Fnac Darty: 2020 full year results

2020 performance that confirms the power of Fnac Darty’s omnichannel model in a year of unprecedented crisis

Proposal to pay a dividend of €1 per share for 2020

Announcement of the strategic plan Everyday

• Revenues at €7,491 million in 2020, up +1.9% in reported data and +0.6% on a like-for-like basis¹, driven by strong growth in sales in the 4^th quarter to +9.6% on a like-for-like basis¹

• Very strong momentum on the digital side in 2020: growth of more than +55% in online sales, representing 29% of the Group’s revenues, and a gain of more than 5 million new active online customers

• Demonstrated relevance of the omnichannel model with an increase of close to 30% in the volume of click & collect orders processed in 2020

• Net income from continuing operations, Group share, at €96 million in 2020, down -€19 million from 2019

• Reactivation of the shareholder return policy with the proposed payment of an ordinary dividend of €1.00 per share for the year 2020²

• Trend in cumulative revenues in mid-February 2021 equivalent to that seen in the 4^th quarter of 2020

Enrique Martinez, Chief Executive Officer of Fnac Darty, declared: “I am extremely proud of the work done by the Group’s teams throughout 2020 and of their commitment in the face of the immense challenges that we faced. The strength and suitability of our omnichannel model enabled us to deliver strong performances this year. This performance now allows us to repay the state-guaranteed loan obtained last April from our banks. This will be repaid by April 2021. I would once again like to thank government representatives—in particular the Bercy teams—for the quality of the measures made available to companies to help them deal with the exceptional situation arising from the COVID-19 crisis.
In addition, in accordance with the dividend policy announced in February 2020, we have decided to reactivate the shareholder returns policy with the proposed payment of an ordinary dividend of €1.00 per share, starting this year, for 2020.”

KEY FIGURES

(€ millions)		2019			2020	Change
Revenues		7,349			7,491	+1.9%
Change on like-for-like basis3						+0.6%
Current operating income (COI)		293			215	-€78m
Net income from continuing operations, Group share4		115			96	-€19m
Free cash flow from operations, excluding IFRS 165		173			192	+€19m

2020 HIGHLIGHTS

Growth in 2020 revenues in the context of an unprecedented health crisis

Fnac Darty’s 2020 revenues totaled €7,491 million, up +0.6% on a like-for-like basis¹. This performance was achieved in the context of an unprecedented health crisis marked, in particular, by two lockdown periods. During the first lockdown (March 15 - May 10, 2020), almost all the Group’s stores were closed and online sales increased sharply thanks to the agility and power of the Group’s centralized logistics and delivery capacities. During the second lockdown (October 29 - November 28, 2020), online and click & collect sales were available for all products, easing the impact of the closure on departments deemed non-essential in stores. Over the year as a whole, the solid growth in online sales of more than +55%, driven primarily by the gain of over five million new active online customers and the power of the omnichannel model, more than offset the decline in footfall in stores.

Additional revenues related to the consolidation of Nature & Découvertes⁶ over a full year amounted to €83 million in 2020.

The gross margin rate reached 29.2% in 2020, down -120 basis points from 2019, primarily due to an unfavorable product mix effect of -80 basis points linked to a drop in footfall in-store, which particularly penalized editorial products that are very sensitive to impulse purchases and a sharp increase in sales of consumer electronics. Ticket sales, which fell sharply, impacted the gross margin rate by -45 basis points. Finally, the consolidation of Nature & Découvertes over a full year offset the decline in other retail services impacted by drop in footfall in stores.

Current operating income totaled €215 million in 2020, down -€78 million over one year. After an operating loss recorded in the first half, primarily tied to the health crisis, good control of operating costs and the full effect of the readjustment plans helped Fnac Darty maintain an operating margin in the second half of 2020 that was stable with respect to the second half of 2019. The consolidation of Nature & Découvertes over a full year in 2020 had a negative impact of -€16 million on 2020 current operating income for the period due to the normal season activity of the brand.

Net income from continuing operations, Group share, was €96 million in 2020 versus €115 million in 2019. The limited decline primarily represents the reduction in non-current items, financial expenses and the tax liability compared with 2019.

Fnac Darty continued strong generation of free cash flow from operations⁷ at €192 million in 2020, up +€19 million from 2019.

A group committed to and recognized for corporate social responsibility

In the context of the unprecedented Covid-19 health crisis, the Group’s priority was to guarantee the health and safety of the employees and customers by implementing the best protection measures, ahead of legal obligations. Good management of this crisis was therefore based on the adoption of collective and organized measures, which was possible thanks to the quality of social dialogue within the Group to ensure business continuity. All the measures taken by the Group, which helped to contain the number of infections, were praised by the customers of the banners, but also by the different administrations whose control inspections were all conclusive. Fnac Darty was able to demonstrate its agility and capacity for rapid adaptation in a changing environment to meet the consumers’ urgent need to be equipped for working and learning from home.

