CECONOMY AG (“CECONOMY”), Europe’s leading company for consumer electronics, started the new financial year with good customer demand, generating sales of €7.0 billion in the first quarter of 2023/24 (Q1 2022/23: €7.1 billion). Adjusted for currency effects and portfolio changes, sales were therefore up 3.7 % year-on-year. In the reporting period, adjusted operating earnings (EBIT²) amounted to around €248 million, up around €18 million on the previous year’s figure (Q1 2022/23: €230 million). CECONOMY benefited from high customer demand in the Black Friday period and in Christmas business as well as positive development in the Western/Southern Europe and Eastern Europe segments.

Further recovery in Western/Southern Europe, tough market environment in DACH region

CECONOMY’s business performance in the individual segments was largely positive in the first quarter. In the Western/Southern Europe segment, sales rose by 2.4 %¹ compared with the prior- year period. In particular, the Netherlands saw sales growth because of good development in the online business and strong demand in the Black Friday period. The Eastern Europe segment also achieved substantial growth again thanks to strong sales development in Türkiye. In contrast, sales in the DACH segment declined, which is due to a weak retail and market environment and lower customer demand in Germany.

Successful peak season with growing online share

For CECONOMY and MediaMarktSaturn, the first quarter is traditionally characterized by the important Black Friday and Christmas business. This was very successful for the company in the current financial year. Although demand in the brick-and-mortar business declined slightly, CECONOMY registered slight sales growth of 0.2 % to a total of €1.8 billion in the online business. The online share of total sales therefore increased to 26.4 %³ in the first quarter (Q1 2022/23: 25.8 %). Across Europe, gaming, floor care and white goods were particularly popular product groups among customers doing their Christmas shopping.

Good Marketplace and retail media business, stable Services & Solutions business

The Marketplace offering, as an extension of MediaMarktSaturn’s product range, is developing well: In the first quarter, CECONOMY more than doubled its Marketplace sales (gross merchandise value) to €81 million (Q1 2022/23: €36 million). At the end of December, the company already had over 1,200 sellers with a total of nearly 1.6 million products on its platform.

The Services & Solutions share of total sales was stable at 5.6 % (Q1 2022/23: 5.6 %). Extended warranties performed well.

Sales in the retail media business grew significantly in the first quarter, increasing by 92 % compared with the previous year. This improvement was mainly driven by Germany and the Netherlands. CECONOMY is continually expanding its range of retail media products and solutions in all its markets.

Strong free cash flow generation in Q1, liquidity position above €2 billion

Despite high product availability for the peak season, CECONOMY had a strong liquidity position of €2.4 billion at the end of the first quarter. This is in line with the Group’s medium-term financial projection. Free cash flow resulted in cash inflow of around €1.5 billion.

“We are still focusing on significantly higher profitability and cash generation with strict cost discipline. And we continue to deliver in this regard,” said Dr Kai-Ulrich Deissner, CFO of CECONOMY AG. “Our improved EBIT in the first quarter is due among other things to an increased gross margin and effective cost control. Step by step, we are working to achieve the medium-term targets we presented at Capital Markets Day.”

New record for customer satisfaction; number of MediaMarktSaturn Club members passes 40 million

In the implementation of their strategy, CECONOMY and MediaMarktSaturn are doing everything to further improve the customer experience and customer satisfaction across all channels. A benchmark for measuring their progress is the net promoter score (NPS). In the first quarter, the company increased its NPS to 56, the highest figure since measurements began.

The Group also set a new record for the number of MediaMarktSaturn Club members: For the first time, the MyMediaMarkt and MySaturn customer loyalty programmes counted a total of around 40 million members in the first quarter of this financial year.

Generative AI for employees and MediaMarktSaturn customers

CECONOMY and MediaMarktSaturn are working continuously to make the shopping and working experience even more attractive for customers and employees. In this light, the company has spent the last few months developing business-relevant tools based on generative AI (artificial intelligence). With their own “GenAI Sandbox”, for example, employees will soon be able to test generative AI in the company’s own secure environment and use it for their everyday work. In the future, customers will also benefit from artificial intelligence, for instance in the form of real-time translation in contact centres and online-based sales assistants. CECONOMY plans to roll out the first tools to individual countries in early 2024.

Outlook: Slight increase in total sales adjusted for currency and portfolio change effects and clear improvement in adjusted EBIT

CECONOMY has set itself the following targets for 2023/24: The company again expects a slight increase in total sales adjusted for currency and portfolio change effects and a clear improvement in adjusted EBIT. All segments will contribute to sales growth. The expected improvement in adjusted EBIT is thanks to the DACH and Western/Southern Europe segments.