CORPORATES

CREDIT OPINION AG 13 September 2019 Update to credit analysis

Update Summary The negative outlook on CECONOMY AG's (Ceconomy) Baa3 rating reflects the uncertainty that currently exists over the execution of the company’s transformation programme and its ability to return to previous levels of underlying profitability. In addition, the rating is constrained by (1) the highly competitive, value-driven market; (2) the RATINGS discretionary and very seasonal nature of demand for large parts of the company’s product CECONOMY AG range; and (3) its relatively high reliance on its home market of , thin profit margins Domicile Dusseldorf, Germany and limited scope for revenue growth. Long Term Rating Baa3 Type LT Issuer Rating More positively, the rating reflects Ceconomy’s (1) position as Europe’s largest electronics Outlook Negative retailer, with geographically well-diversified operations across 14 countries, including leadership positions in several large markets; (2) strong distribution network and improving Please see the ratings section at the end of this report for more information. The ratings and outlook shown multichannel capabilities; (3) conservative financial profile, supported by low-funded debt reflect information as of the publication date. and short lease commitments; and (4) its equity stake in French peer DARTY SA (Ba2 stable) and the potential long-term benefits it can bring.

Contacts Exhibit 1 High leverage owing to a decline in profitability and restructuring expenses but expected to Jeanine Arnold +49.69.70730.789 improve as strategic initiatives kick in Associate Managing Director Moody's-adjusted gross debt/EBITDA [email protected] Debt / EBITDA Downward tirgger Guillaume Leglise +33.1.5330.5979 4.5x AVP-Analyst [email protected] 4.0x

3.5x CLIENT SERVICES

Americas 1-212-553-1653 3.0x Asia Pacific 852-3551-3077 2.5x 30/09/2014 30/09/2015 30/09/2016 30/09/2017 30/09/2018 LTM Q3 2019 30/09/2019 (F) 30-09-2020 (F) 30-09-2021 (F) Japan 81-3-5408-4100 Forecast leverage represents Moody's forward-looking view, not the view of the issuer. EMEA 44-20-7772-5454 Source: Moody's Financial Metrics™

Credit strengths » Largest European consumer electronics retailer, with geographically well-diversified operations across 14 countries

» Leading market positions, including the large markets of Germany, , Italy and , supported by a strong brand recognition

» Strong distribution network and improving multichannel capabilities MOODY'S INVESTORS SERVICE CORPORATES

» Financial profile is supported by low-funded debt and short lease commitments

Credit challenges » Execution risks around the recently announced transformation programme and uncertainty over the company's ability to turn around profitability

» Seasonal and discretionary demand for a large part of Ceconomy's product range

» Highly competitive market, with consumers focused on value

» Still reliant on the home market of Germany, despite a wide geographical reach,

» Limited scope for revenue growth and thin profit margins

» Joint and several liability stipulated by the German Transformations Act to only hurt Ceconomy's rating if METRO AG's (Metro, Ba1, under review for downgrade) credit quality deteriorates materially

Rating outlook The negative outlook reflects Ceconomy's recent decline in profitability and its high leverage for the rating category. The outlook also captures the uncertainties around the successful execution of Ceconomy’s restructuring programme launched in April 2019, and in turn, over the company's ability to recover its earnings and margins. Factors that could lead to an upgrade We could stabilise Ceconomy's ratings outlook if the company returns to sustainable growth in profitability, with more visibility around the quality of its earnings. A stable outlook would also require:

» Ceconomy’s gross leverage to remain below 3.5x on a sustained basis;

» Retained cash flow (RCF)/net debt to rise above 20% on a sustained basis; and

» the company to maintain a good liquidity profile

Factors that could lead to a downgrade Conversely, a downgrade of the company’s ratings would likely occur if:

» Ceconomy’s gross leverage is expected to remain above 3.5x on a sustained basis

» its RCF/net debt remains below 20% on a sustained basis

A further deterioration in profitability for the fiscal year ended 30 September 2019 (fiscal 2019) or a deterioration in the company’s liquidity profile could also result in a rating downgrade.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