Despite the atypical context that prevailed in 2020, the Group pursued its initiatives to become a major player in the circular economy, and a promoter for extending the life span of the products. Fnac Darty therefore continued the roll-out of its new repair subscription service, Darty Max, launched in October 2019, and designed to extend the life span of large household appliances. This service carries on the Group’s longstanding commitment to responsible consumption. At the end of 2020, around 200,000 customers had subscribed to this service, and several thousand appliances had been repaired each month thanks to Darty Max, representing tens of tons of waste prevented.

The Group also pursued its initiatives in supporting its customers toward an educated choice and sustainable consumption with the launch of the third edition of the “after-sales service barometer” in September 2020, which is designed to give the public better information about the life span of 63 product families from the universe of appliances and multimedia, compared with 15 the previous year. This new edition, available to all our customers on our websites and in stores, now has a sustainability score, easily identifiable, aggregating both reliability and reparability criteria — an innovation that allows all categories of products to be compared with each other and for a comparison to be made between the brands. The Group has also used this sustainability score to expand the selection of products with the Darty Sustainable Choice label, which now includes 152 products (83 large appliances and 69 small appliances). Implemented in all Darty stores, this new information is based on two criteria: the availability of spare parts for at least ten years, and the low breakdown rate of the product with respect to its price category. Finally, the Darty Occasion recycling scheme has been extended to include cold-category appliances, including refrigerators and freezers, in order to give a second life to all types of electronic products and appliances offered and to boost the Group’s positioning in this growth market.

All these initiatives in societal and environmental responsibility were recognized by the extra-financial ratings agencies in 2020. Fnac Darty thus earned a score of 48/100 from Vigeo Eiris this year, up +4 points from 2019, and confirmed its positioning in the “Outperformer” classification of Sustainalytics with a score of 68/100, along with its AA rating from MSCI. Finally, the Carbon Disclosure Project (CDP), the international benchmark in environmental transparency for businesses, gave Fnac Darty a rating of C, in line with the average for the sector.

In addition, Fnac Darty ensures that these challenges are fully incorporated into the Group’s strategy, and adopts a decentralized approach to CSR by involving all the business lines daily through the nomination of a CSR referee, the creation of roadmaps with the definition of objectives specific to each department of the Group, and regular monitoring of those objectives. Finally, Fnac Darty has continued to strengthen the integration of CSR criteria in the variable compensation of all Group managers in addition to an increase in the weight of these criteria for members of the Executive Committee.

Fnac Darty’s unique and highly agile omnichannel model and solid business execution

The year 2020 was marked by the Covid-19 crisis and its spread around the world overwhelmed all business sectors, including retail. While guaranteeing the health and safety of its employees and customers, Fnac Darty then demonstrated its capacity for rapid adaptation and its operational agility in order to continue its service, delivery and after-sale service activities.

Fnac Darty first had to face a supply crisis related to production delays generated by disturbances in the industrial bases in China following the arrival of the epidemic on Chinese territory at the beginning of the year. The Group had to adapt its merchandise purchasing policy to deal with production delays and develop a tactical purchasing plan for categories of key products in close collaboration with its suppliers.

Starting in March, the pandemic spread across Europe, leading to the implementation of lockdown measures by all governments in the countries in which Fnac Darty does business. These measures led to the closure of almost all the Group’s stores, representing 80% of the Group’s normal revenues, from March 15 through May 10, resulting in a total shutdown of in-store sales. Backed by the centralized organization of its logistics platforms and the strength of its digital platforms, the Group was able to quickly adapt its model and meet the very high demand thanks to the unfailing commitment of its teams and the rapid reassignment of resources to digital capacities and service activities. The Group also relied on its partnership ecosystem of delivery providers and its in-house delivery capabilities, which allowed it to ensure delivery times in line with the highest market standards.

At the same time, another Fnac Darty priority was to protect the Group’s profitability and liquidity. 80% of its workforce was furloughed following the closure of the store network during the first lockdown. The Group adjusted its rent payments, shifted the payment of taxes and social security deductions, and established a policy of targeted merchandise and inventory purchases. The Group also negotiated longer payment terms with its suppliers in accordance with the French law on economic modernization (known as the “LME”). The investment plan was revised downward, while preserving the Group's priority projects. Finally, Fnac Darty was one of the first issuers in France to receive a €500 million State-Guaranteed Loan in April.

At the end of the first lockdown required by governments, the Group began to progressively reopen its stores. Almost all stores in France, Switzerland and Belgium reopened the week of May 11, while stores in Portugal re-opened on May 15. In Spain, stores reopened very gradually throughout the month with the last of them opening at the end of the first week in June. In line with its commitment to ensure the health and safety of its employees, partners and customers, Fnac Darty implemented all necessary health measures to ensure the successful reopening of its stores, which was permitted thanks to the advance preparation of employees and their unfailing commitment.

