SMCP - Press Release - 2024 H1 Results
H1 2024 Results
Press release - Paris, July 25th, 2024
Resilient sales excluding
China
Continued financial discipline and execution of the action
plan
- H1
2024 Sales at €585m, decreasing by -3.6% on an
organic0F0F1 basis vs. H1 2023 Sales at €610m
- Sales growth
in America in S1, resilience in Europe, sequential improvement in
Q2 in France and continued very slow consumption in China
- Growth for
Sandro and Maje in the first semester in all regions excluding
China
- Strict
full-price strategy with a two-point decrease of average in-season
discount rate vs H1 2023
- Q2
2024 Sales at €298m, decreasing by -2% on an organic basis
vs Q2 2023 Sales at €305m; positive sales performance excluding
China
-
Pursuit of network optimization
with 29 net closings in the semester, mainly in Asia and for
Claudie Pierlot, to reach 1,701 POS
-
Adjusted EBIT at €19m (3.2% of sales) from €36m in
H1 2023 (6% of sales). One-off effects such as restructuring costs,
and inflationary effects, are partially offset by cost reduction
plans
- Net
income at -€28m includes €30m of non-recurring accounting
impacts of impairment (non-cash). Excluding these effects (net of
income tax), net income is breakeven.
-
Continued financial discipline with a reduction in
inventories (-7% vs FY 2023) and a strict control of investments,
resulting in a decrease in net debt vs June 30th, 2023
and in a stable free-cash-flow
- Pursuit and
acceleration in the second semester of mid-term action
plan to return to profitable growth
- Continued
efforts in CSR with the implementation of the
Diversity and Inclusion policy and satisfactory results in reducing
the carbon footprint (-15% in 2023)
Commenting on those results, Isabelle
Guichot, CEO of SMCP, stated: “In a persistently
challenging macroeconomic environment, as anticipated, the Group
demonstrates resilient performance outside China. The dynamic in
America and sound sales in Europe have partially offset the
continued weakness in consumption in Asia, particularly in China,
where SMCP has already begun to adjust its network of points of
sales, while continuing initiatives aimed at revitalizing
medium-term growth in the country. At Group level, our action plan
launched at the beginning of the year, aimed at reviving our
profitable growth, is beginning to bear fruit. Nevertheless, our
profitability is still affected by one-off effects related to the
restructuring of our store network in China and that of Claudie
Pierlot, as well as additional costs linked to inflation. In the
second half of the year, we will continue our efforts to deploy our
action plan both in terms of driving our sales in promising markets
and optimizing our costs, whose effects should accelerate in 2025
(with the goal of having a positive impact of 25 million euros on
our profitability by 2026). SMCP teams are fully committed to this
trajectory, and I would like to thank them for their unwavering
dedication.”
FINANCIAL INDICATORS
€m |
H1
2023 |
H1
2024 |
Reported
change |
Sales |
609.8 |
585,3 |
-4,0% |
Adjusted
EBITDA |
115.7 |
98.5 |
-14.9% |
Adjusted
EBIT |
36.3 |
18.8 |
-48.5% |
Net
Income |
14.0 |
-27.7 |
-€41.7m |
FCF |
-8.7 |
-8.8 |
-1.1% |
Net Debt |
306.0 |
292.5 |
-4.4% |
SALES
€m |
H1
2023 |
H1
2024 |
Organic
change |
Reported
change |
Sales by region |
|
|
|
|
France |
203.9 |
202.5 |
-0.7% |
-0.7% |
EMEA ex. France |
189.1 |
191.8 |
+0.8% |
+1.4% |
America |
80.3 |
84.8 |
+5.8% |
+5.6% |
Asia Pacific |
136.5 |
106.2 |
-19.9% |
-22.2% |
Sales
by brand |
|
|
|
|
Sandro |
295.5 |
292.3 |
-0.7% |
-1.1% |
Maje |
228.5 |
218.8 |
-3.7% |
-4.2% |
Other brands2 |
85.9 |
74.1 |
-13.8% |
-13.7% |
TOTAL |
609.8 |
585.3 |
-3.6% |
-4.0% |
SALES BREAKDOWN BY REGION
In France, sales reached €202m,
nearly stable (-1%) compared to H1 2023. The trend is significantly
improving in the second quarter (+6% vs Q2 2023) with increased
consumption in stores both in Paris and in other regions,
particularly for Sandro and Maje. Both brands outperformed market
indices3 in the second quarter. Sales performed very
well in B&M, while the continued strategy of discount rate
reduction limited digital growth.
