It has been an encouraging half-year for Ceconomy, the parent of Saturn and MediaMarkt. The electronics group sold more in its shops and cut its losses by more than half.
Measures for profit
The first half of the 2022-2023 financial year, which ended end-March, gives Ceconomy “full confidence” in the second half of the year. Revenue rose 5.5% to 12.4 billion euros, despite lower online sales (-10%). There was thus strong growth in physical shops (+11%), especially during the “successful Christmas season” and in the German and Turkish markets.
In contrast, the group was still unable to completely eliminate the operating loss. The half-year ended with EBIT of 23 million euros below zero, an improvement of some 61% compared to a year earlier. CEO Karsten Wildberger is working on measures to increase profitability, although he is not yet disclosing which exactly they are.
Services as a cornerstone
On the margin front, the growing services offering already proved successful. ‘Services & Solutions’, such as warranties, used electronic device trade-ins and repairs, are not only remarkably profitable, they also grew by 5.2% to 323 million euros in the second quarter. Services now account for 6.1% of total turnover, becoming “a cornerstone of the business strategy”.
At the same time, MediaMarkt and Saturn are modernising their shops, including new shop concepts and formats better suited to the locations. Interestingly, e-commerce now accounts for 21.5% of total sales – which is still more than the 14% pre-Covid – but 39% of orders are picked up in shops.