The Group’s quality relationship with its suppliers and the solid commercial capacity of its teams allowed it to obtain a good level of product availability throughout the year and to meet the high demand in categories of products related to telecommuting, at-home learning, gaming and home equipment.

Faced with the increased spread of the virus in October 2020, new lockdown measures were implemented in France from October 29 to November 28, resulting in the closure of the departments of product categories deemed non-essential by the Government (editorial products including books, large appliances, games & toys). All Fnac and Darty stores remained open in France during this period for the sale of consumer electronics, small household appliances and urban mobility, which represented more than 60% of normal product sales. For the other categories, online and click & collect sales authorized during this second lockdown recorded high demand. Once again, Fnac Darty had to demonstrate a strong capacity for adaptation by reorganizing its stores and implementing a large number of initiatives to promote click & collect as much as possible during a crucial period of major sales appointments for the Group. The Group’s leading position in France, combined with the quality of its relations with its suppliers and its solid business execution allowed Fnac Darty to outperform in sales during the end of year period, Black Friday and Christmas.

The Group thus demonstrated the complementary of its stores and its digital platforms, and the relevance of its omnichannel model in an unprecedented health crisis. The strong appeal of the Fnac and Darty brands combined with highly agile operations and business execution allowed the Group to record growth of more than 55% in its e-commerce platforms over the year, with more than 5 million new active online customers identified during the period. In addition, there was continued strong momentum in winning new members this year, which was driven in particular by the revamping of the loyalty program marked by the launch of the new Fnac+ card that is designed to support the digitization of the customers’ purchasing behavior and offer them an enhanced cross-banner experience. This card offers a number of promotional offers common to the Fnac and Darty banners: free and unlimited delivery in one business day, a common pool for accumulating loyalty points that can be converted into purchase vouchers for use through both banners, online and in-store. Thus, more than 1.3 new Fnac+ members signed up during the year, bringing the total number of Fnac+ members to nearly 2.2 million at year-end 2020. Fnac Darty boasted a membership base of nearly 10 million members, including 7 million in France at the end of December 2020.

In 2020, e-commerce represented 29% of the Group’s revenues, versus 19% one year earlier. The Group has also seen an acceleration in mobile devices, which account for more than 64% of the traffic on its sites, an increase since the previous year. Marketplaces also posted very strong double-digit growth. Omnichannel, which was impacted by the closure of all or some of the stores and limits on in-store traffic, accounted for 42% of online sales during the year, in a context of very strong growth in the weight of e-commerce. The momentum of click & collect remained very steady, particularly during the 4^th quarter when order processing via click & collect rose +40% higher than the 4^th quarter of 2019.

The Group continued to expand its store network at a slower rate than in the past, with the opening in 2020 of 36 stores, including 27 under franchise. The Group opened 9 directly-owned, 3 Fnac, 4 Darty and 2 Nature & Découvertes stores. Fnac opened 13 stores during the year: 10 in France, 1 in Portugal, 1 in Spain and 1 in Belgium. Darty opened 21 stores in France. At year-end 2020, Fnac Darty had a network of 908 stores, including 344 franchises. The expansion dynamic will continue in 2021, at a slower rate than previously, primarily in the franchise format.

At the same time, in November 2020, Fnac Switzerland and Manor launched a test phase lasting several months for the deployment of four shop-in-shops in Switzerland that will allow the Group, if this test phase is conclusive, to significantly strengthen its presence in Switzerland.

Finalization of the sale of BCC in the Netherlands to Mirage Retail Group

Following the announcement in January 2021 of the search for a partner to pull out of the Netherlands, in November 2020 the Group finalized the disposal of 100% of its Dutch subsidiary BCC, a specialist in electronics and large appliances in the Netherlands, in accordance with the terms communicated on September 28, 2020 and after obtaining the necessary authorizations from the relevant regulatory authorities and work councils. Mirage Retail Group has real experience in retail in the Netherlands and specializes in recovery strategies, combining its knowledge and extensive experience in retail, real estate and logistics to manage promising brands with high profitability potential. Fnac Darty is convinced that the transaction will enable BCC to benefit from the right support to successfully perform on its market.

The Group’s 2020 and 2019 financial statements present the Dutch branch under discontinued operations pursuant to IFRS 5.

Continuation of initiatives to innovate and diversify the Fnac Darty offer

In 2020, despite the difficulties encountered in an unprecedented crisis, Fnac Darty pursued its initiatives in terms of innovation and customer experience by expanding the diversification of its product portfolio.

WeFix

The integration of WeFix continued in 2020, despite the difficult operating conditions imposed by the two successive lockdowns, with the opening of 21 new points of sale, bringing the total number of points of sale to 117 at the end of December. Note that the repair activities and the sale of reconditioned products and accessories increased in a context in which in-store footfall was impacted by the current crisis. In addition, the group deployed the X-Force screen protection solution, named product of the year 2021⁸, in 197 Fnac and Darty stores.