The network is increasing with four net openings during the
semester.
In EMEA, sales reached €192m,
an organic increase of +1% compared to H1 2023, which was a high
basis of comparison (+9% vs H1 2022). The second quarter’s
performance is in line with the first quarter’s trend, driven by
increasing traffic and a strict full-price strategy. Like-for-like
sales are growing in B&M in nearly all retail markets. Retail
partners signed a positive performance during the semester, notably
in the Middle East.
The network recorded nine net closings during the semester (mostly
Claudie Pierlot).
In America, sales reached €85m,
an organic increase of 6% compared to H1 2023, despite a volatile
environment. In a very promotional context, the Group maintained a
strict policy (+2 points improvement of discount rate). In the US,
positive like-for-like performance is driven by B&M, especially
in corners, and by an outstanding success of Sandro Spring-Summer
collection. In Mexico, sales recorded a strong performance
throughout the semester. The network is increasing with six net
openings during the semester.
In APAC, sales reached €106m,
an organic decrease of -20% vs H1 2023. In China, sales continue to
be strongly impacted by the persistent traffic decline and the
network optimisation, in line with the strategy of the Group. The
network is decreasing with 30 stores closed during the semester.
The Group is working on its action plan to renew with sales growth
in the country by working on brands’ desirability and retail
excellence in B&M. In the rest of the region, sales remain
resilient in several markets (Singapore, Vietnam, Malaysia and
Thailand).
H1 2024 CONSOLIDATED RESULTS
Adjusted EBITDA reached €98m in
H1 2024 (adjusted EBITDA margin of 17% of sales), compared with
€116m in H1 2023.
Management gross margin ratio (74.3%) increases
compared to H1 2023 (73.1%), supported by a strict full-price
strategy.
Total Opex (store costs4F4F4 and
general and administrative expenses) are nearly stable vs H1 2023,
excluding one-off costs linked to China network optimisation. Cost
reduction plans partly mitigate the effects of inflation, notably
the 2024 impact of 2023 increases in salaries and rents. However,
due to the sales decrease, Opex are less absorbed in percentage of
sales, by 3 points.
Depreciation, amortization, and
provisions amounted to -€80m in H1 2024, nearly stable vs
H1 2023 (-€79m). Excluding IFRS 16, depreciation and amortization
represent 4.0% of sales in H1 2024, in line with H1 2023.
As a result, adjusted EBIT
reached €19m in H1 2024 compared with €36m in H1 2023. Adjusted
EBIT margin is 3.2% in H1 2024 (6% in H1 2023).
Other non-current expenses
reached -€30m, increasing compared to H1 2023 (-€0.9m); they
include impairment of stores and goodwill (with no impact on
cash).
Financial expenses are
increasing at -€18m in H1 2024 vs -€13M in H1 2023 (including -€7m
of interests on rental debt vs -€5m in 2023). Interest expenses on
financial debt increase (-€9m in H1 2024 vs -€7m in H1 2023), due
to the growth in market interest rates.
Taking into account an income
tax credit of €3m in H1 2024 (vs an expense of -€5m in H1
2023), Net income - Group share stands at -€28m
(€14m in H1 2023). Net result excluding the effect of
non-recurring, non-cash entries (net of income tax) is
breakeven.
H1 2024 BALANCE SHEET AND NET FINANCIAL
DEBT
The Group maintained a strict control over its
inventories and investments during the semester. Inventories went
down from €282m at year-end 2023 to €263m as of June
30th, 2024.
Capex investments were stable as a percentage of
sales, representing 4% of sales in H1 2024.
Net financial debt stands at
€293m as of June 30th, 2024, vs €306m a year earlier. Net
debt/EBITDA ratio stands at 3.1x. The gap vs contractual level of
2.5x was waived by the pool of banks on June 28th, 2024.
This waiver was granted at a level of 3.4x for the test as of June
30, 2024.
