Fnac-Darty, among the biggest SBF 120 drops at the close of Wednesday, June 1, 2022 – 01/06/2022 at 17:51

(AOF) –

fnac darty

(-4.65% to 45.10 euros)

The title was penalized by an unfavorable analyst rating. So Bryan Garnier stopped buying the stock and lowered its target price to 45 euros, according to a market source.

AOF – LEARN MORE

key points

– First French distributor, born in 2016, of technical products and home appliances from the Fnac and Darty brands and second web distributor;

– EUR 8 billion in activity, split between technical products (49%), editorial products (16%), household appliances (22%) and other products and services;

– Strong presence in France and Switzerland (83% of sales), Iberian Peninsula (9%) and Belgium and Luxembourg and first steps in Africa in Senegal;

– Responsible digital distributor business model;

– Publicly traded with German Ceconomy as the 1st shareholder, followed by the insurance company Indexia, with Enrique Martinez as managing director and Jacques Veyrat presiding over the 14-member board;

– Financial position under control with €1.2 billion in cash and €1.6 billion in equity, compared to €1.1 billion in net debt

Challenges

– New Everyday strategic plan based on 3 pillars until 2025: digitization, via 50% of investments, in omnichannel distribution putting sellers at the center of advice and targeting 30% of web sales / customer support for more sustainable products through sustainability score (reliability, spare parts availability, repair) / DartyMax deployment, subscription repair service (2 million subscriber target) / €500 million cumulative free self-financing in 2021-23 and €240 million annually a from 2025;

– Data-driven innovation and open innovation strategy: improvement of knowledge and data quality and partnership with Google in the use of data, network of partner venture capital funds and Digital Factory;

– Environmental strategy: halving CO2 emissions in 2030 vs 2019 / circular economy by extending the life cycle of products (DartyMax repair subscription, “Darty Sustainable Choice” label, implementation of WeFix repair services in partnership with Apple) and second-hand resale – manuals in partnership with La Bourse aux livre / partnership with Valeco to increase green energy share and with the Raise Seed for Good seed fund integrating ESG criteria in its support;

– Customer loyalty with 10 million members, including 7 million in France;

– Expanded diversification after kitchen furniture at Darty and mobility, establishment of domestic spaces, games and toys in stores;

– Increase to 26% in sales in France from online purchases, combined with the opening of 55 stores, bringing the total to 957.

Challenges

– Strong competitive risk from Amazon;

– Ability to maintain supply despite difficulties in supply chains;

– Spin-offs of partnerships with Google Cloud and, in Switzerland, with the Manor network;

– Expectations for 2022 confirmed after profitability increase in the 1st quarter: caution in market trends but acceleration of the Everyday plan with capitalization in the omnichannel sector, cost control and subscription continuity;

– Dividend of €2 for 2021.

Downtown stores: a worrying drop in traffic

Between 2013 and 2021, traffic in downtown stores dropped by nearly 40%. This drop reached 29.4% in shopping centers in the same period. Procos emphasizes that this movement results mainly from the multiplication of the offer and the development of e-commerce. Small town centers and mega-malls are the most resilient. The former respond to local needs and the latter exert a force of attraction on a regional scale. With Assis du commerce in December 2021, the government launched three weeks of reflection to outline a vision for 2030 and support the investments needed for digital and environmental transitions.

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