Nature & Découvertes

Nature & Découvertes recorded a decrease in its sales in 2020 due to the drop in in-store sales impacted by the closure of its entire store network during the two lockdowns, and despite the strong growth of more than +100% in its online sales. This strong momentum in online sales was driven by the Children’s Equipment, Well-Being and Nature Activity categories. The three Nature & Découvertes stores in Germany were closed in 2020, in order to reposition the brand in its key markets. The retailer’s first location in Spain has been a success, and the Group intends to continue the expansion of Nature & Découvertes by building on its existing operational capacities.

Services

Services were significantly impacted in 2020 by a high comparison base effect until April, related to the change in the multimedia insurance service provider in April 2019, the closure of integrated and franchise stores during the first lockdown, the limits on in-store traffic and the suspension of ticket sales as a result of the government measures imposed on the entertainment industry. At the same time, the Darty Max service recorded real success with French consumers. Despite the context that hindered the attraction of new customers, particularly during the first lockdown, around 200,000 customers have already signed up for this unlimited repair subscription service, which covers all large household appliances for €9.99 a month. Offered since its launch in all Darty stores in France, consumers have been able to subscribe to this service online and by telephone since September.

Darty Kitchen

The deployment of the Darty Kitchen offer continued in 2020 with the opening of 16 new sales areas, including 8 new stores exclusively dedicated to this offer. At the end of December 2020, the Group had more than 165 Kitchen sales outlets, including 19 stores dedicated exclusively to this service offer.

Other product diversifications

Finally, Fnac Darty continued to diversify its product offer, permitting the redistribution of the sales area in stores to new fast growing product categories, driven particularly by the Games & Toys, Home & Design and Urban Mobility segments. Building on its leading position in France in the scooter segment since 2019, the Group expanded its high-end product line to new categories. Fnac Darty thus signed an exclusive distribution agreement with the Xiaomi brand to sell its folding electric bike, and with Angell Bike to distribute its electric power-assisted bicycles. Fnac Darty also signed a new partnership with Citroën to exclusively market AMI, car manufacturer’s fully electric mobility solution, in 39 Group stores. Finally, and more recently, Fnac Darty completed its innovative offer by entering into a partnership with Red Electric for the distribution of the new Model E scooter, 100% electric and 100% French, in thirty Group stores. In addition, Fnac Darty expanded its service offer by partnering with Cyclofix, the French leader in micromobility maintenance to propose to consumers a complete mobility ecosystem, offering an immediate repair service for electric scooters and bikes in Fnac and Darty retail stores. This partnership is fully aligned with the Group’s commitment to extending the lifespan of its products.

2020 OPERATING PERFORMANCE AND RESULTS

Analysis of fourth-quarter 2020 revenues

In the fourth quarter of 2020, Group sales totaled €2,782 million, up +9.4% on a reported basis and +9.6% on a like-for-like basis⁹ compared to the previous year. This solid performance is primarily the result of the success of the major sales events in December (Black Friday and Christmas) when the Group recorded strong growth in its sales. The solid growth of nearly 70% in online sales with a volume of click & collect orders that rose nearly 40% during the fourth quarter also contributed to the strong growth in sales recorded during the quarter.

In France and Switzerland, revenues were up +11.7% on a like-for-like basis¹. The e-commerce platforms posted solid growth for the two banners.
The region recorded very strong momentum in sales of appliances, driven by both large and small household appliances. Consumer electronics recorded solid growth in the IT categories owing to the surge in working and learning from home, television and telephony. Sound showed resilient sales during the quarter, while Photography was down. Editorial products, which are very sensitive to impulse purchases, recorded good momentum driven by books and gaming, which benefited from the release of the new Playstation and Xbox consoles during the quarter. The audio and video categories, however, remained in decline. At the same time, services were affected by the downturn in merchant services caused by the drop in footfall impacted by the limits imposed on in-store traffic through the health measures, and the suspension of ticketing sales following government measures banning gatherings. The diversification categories recorded strong growth, primarily driven by the home & design, games & toys and urban mobility segments.

In the Iberian Peninsula, revenues fell -3.3% on a like-for-like basis¹ caused by the heavy restrictions imposed particularly in the larger cities where the Fnac brand has a very strong presence, and a less buoyant macroeconomic environment. The e-commerce platforms recorded an increase of nearly +60% in their sales over the quarter. Revenues in Spain were down, but to a lesser extent than in Portugal, which was heavily impacted by the drop in footfall in shopping malls, despite good commercial momentum.

In Belgium and Luxembourg, sales were up +3.8% on a like-for-like basis¹ driven by the strong growth in e-commerce with sales that more than doubled over the quarter. The region was able to post solid growth thanks to strong sales momentum in IT equipment, televisions, large and small household appliances and gaming.