CONCLUSION AND OUTLOOK
In an environment that remains complex and
uncertain, on macro-economic, political and geopolitical sides,
SMCP continues to focus on executing the action plan to foster
profitable growth.
Network adjustment, started in H1 in particular
in China, and the strategic repositioning of Claudie Pierlot, will
continue in the second semester.
SMCP will accelerate the retail partners
activity in the second half of 2024, with the first openings in
India and the pursuit of development in South-East Asia.
Action plans aimed at increased cost control are
all initiated and ongoing. Some (optimization of indirect purchases
and personnel costs) will start to bear fruit as early as 2024,
with an amplified effect in 2025 and 2026; others have been
launched but with a more gradual positive effect that will
materialize starting in 2025 (optimization of products’ purchase
costs).
The target of 25m€ positive impact on EBIT by
2026 is confirmed.
OTHER INFORMATION
Consolidated accounts
approvement
The Board of Directors held a meeting today and
approved the consolidated accounts for the first half of 2024. The
limited review procedures have been completed by the auditors and
the related report is being issued.
Update on the proceedings in relation to
the transfer of a 15,9% SMCP stake in 2021
SMCP has been informed that on July 12, 2024,
the English High Court, upon request from GLAS SAS (London Branch)
as trustee of the exchangeable bonds issued by European TopSoho S.à
r.l. (“ETS”), has ruled that the transfer of a 15.9% stake of the
Company’s share capital from ETS to Dynamic Treasure Group Ltd
(“DTG”) in 2021 was invalid. The Judge issued consequently on July
18, 2024 an order requiring, subject to potential legal recourses,
the return by DTG of the 15.9% stake to ETS, which is currently
under liquidation in Luxembourg, by July 26, 2024 at the
latest.
FINANCIAL CALENDAR
October 29, 2024 – Q3 Sales publication
A conference call with
investors and analysts will be held today by CEO Isabelle Guichot
and CFO Patricia Huyghues Despointes, from 6:00 p.m. (Paris time).
Related slides will also be available on the website
(www.smcp.com), in the Finance section.
FINANCIAL INDICATORS NOT DEFINED IN
IFRS
The Group uses certain key financial and
non-financial measures to analyze the performance of its business.
The principal performance indicators used include the number of its
points of sale, like-for-like sales growth, Adjusted EBITDA and
Adjusted EBITDA margin, Adjusted EBIT and Adjusted EBIT margin.
Number of points of
sale
The number of the Group’s points of sale
comprises total retail points of sale open at the relevant date,
which includes (i) directly-operated stores, including
free-standing stores, concessions in department stores,
affiliate-operated stores, factory outlets and online stores, and
(ii) partnered retail points of sale.
Organic sales
growth
Organic sales growth refers to the performance
of the Group at constant currency and scope, i.e. excluding the
acquisition of Fursac.
Like-for-like sales
growth
Like-for-like sales growth corresponds to retail
sales from directly operated points of sale on a like-for-like
basis in a given period compared with the same period in the
previous year, expressed as a percentage change between the two
periods. Like-for-like points of sale for a given period include
all of the Group’s points of sale that were open at the beginning
of the previous period and exclude points of sale closed during the
period, including points of sale closed for renovation for more
than one month, as well as points of sale that changed their
activity (for example, Sandro points of sale changing from Sandro
Femme to Sandro Homme or to a mixed Sandro Femme and Sandro Homme
store).
Like-for-like sales growth percentage is presented at constant
exchange rates (sales for year N and year N-1 in foreign currencies
are converted at the average N-1 rate, as presented in the annexes
to the Group's consolidated financial statements as of December 31
for the year N in question).
Adjusted EBITDA and adjusted EBITDA
margin
Adjusted EBITDA is defined by the Group as
operating income before depreciation, amortization, provisions, and
charges related to share-based long-term incentive plans (LTIP).
Consequently, Adjusted EBITDA corresponds to EBITDA before charges
related to LTIP.
Adjusted EBITDA is not a standardized accounting measure that meets
a single generally accepted definition. It must not be considered
as a substitute for operating income, net income, cash flow from
operating activities, or as a measure of liquidity.
Adjusted EBITDA margin corresponds to adjusted EBITDA divided by
net sales.
