Fnac Darty (FNAC) H1 2024 earnings summary

Executive summary

• H1 2024 results showed resilience and effective strategy execution, with all geographies returning to growth in Q2 and performance meeting expectations.

• Technical products, especially those with AI features, and services drove strong momentum, while cost control and improved ESG ratings supported profitability.

• The strategic acquisition of Unieuro in Italy is set to boost turnover above €10 billion, expand the store network to over 1,500, and reinforce the group’s position as a European leader in specialized retail.

• Execution of the strategic plan continued, with the group ranking #2 in specialized retail and confirming its 2024 annual outlook.

Financial highlights

• H1 2024 revenue reached €3,390 million, up 1.4% year-over-year on a reported basis and stable like-for-like; online sales remained robust at 21% of total sales.

• Gross margin rate held steady at 31.0%, up 10 bps excluding franchise and integration effects.

• Current operating income was stable at -€36 million; net income from continuing operations improved to -€75 million from -€116 million or -€163 million in H1 2023.

• Free cash flow from operations (ex-IFRS 16) was -€673 million, stable when adjusted for the MediaMarkt integration and reflecting seasonality.

• Net financial debt (ex-IFRS 16) at €496 million as of June 30, 2024; net debt/EBITDA (ex-IFRS 16) at 1.8x, within the 2x target.

Outlook and guidance

• 2024 guidance confirmed, with expected growth at least equal to 2023 and current operating results projected to match or exceed €171 million.

• Cumulative operating cash flow for 2021–2024 targeted at around €500 million, with €180 million expected in 2024.

• Anticipates at least €20 million in annual pre-tax synergies from the Unieuro acquisition starting in 2025 and double-digit EPS accretion.

• Volumes recovery expected in H2 2024, supported by large commercial events and innovation ramp-up.