Analysis of revenues and results in 2020 by segment

The France and Switzerland region posted revenues up +1.9% on a like-for-like basis¹. The good momentum in large and small household appliances, and the IT, television and gaming categories offset the drop in telephony, sound and books, as well as the structural decline of the photo, audio and video categories. The Group continued to control its commercial investments and adjusted its operating expenses. Current operating income was down by -€63 million to €194 million due to a gross margin rate impacted by a negative product and services mix and the sharp decline in ticketing sales, as well as a negative effect related to the full-year consolidation of Nature & Découvertes.

Sales for the Iberian Peninsula were down at -11.1% on a like-for-like basis¹⁰. The digital platforms recorded very strong growth in their sales at +65% in 2020. Current operating income for the region was €8 million, down sharply compared to 2019 in both Spain and Portugal, strongly impacted by a macroeconomic environment and purchasing power affected by the health crisis, despite good commercial execution.

The Belgium and Luxembourg region recorded an increase in revenues of +1.4% on a like-for-like basis¹, driven in particular by the very strong growth of nearly 100% in e-commerce sales and the solid momentum in large household appliances. Despite continued competitive pressure, Belgium posted current operating income of €13 million, up +€1million compared to 2019.

ANALYSIS OF FINANCIAL RESULTS

The gross margin rate reached 29.2% in 2020, down -120 basis points compared with 2019, primarily because of an unfavorable product mix effect of -80 basis points due to a drop in footfall in-store, which particularly penalized editorial products that are very sensitive to impulse purchases and a sharp increase in sales of consumer electronics. Ticketing sales were down, and impacted the gross margin rate by -45 basis points for the year. Finally, the consolidation of Nature & Découvertes offset the decline in other merchant services, which were impacted by lower in-store traffic.

Operating costs in 2020 totaled €1,971 million, up from 2019. Despite the €26 million increase in logistics costs generated by more home deliveries performed during the year, particularly during the lockdown periods, operating costs expressed as a percentage of revenues amounted to 26.3% in 2020, down -10 basis points compared to the previous year. This drop includes a negative scope effect of -€63 million related to the consolidation of Nature & Découvertes in August 2019.

EBITDA amounted to €567 million, including €245 million related to the application of IFRS 16, down -€59 million from 2019.

Current operating income amounted to €215 million, versus €293 million the previous year. The consolidation of Nature & Découvertes in 2019 had a negative technical impact of -€16 million on 2020 current operating income over a full year due to the seasonal nature of the brand’s business.

Non-current items totaled -€16 million in 2020, including -€14million in technical effects for the impairment of the Darty brand, related primarily to changes in the discount rate and -€6 million in incremental costs linked directly to the health crisis. Excluding these items, non-current income amounted to €4 million.
Operating income totaled €199 million in 2020.

In 2020, financial expenses amounted to €51 million versus €79 million in 2019. As a reminder, the 2019 financial result was impacted by an expense of €27 million associated with the bond refinancing that took place in May 2019. In 2020, financial expenses were impacted by the cost of the State Guaranteed Loan as well as the related set-up costs for €2.6 million, and by the IFRS 16 impact for €22 million. Excluding these items, financial expenses were significantly lower than their historical normative level¹¹ of around €45 million.

Net income from continuing operations, Group share was down by -€19 million to €96 million in 2020 after taking into account non-current items, financial expenses and a tax charge of €60 million.
The net loss from discontinued operations of -€94 million is mainly composed of the costs of divesting the BCC subsidiary sold at the end of the year, with no significant cash effect, which brings consolidated net income, Group share, to €1 million in 2020.

FINANCIAL STRUCTURE

The Group’s net cash position amounted to €114 million at December 31, 2020 versus -€18 million at December 31, 2019. Free cash flow from operations was high at €192 million, an increase of €19 million over one year. This performance reflects the very good management of the working capital requirement throughout the year, driven by the optimization of inventory as a result of a controlled purchasing policy in the context of the Covid-19 crisis, with an amplified effect in December due to a very good commercial dynamic. Operational excellence and financial discipline enabled a rapid decrease in the Group’s net debt. As a result, the Group has returned to a positive net cash position in an unprecedented crisis context.

At December 31, 2020, the Group’s liquidity position stood at €1,569 million, thanks in particular to the State-Guaranteed Loan of €500 million with a 1-year maturity, and a 5-year extension option. In addition to this amount of available cash, a revolving credit line of €400 million had not been used at 31 December 2020.
Thanks to the Group’s good commercial performance which led to strong cash generation and a solid net cash position at year-end 2020, Fnac Darty announces its intention to repay the full amount of the State-Guaranteed Loan of €500 million by no later than the anniversary date in April 2021.

In addition, the €400 million revolving credit facility, drawn down in full as a preventive measure in mid-March 2020, was not used and was repaid on June 18, 2020.

Moreover, the Group’s lenders agreed to suspend its financial covenants for the months of June and December 2020; the convents were, however, met for both due dates.

