Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fnac Darty SA (FRA:1FN, Financial) reported a resilient performance in H1 2024 despite an uncertain geopolitical and economic environment.
- All geographies returned to growth in Q2, demonstrating the robustness of the business model.
- The strategic acquisition of Unieuro is expected to significantly enhance Fnac Darty's position in the European market.
- The company confirmed its 2024 guidance, reflecting confidence in its strategic plan and operational execution.
- Fnac Darty's ESG commitment has improved, with better ratings reflecting its sustainability efforts.
Negative Points
- The economic and geopolitical environment remains uncertain, posing potential risks to future performance.
- Sales of large household appliances continued to suffer due to low volumes linked to the downturn in the property market.
- The gross margin rate was impacted by the dilutive technical effect from MediaMarkt franchise and integration.
- Operating costs increased by EUR11 million in H1 2024, partly due to higher rents and salary increases.
- Net income from continuing operations was negative EUR75 million, although it marked an improvement from the previous year.
Q & A Highlights
Q: Do you have a similar trend in your company regarding the slowdown in June due to the dissolution of the National Assembly?
A: Despite political considerations, we have returned to growth, particularly in technical products and televisions. Our results reflect a strong performance in these categories, even during the summer, which is typically a slower period for certain products like household appliances. (Enrique Martinez, CEO)
Q: Are you gaining market share due to your position in services compared to other players?
A: It's too early to tell definitively, but we believe we are performing better than the sector average, particularly due to our strong service offerings. (Enrique Martinez, CEO)
Q: Can you discuss the impact of AI technologies on your market expectations?
A: We launched a range of AI-integrated products with Microsoft in mid-June. These innovations, particularly in smartphones and computers, are expected to accelerate the replenishment cycle and boost average sales prices due to enhanced technical features. This impact will be more evident in the second half of 2024 and early 2025. (Enrique Martinez, CEO)
Q: What are your thoughts on the financial risk and flexibility related to the Unieuro acquisition?
A: The acquisition presents limited financial risk and preserves our financial flexibility. It is expected to generate at least EUR20 million in synergies annually starting in 2025, strengthening our retail model and supporting sustainable growth. (Enrique Martinez, CEO)
Q: How did the group's financial performance fare in H1 2024?
A: Our H1 2024 results are in line with expectations, with revenue of EUR3.4 billion, up 1.4% on a reported basis. All geographies returned to growth in Q2, and our gross margin improved by 10 bps, excluding the dilutive impact of the MediaMarkt integration. (Jean-brieuc Le Tinier, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