2 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

Key indicators

Exhibit 2 Key indicators Ceconomy AG

9/30/2015 9/30/2016 9/30/2017 9/30/2018 6/30/2019(L) 12-to-18 month view Revenue (EUR Million) 21,738 21,870 21,605 21,418 21,412 21,400 - 21,600 EBIT / Interest Expense 2.2x 2.8x 3.1x 2.9x 2.3x 2.5x - 3.0x RCF / Net Debt 25.8% 26.0% 23.2% 24.6% 27.3% 25% - 35% Debt / EBITDA 3.6x 3.0x 3.4x 3.2x 3.5x 3.2x - 3.7x

All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations This represents Moody's forward view, not the view of the issuer, and unless noted in the text, does not incorporate significant acquisitions and divestitures. Source: Moody's Financial Metrics™

Profile Headquartered in Düsseldorf, Germany, Ceconomy is Europe's largest consumer electronics retailer, operating two brands: Media-Markt and Saturn. The company generated revenue of €21.4 billion in the last 12 months ended 30 June 2019, is listed on the Frankfurt Stock Exchange and has a current market capitalisation of around €1.6 billion. The company has four anchor shareholders: Haniel, Meridian Stiftung, Beisheim and, since summer 2018, freenet AG. In aggregate, these shareholders own around 53% of Ceconomy’s voting shares.

The company was created by the demerger of the former METRO Group, whose shareholders agreed in June 2017 to split the operations between Ceconomy and Metro Wholesale & Food Specialist. The latter covers the wholesale and food operations and was renamed Metro AG. As part of the demerger agreement, Ceconomy retained a 10% stake in Metro AG, of which 9% were sold to EP Global Commerce in September 2018 and June 2019 while 1% will be held, for tax reasons, until at least September 2023.

Ceconomy owns a 24.33% stake in French consumer electronics retailer FNAC DARTY SA. Ceconomy includes its proportion of FNAC DARTY SA's earnings in its reported EBITDA and EBIT. However, in accordance with our standard practices, we remove this income out of Moody's-adjusted calculations of profitability and relevant credit metrics.

Exhibit 3 Exhibit 4 Diversified revenue and earnings in Europe... … but with some concentration in Germany Revenue breakdown for the 12 months ended 30 June 2019 Breakdown of EBITDA before special items for the 12 months ended 30 June 2019

Eastern Europe Eastern Europe 7% 6%

Western & Southern Europe Western & 29% Southern Europe 33%

Germany, Germany, Austria, Austria, , Switzerland, Hungary Hungary 60% 65%

Excluding segment ”Other” Excluding segment ”Other”. Source: Ceconomy's quarterly statements, 2018 annual accounts Sources: Ceconomy's quarterly statements, 2018 annual accounts

3 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

Detailed credit considerations Weak metrics for the rating category, but earnings should improve over the next owing to new management's transformation programme Ceconomy is currently weakly positioned in its rating category, as reflected in the negative outlook assigned in October 2018, following several profit warnings and some uncertainty over its earnings recovery prospects. Since then, the company has embarked on an ambitious transformation programme (called Reorganization & Efficiency Program), announced by the new management team in April 2019.

The plan includes some short-term restructuring initiatives which aim to reduce the complexity of Ceconomy’s decentralised model and reduce its cost structure. The company targets annual run-rate savings of €110 million-€130 million, with a full year impact from fiscal 2020. The company aims to reorganize its central functions and optimize its portfolio of operating entities. The implementation of this restructuring programme will translate into cash costs of around €200 million, which will be fully expensed this year, but with a cash impact split between this year and the next. While these costs will weigh significantly on the company's reported earnings in 2019, in line with our accounting practices, we do not consider these restructuring costs as exceptional items, and as a result, credit metrics will deteriorate materially in fiscal 2019.

Over the longer-term, the plan also strives to accelerate the shift towards online sales and improve its supply chain efficiency towards a more customer-focused approach.

Exhibit 5 We expect earnings to reach a low point in fiscal 2019, but restructuring initiatives should support profit recovery from 2020 EBIT as reported by the company, excluding FNAC DARTY SA's contribution

Reported EBIT Restructuring charges Savings EBIT margin % (RHS) 600 2.5%

500

400 2.0%

300 1.5% 200

100 1.0%

In In euro millions 0

-100 0.5% -200

-300 0.0% FY2017 FY2018 LTM June-19 FY2019E FY2020E

Fiscal 2017 excludes Russia. Sources: Moody's Investors Service, company's financial reports

While this major transformation programme seems well on track today, as illustrated by the recent agreement with workers council, we believe the overall program still present some execution risks, and as such, there is downside risk to our base case for the 2019-20 period. That being said, the initiatives taken for streamlining the company's central functions and optimising its portfolio, as illustrated by the recent partial disposal of its Greek operations, are positive developments that, if well executed, should support its earnings in the next 18 months.

