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NAC Dartier’s Q1 2025 earnings call highlighted a period of growth and strategic moves amid challenging market conditions. With a market capitalization of $968 million and last twelve months revenue growth of 4.8%, the company demonstrated resilience. The company reported a slight increase in revenue, driven by strong online sales and a diversified market approach. Despite these gains, the stock price experienced a slight decline of 1.06%, reflecting mixed investor sentiment. According to InvestingPro’s analysis, the company maintains a FAIR financial health score of 2.36, with particularly strong momentum metrics.
Key Takeaways
- Revenue increased by 0.6% like-for-like, with a notable 29% rise in reported revenue.
- Online sales accounted for 21% of total revenue, with Click and Collect representing 49% of sales.
- The company acquired UniEuro and sold a portion of France Bier, aiming for €20 million in synergies by 2026.
- The French market saw a 2% decline, but NAC Dartier outperformed.
- Anticipated product launches and operational changes are expected to drive future growth.
Company Performance
NAC Dartier demonstrated resilience in Q1 2025, with revenue growing slightly despite broader market pressures. The company’s strategic acquisitions and focus on online sales contributed to its ability to outperform the declining French market. However, challenges in technical and editorial products, particularly in the gaming sector, impacted overall performance.
Financial Highlights
- Revenue: Increased by 0.6% like-for-like; reported revenue up 29%.
- Gross margin: Improved by 60 basis points.
- Geographic revenue split: 60% from France, 40% from the rest of Europe.
Outlook & Guidance
NAC Dartier maintains a positive outlook with expectations of mid-single-digit growth in operating income for 2025. The company is preparing for major product launches, including the anticipated Switch two in June, which could bolster sales. Additionally, planned synergies from recent acquisitions and strategic sales are expected to enhance profitability by the end of 2026.
Executive Commentary
Jean Brier Loutinier, CFO, emphasized the company’s cautious approach to stock accumulation, stating, "Our business is not to buy, it’s to sell." He also reaffirmed the company’s targets disclosed in February, underscoring a steady strategic direction.
Risks and Challenges
- Market saturation in technical products could limit growth.
- Competitive pressures, particularly in Belgium, present ongoing challenges.
- Macroeconomic factors, such as consumer spending trends in Europe, may impact future performance.
- Potential supply chain disruptions could affect product availability and sales.
NAC Dartier’s Q1 2025 performance reflects a strategic balance of growth initiatives and market adaptability, with a beta of 1.38 indicating moderate market sensitivity. The company’s P/E ratio of 25.14 and strong free cash flow yield of 45% suggest solid financial fundamentals. For comprehensive analysis including Fair Value estimates and growth projections, check out the detailed Pro Research Report available on InvestingPro, part of our coverage of 1,400+ top stocks.
Full transcript - Fnac Darty SA (FNAC) Q1 2025:
Conference Moderator, NAC Dartier: Good evening. Welcome to the conference call to present, first quarter revenues for the 2025 of NAC Dartier. Mr. Jean Brier Loutinier, who is the CFO, will be moderating the call. Sir, over to you.
Jean Brier Loutinier, CFO, NAC Dartier: Thank you. Good evening to you all. Thanks for joining us on this call for presenting the business for Q1 twenty twenty five. I’m joined this evening by Investor Relations, Demetil Vielle and Laurent Parisot. I’ll present our results and we’ll take our questions.
Slide three, I’ll give you some information regarding our reporting. Acquisition of UniEuro gives new European dimension to our group. We wanted to adapt our financial information accordingly. As of today, we’re releasing according to the two following geography: France, Sixty Percent of group sales and rest of Europe that represents 40%. That includes Italy, Belgium, Portugal, Spain and Switzerland.
