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Rating action

Scope Ratings GmbH (Scope) has today downgraded the issuer rating of Fnac Darty S.A. to BBB- from BBB and assigned a Stable Outlook, concluding the review for possible downgrade initiated on 4 August 2025. Scope has also downgraded the senior unsecured debt rating to BBB- from BBB, concluding the review for possible downgrade, and affirmed the S-2 short-term debt rating.

This rating action is driven by the update to Scope’s Retail and Wholesale Methodology, published in June 2025, which modifies the applicable interest coverage ratio to incorporate leases more comprehensively for issuers whose right-of-use assets represent more than two-thirds of total tangible assets. Fnac Darty qualifies for the application of the new Scope-adjusted EBITDA/interest expenses plus lease amortisation metric*, which has required a re-calibration of interest coverage under the updated methodology. Other credit metrics were unaffected by the change in methodology. As a result, Scope has revised Fnac Darty’s financial risk profile score to BBB- from BBB, also yielding a one-notch downgrade in Fnac Darty’s overall credit rating.

The BBB-/Stable rating on Fnac Darty continues to reflect Scope’s expectation that the company remains in a strong position to execute on its strategic plan, notably following the acquisition of Unieuro, and to build on its favourable margin performance to further differentiate itself from immediate peers. The rating also incorporates the highly competitive nature of the consumer electronics and home appliances retail market, Fnac Darty’s geographic concentration in France and Italy, as well as the company’s prudent financial policies to date. In this context, the successful execution of its Beyond Everyday strategic plan unveiled in 2025 is expected to add credit momentum in the business going forward.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: BBB- (unchanged). The company’s credit quality is supported by its strong market shares in France and Italy, as well as its capacity to generate operating profitability which exceeds that of its immediate peers. However, the issuer’s overall industry remains characterised by intense price competition and is subject to ongoing structural changes. Moreover, while Unieuro adds geographic diversification to the company’s footprint, Fnac Darty’s activity remains concentrated in France.

Fnac Darty is one of the largest European retailers of consumer electronics, home appliances and editorial products. It has a strong presence in France, with an estimated 20% market share overall and 30% on the premium sub-segment, supported by its highly recognised Fnac and Darty brands. The 2024 acquisition of Unieuro was credit-positive, allowing the group to surpass the EUR 10bn revenue threshold and expand its geographic reach with the addition of the new subsidiary’s significant market share in Italy (around 17% according to the company). However, the group remains concentrated in France, where 61% of FY 2024 revenues and 77% of the FY 2024 operating profit were generated on a 12-month pro-forma basis including Unieuro.

The consumer electronics and home appliances retail industry in Europe is highly competitive and differentiated mostly on price. Competitors include speciality and mass-market retailers, as well as online retailers and e-commerce platforms such as Amazon. In the future, e-commerce platforms from China may also compete, as evidenced by the ongoing takeover of Fnac Darty’s European peer Ceconomy by JD.com. Nevertheless, Scope believes that Fnac Darty will maintain a solid market position thanks to i) its premium positioning, strong customer service and excellent after-sales support; ii) its relevant omnichannel offering, with over 20% of sales coming from online channels and more than one out of two online purchases collected via click-and-collect promoting foot traffic in stores; iii) its efficient, centralised supply chain model; and iv) its strategic focus on recurring, higher-margin subscription services such as the Darty Max unlimited repair program.

Reported operating profitability will be somewhat diluted in 2025 due to the deconsolidation of the ticketing business and the consolidation of Unieuro, both of which occurred in late 2024. However, Scope views the improving 2025 trajectory positively on a pro-forma basis, with a recorded 50 bps increase in gross margin as of 9M 2025. With an EBITDA margin of 6.3% for the 12 months ending 30 June 2025, Fnac Darty’s profitability remains higher than that of its closest European peer Ceconomy, which has an EBITDA margin of 4.4% for the year ending 30 September 2024. Furthermore, Scope acknowledges the potential for further margin growth should the company successfully integrate Unieuro (EUR 20m in identified synergies) and expansion its subscription-based services in line with the Beyond Everyday strategic plan (doubling the number of subscribers by 2030).

Financial risk profile: BBB- (revised from BBB). The strategic acquisition of Unieuro had a limited impact on leverage, which is favourable for the rating. However, Fnac Darty’s financial risk profile is constrained by moderate interest coverage under the new lease-adjusted Scope definition, as well as moderate cash flow coverage.

