GICS Sector : Consumer Cyclical
Ceconomy AG engages in the consumer electronics retail business.The company operates approximately 850 stores in 14 countries under the MediaMarkt brand; and approximately 170 stores in 3 countries under the Saturn brand.It also operates Flip4New for selling used electronic articles online.
CECONOMY reported a robust financial performance for FY 2024/25, with sales reaching €23.1 billion, a 5.7% growth, exceeding initial guidance. The company's EBIT grew by 24% to €378 million, marking 11 consecutive quarters of growth. Earnings per share (EPS) came in at €0.01069, significantly below analyst estimates of €0.15. The company's free cash flow increased by 180% to €337 million, demonstrating the efficiency of its business model. The gross margin improved, driven by the positive impact of growth areas, with online sales increasing by 13.3% to €5.7 billion.
Publication Date: Dec -23
The company's strategic transformation into an omnichannel service platform is gaining momentum, with growth businesses now representing 36% of gross profit, up from 33% last year. CECONOMY has made significant progress in its Retail Core business, with 53 million loyalty members, improved inventory management, and strong online sales growth. As Remko Rijnders noted, "MediaMarkt is just at the beginning of this growth area and expects significant growth" in Retail Media, a key growth area for the company.
CECONOMY's valuation metrics indicate a mixed picture. The company's P/E Ratio stands at -62.45, while the P/S Ratio is 0.09, suggesting a relatively low revenue multiple. The EV/EBITDA ratio is 4.1, indicating a reasonable valuation. For FY 2025/26, CECONOMY expects a moderate increase in currency and portfolio-adjusted total sales, with an adjusted EBIT of around €500 million. Analysts estimate revenue growth of 3.0% for next year. With its improved free cash flow, the company has flexibility for capital allocation, and a dividend policy of distributing 15-25% of net profit or EPS per year.
The partnership with JD.com is expected to accelerate growth and create a unique shopping experience. CECONOMY expects to leverage JD's expertise in logistics, particularly in delivery towards customers and technology. The company remains confident and expects to close the deal in the first half of 2026, subject to merger control approvals. With a target of €500 million in adjusted EBIT for 2026, CECONOMY is well-positioned for continued growth and expansion.
CECONOMY's brand strategy is focused on maintaining the value of its MediaMarkt and Saturn brands, with brand equity increasing by €500 million year-over-year to €2.5 billion. The company has also made progress in sustainability efforts, with BetterWay sales accounting for 25% of total sales, and refurbished products growing by 191%. As the company continues to invest in growth areas, it is well-positioned for long-term success.
JD.com Explores Dim Sum Bonds And Ceconomy Deal In Global Push
Feb -06
Italy ties JD.com’s Ceconomy deal to strict data safeguards
Dec -10
Italy sets tough terms on personal data protection to clear Chinese JD.com's takeover of Ceconomy
Dec -09
Italy sets tough terms on personal data protection to clear Chinese JD.com's takeover of Ceconomy
Dec -09
Should JD.com’s (JD) Ceconomy Bid and Margin Strain Require Action From Investors?
Dec -04
Italy grants conditional clearance to JD.com’s acquisition of Ceconomy
Nov -28
Is Ceconomy Still a Bargain After Surging 65% Ahead of 2025?
Sep -28
Ceconomy (XTRA:CEC): Taking a Fresh Look at Valuation Following a Period of Steady Gains
Sep -27
Ceconomy AG's 1.2% growth is driven by increasing demand for consumer electronics, strategic partnerships, and expansion into emerging markets. Additionally, the company's focus on omnichannel retailing, investments in digital transformation, and cost-saving initiatives have contributed to its growth momentum.
Ceconomy AG's Services & Solutions segment growth of 0.8 is driven by increasing demand for digital services, expansion of online marketplaces, and strategic partnerships. Additionally, the company's focus on omnichannel retailing, investments in data analytics, and cost optimization initiatives contribute to its growth.
Ceconomy AG offers a wide range of consumer electronics products including TVs, laptops, smartphones, and gaming consoles from top brands.
Ceconomy AG provides a variety of home appliances such as refrigerators, washing machines, and air conditioners from leading manufacturers.
Ceconomy AG offers IT and telecom solutions including software, hardware, and services for businesses and individuals.
Ceconomy AG provides a range of services including installation, maintenance, and repair services for consumer electronics and home appliances.
Ceconomy AG operates an e-commerce platform that allows customers to purchase products online and have them delivered or picked up in-store.
Ceconomy AG operates in the retail industry, where substitutes are readily available. However, the company's strong brand presence and customer loyalty mitigate the threat of substitutes.
Ceconomy AG's customers have a high bargaining power due to the availability of substitutes and the company's dependence on a few large customers.
Ceconomy AG has a diversified supplier base, which reduces the bargaining power of suppliers. The company's large scale of operations also gives it negotiating power over suppliers.
The retail industry has high barriers to entry, including significant capital requirements and established brand presence. This reduces the threat of new entrants for Ceconomy AG.
The retail industry is highly competitive, with many established players competing for market share. Ceconomy AG faces intense rivalry from competitors such as Amazon and other online retailers.
| Value | |
|---|---|
| Debt Weight | 84.80% |
| Debt Cost | 6.81% |
| Equity Weight | 15.20% |
| Equity Cost | 14.92% |
| WACC | 8.04% |
| Leverage | 558.10% |
Value: 9.6
Growth: 4.0
Quality: 4.7
Yield: 5.6
Momentum: 1.0
Volatility: 5.0
1-Year Total Return ->
Value: 6.2
Growth: 2.4
Quality: 2.5
Yield: 0.6
Momentum: 8.0
Volatility: 3.0
1-Year Total Return ->
Value: 7.6
Growth: 2.4
Quality: 3.0
Yield: 0.0
Momentum: 8.0
Volatility: 1.7
1-Year Total Return ->
Value: 1.5
Growth: 6.4
Quality: 6.3
Yield: 0.6
Momentum: 1.0
Volatility: 5.0
1-Year Total Return ->
Value: 5.7
Growth: 5.8
Quality: 2.7
Yield: 4.4
Momentum: 0.5
Volatility: 1.7
1-Year Total Return ->