Ceconomy's results in the first three quarters of fiscal 2019 reflect continued challenging trading conditions linked to intense competition and softer economic growth in most European countries:

» Overall, the company's like-for-like sales grew by only 0.5% in the nine months ended 30 June 2019. Like-for-like sales growth was strongest in the DACH region (Germany, Austria, Switzerland, Hungary) at +1.2%, mainly because of encouraging performance in its largest market, Germany (48% of the group's revenue), but the overall growth was held back by weak operating performance in the Netherlands and Poland (the latter driving Eastern European sales' down 3.5% on a like-for-like basis in the first 9 months to 30 June).

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» Ceconomy's reported EBIT (adjusted for restructuring expenses and excluding FNAC DARTY's contribution) was €249 million in the nine months, stable compared to the same period last year. However, when including restructuring charges, earnings and margin continued to decline. On a Moody's-adjusted basis, Ceconomy's EBIT declined to €288 million in the 12 months to 30 June 2019, compared to €575 million in fiscal 2018 (full year ended 30 September 2018). This translates to an adjusted EBIT margin stood of 1.3%, compared to 2.7% in fiscal 2018, a low level compared to peers.

Exhibit 6 Ceconomy's profitability is low compared with that of its peers Moody's-adjusted EBIT margin

2014 2015 2016 2017 2018 LTM 9%

8%

7%

6%

5%

4%

3%

2%

1%

0% (A3 positive) (Baa1 stable) Game Stop (Ba2 negative) FNAC DARTY (Ba2 stable) BUT (B2 stable) (Ba3 negative) Ceconomy (Baa3 negative) Source: Moody's Financial Metrics™

For now, the financial profile remains solid because of low-funded debt and short lease profile Since its separation from Metro, Ceconomy's credit profile has benefited from a low level of funded debt. As of Q3 fiscal 2019, the company had reported a debt of €434 million, equivalent to more than 1x the reported EBITDA in the 12 months to 30 June 2019, and less than the cash level of €864 million as of the same date. Of the €4.1 billion of adjusted debt at that stage, €3.1 billion is related to the capitalised operating lease liabilities, which we capitalise at 5x current rents, the floor in our existing methodology (under which the Net Present Value of future lease commitments is €2.5 billion).

Although the company's long-term strategy aims at leading the consolidation in the sector, it has also maintained a public commitment to its investment-grade credit rating. In this regard, the recent disposal of Ceconomy's 9% stake in Metro was credit positive. The sale was done in two steps (September 2018 and in June 2019), for a total of at least €400 million.

In light of this transaction and a seasonal working capital inflow in Q4 of fiscal year 2019, we believe that the company will have little short-term gross borrowings as of the end of fiscal 2019.

The recent decline in profitability, coupled with restructuring charges, will weigh on the company's Moody's-adjusted gross leverage, which we expect to peak at around 4.0x as of September 2019, compared with 3.2x in fiscal 2018. We, nevertheless, expect Ceconomy's adjusted leverage to trend below 3.5x as of fiscal 2020 because of the effects of the ongoing reorganisation and efficiency programme, which we believe should result in a recovery in Moody's-adjusted EBITDA towards the level of 1.2 billion, compared to around €1 billion in fiscal 2019.

However, we would stress the fact that because of the uncertainties around the execution of the plan mentioned earlier, there is a downside potential to our assumptions. Nevertheless, if the company performed in line with our base case scenario, we would expect both its leverage ratio and its RCF/net debt metric to remain stronger than the levels signaled for a downward rating pressure. Furthermore, assuming slightly lower capital spending compared to last year, stable level of tax payment and no dividend payouts, we currently expect underlying free cash flow (FCF) to remain slightly positive in both fiscal 2019 and fiscal 2020.

Largest European consumer electronics retailer, with geographically well-diversified operations across 14 countries With its two brands, Media Markt and Saturn, Ceconomy has a long-standing history in consumer electronics retail and enjoys very high levels of brand awareness in all countries where it operates. The company is Europe’s largest consumer electronic retailer by a large distance — its revenue is around twice those of Dixons Carphone and 3x those of FNAC DARTY SA. Ceconomy has outright market leadership in eight countries, including the large markets of Germany, Spain and Italy. In its home market of Germany as well as

5 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

in Austria, the company operates under both brands and enjoys the largest markets shares, with around 17% in Germany and 24% in Austria.