The Group remains highly attentive to its cash positions and completed a plan to adjust its investment spending in 2020 while preserving its priority projects focused on e-commerce, digitization and services. Investments were sharply reduced in 2020, compared with 2019, and totaled €99 million, in accordance with the indication that had been given by the Group.

Fnac Darty is rated by the ratings agencies S&P Global, Scope Ratings and Moody’s. Following the increased uncertainty caused by the Covid-19 crisis, Moody’s confirmed the Group’s Ba2 rating in April 2020, while placing the rating outlook “under review” for downgrade. On April 7, 2020, S&P Global downgraded Fnac Darty’s rating from BB+ to BB and lowered the rating outlook to “negative”. However, the agency confirmed the Group’s BB rating in September, while lowering the outlook of this rating from “stable” to “negative”. Finally, Scope Rating confirmed the BBB- rating assigned to Fnac Darty in June 2020, while lowering the outlook from “stable” to “under review” for downgrade.

Finally, in view of the health crisis that marked 2020 and in accordance with the conditions imposed for the implementation of a State Guaranteed Loan, the Board of Directors withdrew the proposed dividend of €1.50 per share for 2019 on April 19, 2020 and did not conduct share buyback programs in 2020 pursuant to the restrictions imposed.
Given the strength of its business model, Fnac Darty will propose to the Annual General Meeting on May 27, 2021 the reactivation of its shareholder return policy and the distribution of an ordinary dividend of €1.00 per share¹², representing a payout rate of around 30%¹³. This dividend will be payable entirely in cash. The ex-dividend date will be on the 5^th of July 2021 and the dividend payment date on the 7^th of July 2021.

CONCLUSION AND OUTLOOK

The Group confirms the outlook that was given in the press release on its 2020 estimated performance published on January 19, 2021.

In an uncertain environment, with the Group anticipating a first half of 2021 still disrupted by the health crisis and a second half characterized by more normalized operating conditions, the Group remains confident but cautious on the performance of its markets in 2021.

On the date of this press release, the health crisis is still present in all countries in which the Group operates. As a result, restrictions remain in France with shopping malls larger than 20,000 m² closed, and more restrictively, particularly in Switzerland, where all stores have been closed since mid-January. However, the Group notes a cumulative sales trend in mid-February 2021 equivalent to that of the fourth quarter of 2020, driven by the lag in sales in the open stores and on the Group’s e-commerce platforms.

The Group also notes that it does not anticipate a return to normal in Ticketing activities until the second half of 2021 at best. Lastly, the recovery of economic activity in the Iberian Peninsula is expected to be slower than the other countries in which the Group operates.

Therefore, despite an encouraging start to the year in a health context which is still uncertain, the Group remains prudent and confirms a slight growth in revenues and current operating income for 2021 compared to 2020.

NEW STRATEGIC PLAN

Fnac Darty is today launching its new strategic plan, Everyday, whose challenges and prospects are detailed in an ad hoc press release published today and available on the website www.fnacdarty.com.

PRESENTATION OF THE 2020 ANNUAL RESULTS AND THE GROUP’S NEW STRATEGIC PLAN

On February 23, 2021, a live webcast of the presentation of the 2020 annual results and the new strategic plan will be available at 6:30 pm (Paris time)
here

The presentation slides are available on the Group’s website in the Presentation section under Investors: www.fnacdarty.com

A replay will also be available on the Group’s website.

CONTACTS

ANALYSTS/ INVESTORS	Stéphanie Laval	stephanie.laval@fnacdarty.com +33 (0)1 55 21 52 53
	Marina Louvard	marina.louvard@fnacdarty.com +33 (0)1 72 28 17 08
PRESS
	Audrey Bouchard	audrey.bouchard@fnacdarty.com +33 (0)6 17 25 03 77

Léo Le Bourhis leo.le.bourhis@fnacdarty.com
+33 (0)6 75 06 43 81

APPENDICES

The Board of Directors of Fnac Darty SA met on February 23, 2021 under the chairmanship of Jacques Veyrat to approve the consolidated financial statements for the year 2020. The procedures for auditing the consolidated financial statements were performed and the certification report will be issued after the verification of the management report and the due diligence relating to the ESEF electronic format of the 2020 accounts are finalized.

The Group's consolidated financial statements 2020 unaudited are available on the corporate website www.fnacdarty.com.

The following tables contain individually rounded data. The arithmetical calculations based on rounded data may present some differences with the aggregates or subtotals reported.