Adjusted EBIT and adjusted EBIT
margin
Adjusted EBIT is defined by the Group as earning
before interests, taxes, and charges related to share-based
long-term incentive plans (LTIP). Consequently, Adjusted EBIT
corresponds to EBIT before charges related to LTIP.
Adjusted EBIT margin corresponds to Adjusted EBIT divided by net
sales.
Management Gross
margin
Management gross margin corresponds to the sales
after deducting rebates and cost of sales only. The accounting
gross margin (as appearing in the accounts) corresponds to the
sales after deducting the rebates, the cost of sales and the
commissions paid to the department stores and affiliates.
Retail Margin
Retail margin corresponds to the management
gross margin after taking into account the points of sale’s direct
expenses such as rent, personnel costs, commissions paid to the
department stores and other operating costs.
Net financial debt
Net financial debt represents the net financial
debt portion bearing interest. It corresponds to current and
non-current financial debt, net of cash and cash equivalents and
net of current bank overdrafts.
METHODOLOGY NOTE
Unless otherwise indicated, amounts are
expressed in millions of euros and rounded to the first digit after
the decimal point. In general, figures presented in this press
release are rounded to the nearest full unit. As a result, the sum
of rounded amounts may show non-material differences with the total
as reported. Note that ratios and differences are calculated based
on underlying amounts and not based on rounded amounts.
DISCLAIMER: FORWARD-LOOKING STATEMENTS
Certain information contained in this document
includes projections and forecasts. These projections and forecasts
are based on SMCP management's current views and assumptions. Such
forward-looking statements are not guarantees of future performance
of the Group. Actual results or performances may differ materially
from those in such projections and forecasts as a result of
numerous factors, risks and uncertainties, including the impact of
the current COVID-19 outbreak. These risks and uncertainties
include those discussed or identified under Chapter 2 “Risk factors
and internal control” of the Company’s Universal Registration
Document filed with the French Financial Markets Authority
(Autorité des Marchés Financiers - AMF) on 5 April 2024 and
available on SMCP's website (www.smcp.com).
This document has not been independently verified. SMCP makes no
representation or undertaking as to the accuracy or completeness of
such information. None of the SMCP or any of its affiliate’s
representatives shall bear any liability (in negligence or
otherwise) for any loss arising from any use of this document or
its contents or otherwise arising in connection with this
document.
APPENDICES
Breakdown of point of sales by region
Number of DOS |
H1-23 |
2023 |
Q1-24 |
H1-24 |
|
Q2-24
variation |
H1-24
variation |
|
|
|
|
|
|
|
|
Par
région |
|
|
|
|
|
|
|
France |
463 |
470 |
473 |
475 |
|
+2 |
+5 |
EMEA |
399 |
411 |
410 |
406 |
|
-4 |
-5 |
Amérique |
167 |
176 |
177 |
180 |
|
+3 |
+4 |
Asie
Pacifique |
301 |
316 |
304 |
280 |
|
-24 |
-36 |
|
|
|
|
|
|
|
|
Par
marque |
|
|
|
|
|
|
|
Sandro |
575 |
591 |
586 |
579 |
|
-7 |
-12 |
Maje |
477 |
490 |
488 |
479 |
|
-9 |
-11 |
Claudie
Pierlot |
206 |
210 |
209 |
201 |