High market shares are vital drivers of profitability, largely because of superior economies of scale than that of key competitors. In this regard, it is worth noting that Ceconomy generally enjoys higher EBIT margins where its market position is the most dominant, such as in Germany, Austria and Spain. More specifically, Ceconomy's large scale is credit positive as it provides the company with better purchasing power than smaller locally focused competitors. Furthermore, the company’s geographical diversity partially mitigates the exposure to cyclical demand linked with the discretionary nature of large parts of the company’s product range.

Large scale is a key advantage in the consumer electronics retail segment, where price transparency is high, as better terms from suppliers give the scope for offering consumers the best possible value for money. The contemplated purchasing alliance (European Retail Alliance) between Ceconomy and FNAC DARTY SA, announced in 2018, has been put on hold while Ceconomy focuses on its transformation programme and the turnaround of its operations first. If pursued in the future, this alliance could maximise the benefits of scale for both parties.

Strong distribution network and improving multichannel capabilities Ceconomy has an extensive network of more than 1,000 stores across Europe, with concentration in Germany, where around 40% of the stores are located. In fiscal year 2018, the average store size was 2.700 square meters. The majority of outlets are flagship or core format stores, which are large in size (flagship stores are usually larger than 5,000 square metres and core format stores are around 2,500 square metres), but the company is now focusing on future network growth, predominantly on smaller stores. This strategy will enable the company to open stores, thereby gaining more market share and reducing its average leasing expenses per store. Leasing costs were substantial at €628 million in fiscal 2018 or around 1.5x the size of Ceconomy’s reported underlying EBIT generation. Ceconomy has already made some progress in reducing its leasing expenses, which fell from 3.5% of its sales in fiscal 2014 to 2.9% in fiscal 2018 because some existing contracts were renegotiated, loss-making stores were closed and additional stores were downsized. We do not expect Ceconomy’s store estate to grow substantially, which will limit its capital investments, because online sales will be the predominant growth driver.

Online penetration in the consumer electronics retail market is among the highest of all retail categories and is now well above 20% in a number of countries where Ceconomy operates, compared with a single-digit online penetration rate 10 years earlier. The rising trend towards online purchases has adversely affected industry profit margins as retailers sell largely identical products, causing the prices to drop because of the ease with which consumers can compare online. This explains the high and still-increasing market shares captured by aggressive online competitors, such as Amazon.com, Inc. (A3 positive) in most European countries and CoolBlue in the Netherlands.

Ceconomy's combination of a large store network, with a wide-range online offering, is a key competitive defense mechanism against pure online retailers. The company's focus on enhancing its multichannel capabilities in recent years is sound, with all stores having pickup locations, mostly available for same-day delivery. Pickup sales account for around 44% of its online orders, and Ceconomy’s online sales were growing strongly, at 15.8% for the nine months ended 30 June 2019. As such, Ceconomy’s online sales accounted for 13.6% of its total sales in the 12 months ended 30 June 2019, compared with 6.9% four years earlier, and we expect the strong double- digit growth rate to continue.

Ceconomy’s market share in the traditional bricks-and-mortar channel is larger than its overall market share because it is still underrepresented in the growing online channel. Despite improvements in recent years, Ceconomy’s online market share is only around half as high as its brick-and-mortar equivalent and differs widely across different countries, which, to a large degree, reflects the competitive landscape in the internet channel.

Demand for large parts of Ceconomy's product range is very seasonal and discretionary In addition to the general macroeconomic drivers of overall consumer spending, the consumer electronics sector is influenced by a number of other factors including product evolution, demographic changes, and the increasing trend towards digitalisation and connectivity. The discretionary nature of different product categories within the consumer electronics sector differs widely with white goods (which accounts for over 40% of the European market), such as washing machines and dish washers being less discretionary and largely replacement-driven, while more fashion-driven products, including home entertainment gadgets, are highly discretionary, with the demand more volatile and subject to consumer confidence.