SUMMARY INCOME STATEMENT

(in €m)				2019	2020		Change
Revenues				7,349	7,491		+1.9%
Gross margin				2,235	2,186		-2.2%
As a % of revenues				30.4%	29.2%		-1.2 pt
Total costs				1,942	1,971		+1.5%
As a % of revenues				26.4%	26.3%		-0.1 pt
Current operating income				293	215		-78
Other non-current operating income and expenses				-29	-16
Operating income				265	199		-65
Net financial expense				-79	-51
Income tax				-72	-60
Net income from continuing operations for the period				114	88		-26
Net income from continuing operations for the period, Group share				115	96		-19
Net income from discontinued operations				-10	-94
Consolidated net income, Group share				105	1		-104
EBITDA14				626	567		-59
As a % of revenues				8.5%	7.6%
EBITDA excluding IFRS 16				395	322		-73

CURRENT OPERATING INCOME BY OPERATING SEGMENT

(in €m)		2019	As a % of revenues			2020			As a % of revenues		Change
France and Switzerland		256.7	4.3%			193.8			3.1%		-62.9
Iberian Peninsula		25.0	3.5%			8.4			1.3%		-16.6
Belgium and Luxembourg		11.6	1.9%			13.1			2.2%		+1.5
Group		293.3	4.0%			215.3			2.9%		-78.0

GENERATION OF FREE CASH FLOW FROM OPERATIONS

	In €M
	2019	2020
Cash flow from operations before tax, dividends and interest	570	545
IFRS 16 impact	-231	-245
Cash flow from operations before tax, dividends and interest, excluding IFRS 16	339	300
Change in working capital requirement, excluding IFRS 16	49	65
Income tax paid	-70	-66
Net cash flows from operating activities, excluding IFRS 16	318	299
Operating investments	-152	-99
Change in payables and receivables relating to non-current assets	5	-9
Operating divestments	2	1
Net cash flows from operating investment activities	-145	-107
Free cash flow from operations, excluding IFRS 16	173	192

BALANCE SHEET

Assets (€ millions)	At December 31, 2019*	At December 31, 2020
Goodwill	1,654	1,654
Intangible assets	511	506
Property, plant and equipment	615	594
Rights of use relating to lease agreements	1,190	1,109
Investments in associates	21	0
Non-current financial assets	28	33
Deferred tax assets	83	67
Other non-current assets	0	0
Non-current assets	4,102	3,964
Inventory	1,079	960
Trade receivables	275	285
Tax receivables due	3	4
Other current financial assets	12	7
Other current assets	369	361
Cash and cash equivalents	996	1,569
Current assets	2,733	3,186
Assets held for sale	201	0
Total assets	7,036	7,149
Liabilities (€ millions)	At December 31, 2019*	At December 31, 2020
Share capital	27	27
Equity-related reserves	971	971
Translation reserves	(6)	(5)
Other reserves	396	375
Shareholders’ equity, Group share	1,388	1,369
Shareholders’ equity – Share attributable to non-controlling interests	10	5
Shareholders’ equity	1,398	1,373
Long-term borrowings and financial debt	936	902
Leasing debts with a maturity of over one year	967	884
Provisions for pensions and other equivalent benefits	177	206
Other non-current liabilities	190	124
Deferred tax liabilities	203	165
Non-current liabilities	2,473	2,281
Short-term borrowings and financial debt	77	553
Leasing debts with a maturity of less than one year	212	230
Other current financial liabilities	18	13
Trade payables	1,889	1,784
Provisions	39	31
Tax liabilities payable	9	30
Other current liabilities	785	854
Current liabilities	3,030	3,495
Liabilities relating to assets held for sale	135	0
Total liabilities	7,036	7,149

*restated for the IFRIC decision on IFRS 16 of December 16, 2019

2020 REVENUES

	2020 In €m	Change vs 2019
		Reported	At comparable scope of consolidation and at constant exchange rates	like-for-like basis
France and Switzerland	6,228	+3.3%	+2.2%	+1.9%
Iberian Peninsula	654	-9.5%	-9.5%	-11.1%
Belgium and Luxembourg	609	+2.2%	+2.2%	+1.4%
Group	7,491	+1.9%	+1.0%	+0.6%

FOURTH QUARTER 2020 REVENUES

	Q4 2020 In €m	Change vs Q4 2019
		Actual	At comparable scope of consolidation and at constant exchange rates	like-for-like basis
France and Switzerland	2,348	+11.3%	+12.1%	+11.7%
Iberian Peninsula	252	-2.4%	-2.4%	-3.3%
Belgium and Luxembourg	183	+4.2%	+4.2%	+3.8%
Group	2,782	+9.4%	+10.0%	+9.6%

STORE NETWORK

	31-Dec-2019	Opening	Closing	31-Dec-2020
France and Switzerland*	726	33	8	751
Traditional Fnac	95	0	0	95
Suburban Fnac	17	0	0	17
Travel Fnac	29	2	2	29
Proximity Fnac	59	8	0	67
Fnac Connect	14	0	0	14
Darty	412	21	1	432
Fnac/Darty France	1	0	0	1
Nature & Découvertes**	99	2	5	96
Of which franchised stores	315	27	3	339
Iberian Peninsula	70	2	0	72
Traditional Fnac	49	1	0	50
Travel Fnac	2	0	0	2
Proximity Fnac	15	1	0	16
Fnac Connect	4	0	0	4
Of which franchised stores	5	0	0	5
Belgium and Luxembourg	84	1	0	85
Traditional Fnac***	11	1	0	12
Proximity Fnac	1	0	0	1
Darty	72	0	0	72
Fnac Darty Group	880	36	8	908
Traditional Fnac	155	2	0	157
Suburban Fnac	17	0	0	17
Travel Fnac	31	2	2	31
Proximity Fnac	75	9	0	84
Fnac Connect	18	0	0	18
Darty	484	21	1	504
Fnac/Darty	1	0	0	1
Nature & Découvertes	99	2	5	96
Of which franchised stores	320	27	3	344