The detail of restatements sorry, to be found at annex of the press release already available on our website. And lastly, and as stated to the contrary, in order to better reflect the business performance of our activities, we’re going to comment like for like on a pro form a basis as if UniEuro had been consolidated in our accounts since the 01/01/2024. And there’s some major scope effects linked to store closures, either definitively Champs Elysees in France or temporary for two stores in Spain for renovation and works. Lastly, I’d like to redetail with you the impacts on our P and L of the integration of UniEuro and the deconsolidation of ticketing. Starting with UniEuro, one hundred percent of the Uni euro P and L will be consolidated in the Fnac d’Arti P and L.
The minority interest you’ll see in the group P and L as of June 30 will essentially represent 49% of net income, uni euro coming to our co investor, Ruby equity investments, impact on 2024 EPS were not significant. All the impacts on the 2024 results are detailed in the pro form a information released in February 25 and in the release. For ticketing, we sold 17% of France Bier to CTS in 2024. And if we keep 35% stake of the company, we don’t have control. We can only consolidate through global integrations, but at equity method.
We’ll book our share of net income of ticketing in current operating income and group share for the same amount. You’ll understand. So the net impact on COI visible about some €10,000,000 but the impact on net income group shares follow because we’ll still consolidate 35% of the net income of ticketing as against 52% previously. That’s for the scope effect and methodology. Moving to Slide four now, these are the key items of Q1 that I’ll detail throughout the presentation.
So revenue slightly up like for like pro form a, excluding unfavorable calendar effect of minus 1%. Integration at UniEuros is well underway. Initiatives will allow us to deliver synergies of at least EUR 20,000,000 by the end of twenty six. We’ll release more broadly on this topic during our Analyst Day in June. Our pro form a gross margin sharply up over the period with an improvement of 60 basis points and of course, we’ll also return to the success of our bond issue maturity 02/1932, allowing us to buy 77% of Ocean twenty twenty seven in circulation and extend debt debt maturity.
Slide five, as I announced in the introduction, Snagdarty recorded an almost stable revenue, minus 0.6% like for like pro form a, plus 29% reported. They restated for an unfavorable calendar effect of 1%. Revenue slightly up over the period. There were twenty nine days in February against twenty eight this year, showing the importance of the calendar effect. Furthermore, the bulk of the decline in the non comparable figures due to the deconsolidation of ticketing and store closures in France, Champs Elysees in Spain, provisional closures for work at Callao and Valens Brunner online sales account for 21% of revenue over the period.
Click and Collect key indicator represent of 49% of sales is called integration of UniEuro and its web and click and collect business. Less efficient than the rest of the group is reducing this rate that would have been higher than 52%. But the scope for improvement going forward by category now. Services and Diversification category continuing a positive momentum with double digit growth, positive signals observed at the end of twenty twenty four on appliance sales continuing, small appliances delivering good performance and big electro driven essentially by Italy. Technical products booking after a drop by low volumes in telephony editorial products down, still impacted by gaming, doesn’t benefit from the major expected launches as of the end of first half with the launch of Switch two in June.
Europe, let’s turn to the breakdown by geography. France is down 2.6% data, 1.2% like for like versus Q1 twenty twenty four scope effect, the final closure, definitive closure, Champs Elysees. With UniRoad, the France represents in Q1 ’50 percent of total group revenues against 76% same period last year. The group continued to outperform the group in Q1 after the latest figures at the March by the Bank of France. Our markets are down 2% in this first quarter.
We’re satisfied with our outperformance like for like demonstrating the strength of our model. Rest of sales in Europe, rather, represent 41% of total revenue as a group, up plus 0.4% like for like pro form a, taking into account revenue from Italy in 2024 as indicated. Italy is up 1.4% like for like pro form a reflects the good consumer momentum of Italian households. Belgium, down 3.6% like for like, impacted by strong competitive pressure. Portugal, up 0.9% like for like, driven by dynamism and sales, up 1.7%, driven by in store sales.