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Exhibit 7 High reliance on consumer electronic products Revenue split by product category for fiscal 2018

Other 5% Entertainment White goods 9% 22%

Telecom 21%

Brown goods 22%

Computer hardware & Accessories 21%

Source: Company's presentation

Ceconomy’s business is very seasonal, with the Christmas quarter accounting for around one-third of its annual sales, but more than 50% of the annual EBIT generation. In recent years, the arrival of the concept in Europe as of the end of November every year has added further complexity to the seasonality as retailers now have to carefully manage two peaks in a short period.

The company’s working capital swings are even more seasonal than its profit, with a cash swing of around €1.2 billion between the end of September and the end of December, subsequently reversing as of the end of March. Strong cash sales receipts and reduction in inventory in Q1 of Ceconomy's fiscal year are followed by large supplier payments for the Christmas season only being made in the new year, the second quarter of the fiscal year. As such, with cash balances typically peaking at the end of the calendar year, the company's RCF/net debt metric is stronger at that time than at the end of September or March.

Joint and several liability stipulated by the German Transformations Act will only hurt Ceconomy's rating if Metro's credit quality deteriorates materially Both Ceconomy and Metro are subject to a joint and several liability, stipulated by the German Transformations Act (German Law), which covers existing liabilities from before the demerger for five years (10 years for pension liabilities). As Metro assumed almost the entire funded debt of the former Metro group, there is a risk that Ceconomy could be liable for a significant portion of Metro’s debt should Metro default ahead of the five-year anniversary of the separation, that is before July 2022.

This potential risk has not had a material bearing on our view of Ceconomy's credit quality because of Metro's solid credit profile (Ba1 stable since the demerger). However, as we stated in July 2019 following our decision to place Metro's ratings under review for possible downgrade, the potential leveraged takeover of Metro, would translate into a substantial increase of Metro's debt, and could lead to a downgrade of two notches or more (see our press release). While the risk of a default of Metro appears remote today, the probability of default would increase significantly if Metro's rating were to fall into the single B category, which could ultimately result into downward pressure on Ceconomy’s rating. Environmental, social and governance considerations We take into account the impact of environmental, social and governance (ESG) factors when assessing companies' credit quality. In the case of Ceconomy, the main ESG-related drivers are:

1. Exposure to increasing social risks, related to changing consumer preferences and spending patterns. The consumer-electronic retail sector has been undergoing a structural shift towards e-commerce, which has increased pressure on incumbent retailers like Ceconomy. In addition, German retail store-based operations are a labour-intensive sector and measures such as minimum staff requirements and wage inflation could affect costs. Also, as part of its restructuring programme, Ceconomy targets a large proportion of cost savings in its central functions, which could translate in a collective layoff in Germany. As of 30 September 2018, the group employed around 62,000 workers.

7 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

2. A relatively complex corporate structure. Ceconomy's corporate governance structure is in line with German law and the articles of association. The Supervisory Board consists of 20 members and, consistent with the German Codetermination Act (MitBestimmG), includes equal numbers of shareholder and employee representatives. The supervisory board has 10 independent members. However, in addition to the presence of several strategic shareholders at the level of Ceconomy, the company's core operating subsidiary, Media-Saturn-Holding GmbH, is still 21.6% owned by the founding Kellerhals family, through its family office Convergenta. There is potential for the preferences of these stakeholders to differ and indeed, historically Convergenta was regularly in dispute with Ceconomy's strategies. However, Ceconomy's new management and Convergenta have recently re-engaged discussions and are working together on the implementation of the company's restructuring programme. We note positively too the fact that Convergenta agreed to the recent partial disposal of Media-Saturn's Greek operations.

Liquidity analysis We continue to believe that Ceconomy has a satisfactory liquidity profile. As of June 2019, the company had a cash balance of €864 million and short-term borrowings of €150 million under a total of around €1.5 billion of liquidity facilities, which comprise a syndicated committed credit facility of €550 million, bilateral credit facilities of €465 million and a €500 million Euro Commercial Paper Programme.

While Ceconomy needs a large liquidity buffer because of the very large working capital seasonality mentioned earlier, we do not expect the company to draw the committed credit facilities during the year ahead because of a positive FCF generation. While FCF will decline significantly this year because of weak profitability and the cash outflows in relation to the restructuring programme, this will be compensated by contained capital spending and the skip of dividends this year. In fiscal 2020, while the company may resume its targeted dividend payout (45%-55% of earnings per share), we expect FCF to remain slightly positive because of the recovery in earnings stemming from the restructuring plan.