|
-8 |
-9 |
Fursac |
72 |
82 |
81 |
82 |
|
+1 |
- |
Total DOS |
1,330 |
1,373 |
1,364 |
1,341 |
|
-23 |
-32 |
Number of POS |
H1-23 |
2023 |
Q1-24 |
H1-24 |
|
Q2-24
variation |
H1-24
variation |
|
|
|
|
|
|
|
|
Par
région |
|
|
|
|
|
|
|
France |
464 |
471 |
473 |
475 |
|
+2 |
+4 |
EMEA |
520 |
555 |
549 |
546 |
|
-3 |
-9 |
Amérique |
200 |
215 |
218 |
221 |
|
+3 |
+6 |
Asie
Pacific |
474 |
489 |
479 |
459 |
|
-20 |
-30 |
|
|
|
|
|
|
|
|
Par
marque |
|
|
|
|
|
|
|
Sandro |
744 |
775 |
767 |
764 |
|
-3 |
-11 |
Maje |
615 |
640 |
636 |
628 |
|
-8 |
-12 |
Claudie
Pierlot |
227 |
233 |
234 |
226 |
|
-8 |
-7 |
Fursac |
72 |
82 |
82 |
83 |
|
+1 |
+1 |
Total POS |
1,658 |
1,730 |
1,719 |
1,701 |
|
-18 |
-29 |
o/w partners |
328 |
357 |
355 |
360 |
|
+5 |
+3 |
CONSOLIDATED FINANCIAL STATEMENTS
INCOME STATEMENT (M€) |
H1 2023 |
H1 2024 |
|
|
|
Sales |
609,8 |
585.3 |
Cost of sales |
-225,5 |
-215.8 |
Gross margin |
384,3 |
369.5 |
|
|
|
Other
operating income and expenses |
-126,1 |
-127.8 |
Personnel
costs |
-142,5 |
-143.3 |
Depreciation,
amortization, and impairment |
-79,4 |
-79.7 |
Share-based Long-Term Incentive Plan |
-3,5 |
-0.9 |
Current operating income |
32,8 |
17.8 |
|
|
|
Other non-current income and expenses |
-0,9 |
-30.4 |
Operating profit |
31,9 |
-12.6 |
|
|
|
Financial
income and expenses |
-0,3 |
-1.2 |
Cost of net debt |
-12,4 |
-16.5 |
Financial income |
-12,7 |
-17.7 |
|
|
|
Profit/(loss) before tax |
19,2 |
-30.3 |
Income tax
expense |
-5,1 |
2.6 |
Net profit/(loss) for the period |
14,0 |
-27.7 |
Basic Group share of net earnings per share (EUR) |
0,19 |
-0.37 |
Diluted Group
share of net earnings per share (EUR) |
0,18 |
-0.37 |
BALANCE SHEET - ASSETS (€m) |
As of Dec. 31, 2023 |
As of June 30, 2024 |
|
|
Goodwill |
626.7 |
604.3 |
|
|
Trademarks, other intangible & right-of-use assets |
1 120.4 |
1 115.0 |
|
|
Property, plant and equipment |
83.1 |
79.1 |
|
|
Non-current financial assets |
18.5 |
18.5 |
|
|
Deferred tax assets |
32.0 |
26.5 |
|
|
Non-current assets |
1 880.7 |
1 843.4 |
|
|
Inventories and work in progress |
281.8 |
262.5 |
|
|
Accounts receivables |
68.2 |
62.7 |
|
|
Other receivables |
69.2 |
64.6 |
|
|
Cash and cash equivalents |
50.9 |
37.2 |
|
|
Current assets |
470.1 |
427.0 |
|
|
|
|
|
|
|
Total assets |
2 350.8 |
2 270.4 |
|
|
|
|
|
BALANCE SHEET - EQUITY & LIABILITIES (€m) |
As of Dec. 31, 2023 |
As of June 30, 2024 |
|
|
Total Equity |
1 180.1 |
1 156.5 |
|
|
Non-current lease liabilities |
305.7 |
319.5 |
|
|
Non-current financial debt |
223.5 |
160.0 |
|
|
Other financial liabilities |
0.1 |
0.6 |
|
|
Provisions and other non-current liabilities |
0.7 |
0.2 |
|
|
Net employee defined benefit liabilities |
4.9 |
4.9 |
|
|
Deferred tax liabilities |
166.9 |
165.4 |
|
|
Non-current liabilities |
701.8 |
651.1 |
|
|
Trade and other payables |
161.9 |
134.4 |
|
|
Current lease liabilities |
106.6 |
95.9 |
|
|
Bank overdrafts and short-term financial borrowings and debt |
113.6 |
169.1 |
|
|
Short-term provisions |
1.3 |
3.6 |
|
|
Other current liabilities |
85.5 |
59.7 |
|
|
Current liabilities |
468.9 |
462.7 |
|
|
|
|
|
|
|
Total Equity & Liabilities |
2 350.8 |
2 270.4 |
|
|
CASH FLOW STATEMENT (€m) |
H1 2023 |
H1 2024 |
Cash from
operations before changes in working capital |
120.1 |
101.6 |
Changes in
working capital |