*Including 11 Fnac stores abroad: two in Tunisia, three in Morocco, one in Congo, one in Cameroon, two in Ivory Coast, two in Qatar and two Darty stores in Tunisia; 17 stores in the French overseas territories
** Nature & Découvertes and its subsidiaries are managed from France. Including four stores in Belgium, one store in Luxembourg and seven franchises in Switzerland.

***Including one store in Luxembourg, which is managed from Belgium

DEFINITIONS OF ALTERNATIVE PERFORMANCE INDICATORS

CHANGE IN REVENUES AT CONSTANT EXCHANGE RATES AND COMPARABLE SCOPE OF CONSOLIDATION
The change in revenues at constant exchange rates and comparable scope of consolidation means that the impact of exchange rate fluctuations has been excluded and that the effect of changes in scope is corrected to not take modifications (acquisition, sale of subsidiary) into account. The exchange rate impact is eliminated by recalculating sales for year N-1, on the basis of the exchange rates used for year N. The revenues of subsidiaries acquired or sold since January 1 of year N-1 are excluded from the calculation of the change. This indicator can be used to measure the change in revenues excluding the effect of changes in foreign exchange rates and scopes of consolidation.

CHANGE IN REVENUES (LIKE-FOR-LIKE)
The change in revenues on a like-for-like basis means that the impact of exchange rate fluctuations has been excluded, that the effect of changes in scope has been corrected (acquisition, disposal of subsidiary) and that the effect of directly-owned store openings and closures since January 1 of year N-1 has been excluded. This indicator can be used to measure the change in revenues excluding the effect of changes in foreign exchange rates, scopes of consolidation and directly-owned store openings and closings.

EBITDA
EBITDA = Earnings (current operating income) before interest, tax, depreciation, amortization and provisions on fixed operational assets.

EBITDA	+ Rents within the scope of IFRS 16 =	EBITDA excluding IFRS 16
Current operating income before depreciation, amortization and provisions on fixed operational assets		EBITDA including rental expenses within the scope of IFRS 16
Free cash flow from operations	+ Payment of rents within the scope of IFRS 16 =	Free cash flow from operations, excluding IFRS 16
Net cash flow from operating activities, less net operating investments		Free cash flow from operations, including cash impacts relating to rents within the scope of IFRS 16
Net cash	- Lease liabilities =	Net cash excluding IFRS 16
Gross cash and cash equivalents less gross financial debt		Net cash excluding leasing debt
Net financial debt	- Lease liabilities =	Net debt excluding IFRS 16
Gross financial debt less gross cash and cash equivalents		Net financial debt less lease liabilities
Net financial income	- Financial interest on lease liabilities =	Net financial income excluding IFRS 16

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¹ Like-for-like data: excludes the effect of changes in foreign exchange rates and scope of consolidation, and directly owned-store openings and closures. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

² Submitted to a vote at the General Meeting on May 27, 2021.

³ Like-for-like data: excludes the effect of changes in foreign exchange rates and scope of consolidation, and directly owned-store openings and closures. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

⁴ Operations in the Netherlands are recognized as discontinued operations, following the application of IFRS 5.

⁵ Excluding IFRS16. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

⁶ Nature & Découvertes has been consolidated since August 1, 2019.

⁷ Excluding IFRS16. Indicator defined in the 2019 Universal Registration Document filed with the AMF on April 20, 2020.

⁸ Study and test conducted on XFORCE Antibacterial by Nielsen/treetz with a total of more than 15,000 consumers in France, end of 2020 - poyfrance.com.

⁹ Like-for-like data: excludes the effect of changes in foreign exchange rates and scope of consolidation, and store openings and closures

¹⁰ Like-for-like data: excludes the effect of changes in foreign exchange rates and scope of consolidation, and store openings and closures

¹¹ 2017 financial expenses of €44 million and 2018 financial expenses of €43 million.

¹² Corresponding to an amount of around €27 million on the basis of the number of Fnac Darty shares at December 31, 2020

¹³ Calculated on the net income from continuing operations, Group share

¹⁴ EBITDA = Earnings (current operating income) before interest, tax, depreciation, amortization and provisions on fixed operational assets.

Attachment

• CP - Fnac Darty - Résultats annuels 2020_VDEF_ENG