8 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

Rating methodology and scorecard factors The principal methodology used in these ratings was our Retail Industry rating methodology, published in May 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Exhibit 8 Rating Factors Ceconomy AG

Current Retail Industry Scorecard [1] Moody's 12-18 Month Forward View (2) LTM 6/30/2019

Factor 1 : Scale (10%) Measure Score Measure Score a) Revenue (USD Billion) $24.4 Baa $24.4 Baa Factor 2 : Business Profile (30%) a) Stability of Product Ba Ba Ba Ba b) Execution and Competitive Position Ba Ba Ba Ba Factor 3 : Leverage and Coverage (45%) a) EBIT / Interest Expense 2.3x Ba 2.5x - 3x Ba b) RCF / Net Debt 27.3% Baa 25% - 30% Baa c) Debt / EBITDA 3.5x Ba 3.2x - 3.7x Baa Factor 4 : Financial Policy (15%) a) Financial Policy Baa Baa Baa Baa Rating: a) Indicated Outcome from Scorecard Ba1 Baa3 b) Actual Rating Assigned Baa3 Baa3

(1) All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations. (2) This represents Moody's forward view, not the view of the issuer, and unless noted in the text, does not incorporate significant acquisitions and divestitures. Source: Moody's Financial Metrics™

Appendices

Exhibit 9 Peer comparison table Ceconomy AG CECONOMY AG FNAC DARTY SA Amazon.com, Inc. Best Buy Co., Inc. GameStop Corp. Baa3 Negative Ba2 Stable A3 Positive Baa1 Positive Ba2 Negative

FYE FYE LTM FYE FYE LTM FYE FYE LTM FYE FYE LTM FYE FYE LTM (in US millions) Sep-17 Sep-18 Jun-19 Dec-17 Dec-18 Jun-19 Dec-17 Dec-18 Jun-19 Feb-18 Feb-19 May-19 Feb-18 Feb-19 May-19 Revenue $23,874 $25,490 $24,430 $8,415 $8,827 $8,625 $177,866 $232,887 $252,063 $42,151 $42,879 $42,912 $8,547 $8,285 $8,047 EBITDA $1,396 $1,541 $1,337 $589 $695 $678 $18,332 $31,419 $37,279 $3,382 $3,561 $3,626 $965 $804 $754 Total Debt $5,126 $4,774 $4,674 $2,496 $2,407 $2,289 $63,203 $70,832 $71,715 $5,557 $5,499 $4,215 $2,677 $2,637 $1,284 Cash & Cash Equiv. $1,018 $1,295 $984 $930 $1,050 $542 $20,522 $31,750 $22,616 $1,101 $1,980 $1,561 $854 $1,624 $543 EBITDA Margin 5.8% 6.0% 5.5% 7.0% 7.9% 7.9% 10.3% 13.5% 14.8% 8.0% 8.3% 8.5% 11.3% 9.7% 9.4% EBIT / Int. Exp. 3.1x 2.9x 2.3x 2.7x 3.0x 2.7x 3.6x 5.9x 7.1x 9.4x 9.1x 10.0x 3.8x 2.8x 2.7x Debt / EBITDA 3.4x 3.2x 3.5x 4.0x 3.6x 3.4x 3.4x 2.3x 1.9x 1.6x 1.5x 1.2x 2.8x 3.3x 1.7x RCF / Net Debt 23.2% 24.6% 27.3% 30.3% 31.4% 23.8% 47.3% 87.7% 82.2% 54.4% 70.7% 96.5% 35.9% 50.2% 64.7% FCF / Debt 3.4% 8.7% -2.7% 7.5% 5.7% 0.8% 10.1% 24.4% 28.6% 18.8% 19.9% 20.6% 6.2% 2.8% -4.6%

All figures and ratios are calculated using Moody’s estimates and standard adjustments. FYE = Financial year-end. LTM = Last 12 months. RUR* = Ratings under review, where UPG = for upgrade and DNG = for downgrade. Source: Moody's Financial Metrics™

9 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

Exhibit 10 Debt adjustments breakdown Ceconomy AG

FYE FYE FYE FYE FYE LTM Ending (in EUR Millions) Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Jun-19