-14.0 |
-4.5 |
Income tax
expense |
-13.3 |
-3.7 |
Net cash flow from operating activities |
92.9 |
93.4 |
Capital
expenditure |
-23.7 |
-24.1 |
Others |
-6.1 |
0.0 |
Net cash flow from investing activities |
-29.7 |
-24.0 |
Change in
borrowings and debt |
-73.0 |
-37.7 |
Net interests
paid |
-9.0 |
-11.7 |
Other
financial income and expenses |
-0.9 |
-0.7 |
Reimbursement
of rent lease |
-67.5 |
-66.2 |
Net cash flow from financing activities |
-150.3 |
-116.3 |
Net foreign
exchange difference |
-0.5 |
0.3 |
Change in net cash |
-87.8 |
-46.6 |
Réconciliation entre indicateurs de performance
opérationnelle comptable et de gestion
GROSS MARGIN (€m) – excluding IFRS 16 |
H1 2023 |
H1 2024 |
Gross
margin (as appearing in the accounts) |
384.3 |
369.5 |
Readjustment
of the commissions and other adjustments |
61.8 |
65.5 |
Management Gross margin |
446.1 |
435.0 |
Direct costs
of point of sales |
-269.8 |
-274.8 |
Retail
margin |
176.3 |
160.3 |
OPERATING PROFIT (€m) |
H1 2023 |
H1 2024 |
Adjusted EBITDA |
115.7 |
98.5 |
Depreciation.
amortization. and impairment |
-79.4 |
-79.7 |
Adjusted EBIT |
36.3 |
18.8 |
Allocation of
LTIP |
-3.5 |
-0.9 |
EBIT |
32.8 |
17.8 |
Other non-recurring income and expenses |
-0.9 |
-30.4 |
OPERATING PROFIT |
31.9 |
-12.6 |
FCF (€m) |
H1 2023 |
H1 2024 |
Cash from
operations before changes in working capital |
120.1 |
101.6 |
Change in
working capital |
-14.0 |
-4.5 |
Income
tax |
-13.3 |
-3.7 |
Net cash flow from operating activities |
92.9 |
93.4 |
Capital
expenditure (operating and financial) |
-23.7 |
-24.1 |
Reimbursement
of rent lease |
-67.5 |
-66.2 |
Interest &
Other financial |
-9.9 |
-12.4 |
Other &
FX |
-0.5 |
0.3 |
Free cash-flow |
-8.7 |
-8.8 |
NET FINANCIAL DEBT (€m) |
As of Dec. 31. 2023 |
As of June 30. 2024 |
Non-current
financial debt & other financial liabilities |
-223,6 |
-158.0 |
Bank
overdrafts and short-term financial liability |
-113,6 |
-171.7 |
Cash and cash
equivalents |
50,9 |
37.2 |
Net financial debt |
-286,3 |
-292.5 |
adjusted
EBITDA (excl. IFRS) – 12 months |
112,4 |
95.9 |
Net financial debt / adjusted EBITDA |
2,55x |
3.05x |
ABOUT SMCP
SMCP is a global leader in the accessible luxury
market with four unique Parisian brands: Sandro. Maje. Claudie
Pierlot and Fursac. Present in 46 countries. the Group comprises a
network of over 1.600 stores globally and a strong digital presence
in all its key markets. Evelyne Chetrite and Judith Milgrom founded
Sandro and Maje in Paris. in 1984 and 1998 respectively. and
continue to provide creative direction for the brands. Claudie
Pierlot and Fursac were respectively acquired by SMCP in 2009 and
2019. SMCP is listed on the Euronext Paris regulated market
(compartment A. ISIN Code FR0013214145. ticker: SMCP).
CONTACTS
INVESTORS/PRESS
|
|
|
|
SMCP
|
BRUNSWICK |
Amélie
Dernis |
Hugues Boëton |
|
Tristan Roquet Montegon |
+33 (0) 1 55 80 51
00 |
+33 (0) 1 53 96 83 83 |
amelie.dernis@smcp.com |
smcp@brunswickgroup.com |
1 Organic growth | All references in
this document to the “organic sales performance” refer to the
performance of the Group at constant currency and scope
2 Marques Claudie Pierlot et Fursac
3 Retail Int. and Institut Français de la Mode
4 Excluding IFRS 16
- SMCP - Press Release - 2024 H1 Results
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