With pro-forma leverage of around 2.4x as of FYE 2024 and 2.2x projected by Scope for FYE 2025, the Unieuro acquisition had a limited impact on leverage. This is because the transaction was partly funded by Fnac Darty's main shareholder, Vesa, through a joint venture acquisition vehicle owned by Fnac Darty (51%) and Vesa (49%), with Fnac Darty fully consolidating and maintaining operational control of Unieuro. Additionally, Fnac Darty’s contribution was primarily executed through the issuance of new shares. Scope has yet to see the first concrete results of the recent strategic initiatives, but the company’s targeted margin and EBITDA increases, if executed, should ensure smooth continued deleveraging. Publicly communicated financial policies and a continued prudent stance towards shareholder distributions further support Scope’s expectation of continued de-leveraging. The company targets a medium-term net leverage of 1.5x at year-end, as defined by Fnac Darty.

The change in Scope’s methodological definition to coverage ratios negatively impacts the issuer’s interest coverage assessment. More specifically, Scope expects substantial lease amortisation costs of around EUR 300m in FY 2025, which will weigh on coverage metrics. Scope also forecasts EBITDA/interest expenses plus lease amortisation at 1.8x as of FY 2025. Recent bond refinancings with much higher coupons also negatively impact the ratio. However, Scope expects the ratio to slowly improve going forward as EBITDA expands while lease costs remain broadly flat due to optimised selling areas through refurbishments and new stores that are mainly operated under franchise.

Cash flow coverage is also a moderating factor on Scope’s financial risk profile assessment and is limited by the structural profitability constraints of a highly competitive retail industry, coupled with significant capital expenditures and lease amortisation costs. Funds from operations is expected to increase due to an improvement in the operating margin, and working capital is expected to remain stable in terms of cash movements. However, according to the new strategic plan, the company intends to increase gross capital expenditures from around EUR 160m in FY 2024 to an average of around EUR 200m a year during 2025-2030. This increased investment activity is intended to finance the transformation and upgrade of over 200 stores, as well as the opening of 150 new ones. Together with the annual lease amortisation burden, this will restrict free operating cash flow generation over the next couple of years.

Liquidity: adequate (unchanged). Liquidity is notably supported by ample available cash as of FYE 2024 (EUR 1,062m) and EUR 780m of committed, undrawn bank facilities (EUR 600m at the Fnac Darty level and EUR 180m at the Unieuro level). This is sufficient to cover short-term debt and the significant intra-year working capital swings due to business seasonality. As of 30 June 2025, cash had decreased to EUR 359m, but drawings under working capital lines were limited to EUR 165m. Scope also underlines the Fnac Darty’s proactive debt management with no significant debt instalment before 2029.

Supplementary rating drivers: credit-neutral (unchanged). Supplementary rating drivers have no impact on the issuer rating.

During the rating review Scope identified and corrected past calculation errors related to the treatment of exceptional items, provisions and pension-related liabilities and interest and concluded these corrections had no impact on the rating.

Outlook and rating sensitivities

The Stable Outlook reflects the limited impact of the Unieuro acquisition on the capital structure of Fnac Darty and the expectation that the development of subscription services (the cornerstone of the new strategic plan) and the integration of Unieuro will drive margin expansion, which will support a smooth deleveraging below 2.0x.

The upside scenario for the ratings and Outlook is:

• Debt/EBITDA ratio of below 1.5x on a sustained basis.

The downside scenario for the ratings and Outlook is:

• Debt/EBITDA of above 2.5x on a sustained basis.

Debt ratings

Scope has downgraded the rating assigned to senior unsecured debt issued by Fnac Darty S.A. to BBB- from BBB, resolving the review for a possible downgrade, in line with the issuer rating.

Scope has also affirmed the S-2 rating on the short-term debt issued by Fnac Darty S.A. The rating is based on the underlying BBB-/Stable issuer rating and reflects the better-than-adequate liquidity position as well as the better-than-adequate access to bank funding and capital markets. As such, the short-term debt rating represents the higher of the two possible short-term debt ratings corresponding to issuers rated at BBB-.

Environmental, social and governance (ESG) factors

Overall, ESG factors have no impact on this credit rating action.

All rating actions and rated entities

Fnac Darty SA

Issuer rating: BBB-/Stable, downgrade

Senior unsecured debt rating: BBB-, downgrade

Short-term debt rating: S-2, affirmation

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; Retail and Wholesale Rating Methodology, 25 June 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Kevin Guillou, Director
Person responsible for approval of the Credit Ratings: Karl Yuan Pettersen, Managing Director
The issuer and senior unsecured debt Credit Ratings/Outlook were first released by Scope Ratings on 18 February 2019. The Credit Ratings/Outlook were last updated on 4 August 2025.
The short-term debt Credit Rating was first released by Scope Ratings on 18 February 2019. The Credit Rating was last updated on 10 March 2025.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use/exclusion of liability
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