and the range of services at the smartbars developed particularly positive. The online services business also increased.
On the basis of the business development to date, Ceconomy has updated its forecast for the current 2020/21 financial year. The company now expects a slight to moderate improvement in sales (FY 2019/20: Euro 20.8 billion) and an adjusted EBIT in the range of 210 to 250 million euros.
According to a press release, Ceconomy has terminated the syndicated loan agreement concluded in May 2020 with the participation of KfW and set up its financing structure for the period after the pandemic with the implementation of new loan facilities tied to sustainability criteria in the amount of Euro 1.06 billion. With the additional recent issuance of a five-year Euro 500 million bond, the company said it has now safeguarded the necessary financial flexibility to cover liquidity requirements even in challenging future situations.