As Reported Debt 417 423 4,759 544 440 434 Pensions 811 718 769 622 530 530 Operating Leases 3,320 3,320 3,320 3,170 3,140 3,140 Non-Standard Adjustments 0 0 -4,741 0 0 0

Moody's-Adjusted Debt 4,548 4,461 4,107 4,336 4,110 4,104

All figures are calculated using Moody’s estimates and standard adjustments. Source: Moody's Financial Metrics™

Exhibit 11 EBITDA adjustments breakdown Ceconomy AG

FYE FYE FYE FYE FYE LTM Ending (in EUR Millions) Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Jun-19

As Reported EBITDA 555 566 636 641 493 648 Pensions 0 0 0 -12 -3 -3 Operating Leases 664 664 664 634 628 628 Unusual 17 10 48 0 198 -67 Non-Standard Adjustments 0 0 0 0 -21 -34

Moody's-Adjusted EBITDA 1,236 1,240 1,348 1,263 1,295 1,172

Note: Unusual adjustment in FY2018 mainly relates to the reversal of the Metro stake impairment; Non-Standard Adjustments mainly relate to the removal of FNAC DARTY equity income contribution; All figures are calculated using Moody’s estimates and standard adjustments. Source: Moody's Financial Metrics™

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Exhibit 12 Select historical and projected Moody's-adjusted financial data Ceconomy AG

FYE FYE FYE FYE FYE LTM Ending FYE FYE INCOME STATEMENT Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Jun-19 Sep-19 (F) Sep-20 (F)

Revenue 20,983 21,738 21,870 21,605 21,418 21,412 21,440 21,400 EBITDA 1,236 1,240 1,348 1,263 1,295 1,172 1,020 1,196 EBIT 429 474 542 536 600 462 302 478 BALANCE SHEET Cash & Cash Equivalents 877 979 769 861 1,115 864 1,434 1,413 Total Debt 4,548 4,461 4,107 4,336 4,110 4,104 4,110 4,110 CASH FLOW Capex = Capital Expenditures 726 708 846 739 679 635 -737 -747 Dividends 75 56 48 143 120 30 30 50 Retained Cash Flow 880 899 867 807 736 884 935 776 RCF / Debt 19.3% 20.1% 21.1% 18.6% 17.9% 21.5% 22.8% 18.9% Free Cash Flow (FCF) 265 -11 -202 147 356 -109 69 -20 FCF / Debt 5.8% -0.2% -4.9% 3.4% 8.7% -2.7% 1.7% -0.5% PROFITABILITY % Change in Sales (YoY) 3.6% 0.6% -1.2% -0.9% 0.6% 0.5% 0.5% SG&A % of Sales 20.1% 19.7% 19.0% 17.9% 17.5% 17.7% 19.9% 19.9% EBIT Margin % 2.0% 2.2% 2.5% 2.5% 2.8% 2.2% 1.4% 2.2% EBITDA Margin % 5.9% 5.7% 6.2% 5.8% 6.0% 5.5% 4.8% 5.6% INTEREST COVERAGE EBIT / Interest Expense 2.1x 2.2x 2.8x 3.1x 2.9x 2.3x 1.7x 2.7x EBITDA / Interest Expense 6.0x 5.8x 7.0x 7.3x 6.2x 5.8x 5.7x 6.7x (EBITDA - CAPEX) / Interest Expense 2.5x 2.5x 2.6x 3.0x 3.0x 2.7x 1.6x 2.5x LEVERAGE Debt / EBITDA 3.7x 3.6x 3.0x 3.4x 3.2x 3.5x 4.0x 3.4x Debt / (EBITDA - CAPEX) 8.9x 8.4x 8.2x 8.3x 6.7x 7.6x 14.5x 9.2x Avg.Assets / Avg.Equity 50.6x 49.4x 36.5x 21.3x 17.0x 19.9x 15.9x 13.7x

Moody's projections (F) are Moody's opinion and do not represent the views of the issuer. Source: Moody's Financial Metrics™

Ratings

Exhibit 13 Category Moody's Rating CECONOMY AG Outlook Negative Issuer Rating Baa3 Commercial Paper -Dom Curr P-3 ST Issuer Rating P-3 Source: Moody's Investors Service

11 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

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12 13 September 2019 CECONOMY AG: Update to credit analysis MOODY'S INVESTORS SERVICE CORPORATES

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13 13 September 2019 CECONOMY AG: Update to credit analysis