The SCOR perimeter, in fact, reflecting the closure of Stores Caio and Valencia, these temporary closures. Switzerland, pretty stable, minus 0.5% like for like, driven by strong online sales, scope effect of the large manor in German speaking Switzerland. Let’s look at gross margin over the quarter. Facially, it’s down 110 basis points, impacted by the integration of Uni euro margin lower than that of the group pro form a. That is with a comparable scope, including Uni euro in 2024.
The rate’s up 60 basis points. Good performance due to the increase in service activity, DartyMax offsetting largely the dilutive effect of the franchise and the negative impact of deconsolidation of ticketing. Slide eight, debt maturity successfully had a bond issue for €300,000,000 maturing April 2032, an annual interest rate of 4.75%. We’re going to take advantage good market environment, and this was welcomed by a diversified base of institutional investors. France, Germany, UK was oversubscribed.
The gross proceeds used to buy the 27 convertible bonds over 77% of OCNs were brought during the redemption for EUR 47,000,000. In parallel, our banks agreed to extend the maturity of our RCF and DTTL for an amount of EUR 600,000,000, March 20 30, with two possibilities to extend them, March 3132 to cover the maturity in size and maturity for 02/1932. It’s rated by S and P Fitch. Scope in March 25, S and P stands up the outlook for Tuna Darti to stabilize against negative. Previously confirmed the BB plus rating in the group.
It’s revision based on the strength of operational performance, strengthened competitive position of the group, thanks to the acquisition UniEuro and prudent and controlled financial policy. FICC ratings, scope ratings both confirm their respective ratings, BB plus and BBB associated with stable income. We have extended maturity. We’ve secured our long term liquidity. To conclude Slide nine, we are, as you’ve understood, satisfied with our performance in Q1.
We reaffirmed the targets disclosed in February last, anticipating of current operating income 2025, growing mid single digit compared to 2024, excluding ticketing. And we look forward to meet you for our Investor Day. They’ll be held on invitation, June 11, Viva Tech devoted to new technology. Thanks for your attention. We’re now ready to take your questions.
Conference Moderator, NAC Dartier: First question from Clement Jean Laurent from Brian Gardner. Over to you. Good evening, Jean Louis. Two questions, if I may. First of all, on revenues in the Bank of France figures, we see a decrease in February and March.
Was this also the case for FNAK France? And is this continuing into April? My second question is on purchase prices. Have you been approached by Asian suppliers who would be prepared to increase your monthly volume in exchange for a slightly lower price given the tariffs developments? And would this be good for you because perhaps it would enable you to offer slightly lower prices with higher volume?
Or on the contrary, would this imply short term increases? Right. Thank you, Clement. Now for your first question, the figures from Bank of France are very negative in February, but there’s a strong calendar effect of minus three for February since we lost a day. So the calendar effect is less three on February.
So this had a significant impact on sales. I’m not going to give a comment on sales month by month, but we’ve outperformed basically the market throughout the quarter. And I’m not going to make any comments on April. We’ll go back to that in July. The second question, I would recall that our business is not to buy, it’s to sell.
And therefore, we may indeed be approached by suppliers who will boost volume in return for lower prices. We’re extremely cautious about that, about accumulating stock. We’re very cautious about our cash flow. We’ll see if that does indeed happen, but we will stay within the limits of what we think the market can absorb. We’re not there to absorb excess surplus stock from our suppliers.
And we will look at it if it happens, but we’ll look at it very cautiously indeed in relation to our cash flow and in relation to the market capacity to absorb this. Thank you so much. Mr. Lutigne. The questions are over.
No further questions. Well, I must have been extremely clear. Thank you all very much. Our next meeting will be the general meeting on the June 28. And also the strategic presentation on the June 11.
You should all have received invitations by now. Please do answer quickly because there are relatively few places for the Investor Day. And then the last meeting, July 23 for our annual results. Thank you all for being with us, and I wish you all a very pleasant evening. Thank you.
Goodbye. Ladies and gentlemen, this brings to an end today’s conference call. Thank you for joining us, and you may now hang up. Thank you.
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