(AOF) – Fnac Darty announces that the rating agency Standard & Poor’s (S&P) has raised the group’s long-term credit rating to BB+ with a stable outlook. This improvement indicates full recognition of the group’s financial solidity and the robustness of its economic model in a context marked by 2 years of health crisis. Fnac Darty has BBB-, BB+ and Ba2 ratings, assigned respectively by Scope Ratings, Standard & Poor’s, and Moody’s, all three with a stable outlook.
AOF – LEARN MORE
Key points
– First French distributor, born in 2016, of technical products and household appliances under the Fnac and Darty brands and second web distributor;
– Activity of €7.5 billion split between technical products for 49%, editorial products for 17% and household appliances for 21%, other products & services for 13%;
– Strong presence in France & Switzerland (83% of sales from 908 stores), the Iberian Peninsula (9%) and Belgium & Luxembourg;
– Business model considering distribution as a platform of services, both for brands and for consumers and aiming to increase leadership outside France, with the medium-term objective of an operating margin of 4.5 to 5%;
– Open capital, with the German C-economy as the leading shareholder with 24% of the shares, Enrique Martinez being managing director and Jacques Veyrat chairing the 13-member board.
Challenges
– New Everyday strategic plan on 3 pillars by 2025: digitization, via 50% of the group’s investments, in omnichannel distribution by placing salespeople at the center of advice and targeting 30% of sales on the web / support for customers towards products more sustainable via the durability / reliability score, availability of spare parts, repair (2.5 million repaired products) / deployment of Darty Max, repair service by subscription / cumulative free cash flow of €500 million over 2021-23 and €240 million annually from 2025;
– Innovation strategy focused on building digital and logistics capabilities: omni-channel footprint / Digital Factory for the agility and speed of e-commerce sites;
– Environmental strategy: circular economy with the extension of the life cycle of products (DartyMax repair subscription, “Darty sustainable choice” label, repairability index for smartphones, deployment of WeFix repair services) and partnership with La Bourse aux livres resale of second-hand books / halving of CO2 emissions in 2030 compared to 2019;
– Speed of progress from the Everyday plan to 1
er
half of 2021 – complementarity between the store and online sales networks, opening of 18 stores;
– Diversification in mobility through partnerships -Citroën, Xiaomi, Angell Bike, Cyclofix….
Challenges
– Strong competitive risk from Amazon;
– Questioning of the intentions of the German shareholders, Metro and C-economy;
– Intensification of the territorial network -14 stores open on 3
th
quarter 2021;
– At the end of September 2021, despite the curfew or confinement obligations (until May 19, 2021 in France), 13% increase in turnover, of which ¼ achieved online;
– 2021 objective, raised: 5% increase in revenues and operating profit between €260 and €270 million;
– Return to shareholders: 2020 dividend of €1, commitment of €1.5 for 2021 and analysis, each year, of an exceptional dividend or share buybacks.