Seb SA · EURONEXT:SK
Seb SA — Groupe SEB — H1 2018 Earnings Presentation
53 slides from Seb SA's earnings presentation, Jul 25, 2018
Slide 1: First-Half 2018 Sales and Results
FIRST-HALF 2018 SALES AND RESULTS Paris | July 25, 2018 Listen to the webcast of the meeting on www.groupeseb.com
Slide 2: Note
FIRST-HALF 2018 SALES AND RESULTS NOTE This presentation may contain certain forward-looking statements regarding Groupe SEB’s activity, results and financial situation. These forecasts are based on assumptions which seem reasonable at this stage but which depend on external factors including trends
Slide 3: Agenda
FIRST-HALF 2018 SALES AND RESULTS 1 General Group environment and market 2 WMF update 3 H1 2018 sales and results 4 Outlook Half-year 2018 Sales and Results 3
Slide 4: General environment
General environment Half-year 2018 Sales and Results 4
Slide 5: Market environment – H1 2018
Market environment – H1 2018 ENVIRONMENT IMPLICATIONS AND SEB PERFORMANCE Contrasted growth in SDA Sustained organic growth despite demanding • China, EMEA growing comparatives • Complicated in LATAM region Market share gains Increased volatility in currencies and raw Targeted price increa
Slide 6: Key figures at end-June 2018
Key figures at end-June 2018 Sales ORfA €3,025m €208m €224m +2.9% +7.4% lfl -2.8% -2.9% lfl* Net Profit Net debt €91m €2,015m +9.5% +€110m vs. 12/31/2017 *And excl. One-off WMA PPA Half-year 2018 Sales and Results 6
Slide 7: WMF update
WMF update Half-year 2018 Sales and Results 7
Slide 8: WMF Consumer update: mixed trends
WMF Consumer update: mixed trends Germany • Tense German market in cookware • Sales decline in some retail channels • Market shares gains in Pots & Pans Internationally • Other EMEA countries growing • Fewer loyalty programs vs. 2017 (Taiwan) • Distribution transition still undergoing in some countr
Slide 9: WMF Consumer update: concrete progress
WMF Consumer update: concrete progress Product dynamic • Enhanced offering in WMF and Home & Cook stores • Innovation: Fusiontec and Lono ranges… Growth in e-commerce sales: + 20% Spain: + 21% sales • Expanded distribution : department stores, e-commerce, WMF store opening in Majorca Turkey : Upturn
Slide 10: WMF Professional: €290m, +2.4% lfl
WMF Professional: €290m, +2.4% lfl High 2017 comparatives in Professional Coffee Continued growth in DACH • Focus on innovation, digitalization and services • Many tenders in progress Accelerated development internationally • New accounts won in Western / Central Europe, China, Thailand, Malaysia, I
Slide 11: WMF Professional RaceTrac
WMF Professional RaceTrac Convenience stores / local service stations 450 outlets in 4 states 3-4 machines delivered by outlet Half-year 2018 Sales and Results 11
Slide 12: WMF Professional Luckin Coffee
WMF Professional Luckin Coffee Founded in Nov. 2017: now #2 coffee shops chain in China 525 outlets in 13 cities and an ambitious expansion plan > 1,000 machines delivered at end June Half-year 2018 Sales and Results 12
Slide 13: First-Half 2018 Sales and Results
FIRST-HALF 2018 SALES AND RESULTS Half-year 2018 Sales and Results 13
Slide 14: Sales and Results: Satisfactory performance
Satisfactory performance 1 Sales 2 Results Half-year 2018 Sales and Results 14
Slide 15: Change in sales H1 2017 to H1 2018
Change in sales H1 2017 H1 2018 In €m +217 -140 3,025 +7 2,941 Organic Currency Other growth impact +7.4% -4.7% +0.2% +2.9% H1 2017 H1 2018 Half-year 2018 Sales and Results 15
Slide 16: Currency impact on sales in H1 2018
Currency impact on sales in H1 2018 In €m 0 -5 -10 -15 -€140m -20 Q1: -€86m -25 Q2: -€54m -30 -35 -40 KRW BRL JPY ARS CHF RUB TRY CNY Autres COP MXN USD Half-year 2018 Sales and Results 16
Slide 17: Quarterly organic growth in sales
Quarterly organic growth in sales H1 In % 2016 2017 2018 +6.1% +10.1% +7.4% 12 11.5 10 8.8 8.6 8.4 8 7,3 7.4 6 6.9 6.5 6.0 5.1 4 2016 2 2017 2018 0 Q1 Q2 Q2 Q4 Half-year 2018 Sales and Results 17
Slide 18: H1 sales
H1 sales As 2017… 2018… LFL… In €m reported EMEA 1,316 1,337 +1.7% +4.2% Western Europe 988 997 +0.9% +1.3% Other countries 328 340 +4.1% +12.9% AMERICAS 407 338 -17.0% -7.5% North America 249 204 -17.9% -11.5% South America 158 134 -15.5% -0.7% ASIA 925 1,060 +14.4% +20.0% China 680 825 +21.4% +26.
Slide 19: Q2 sales
Q2 sales As Q2 2017 Q2 2018 LFL In €m reported EMEA 657 652 -0.6% +2.1% Western Europe 494 494 +0.1% +0.4% Other countries 163 158 -2.7% +7.4% AMERICAS 203 177 -12.9% -3.9% North America 123 112 -9.0% -2.7% South America 80 65 -18.8% -5.6% ASIA 406 481 + 18,4 % +20.9% China 277 357 + 28,9 % +30.4% O
Slide 20: Sales breakdown by region in H1
Sales breakdown by region in H1 9% Western Europe 39% Other EMEA countries 28% €3,025m North America South America China 4% Other countries Asia-Pacific 8% 12% Mature countries 53 % Emerging countries 47 % Half-year 2018 Sales and Results 20
Slide 21: Top-20 countries’ performance – H1
Top-20 countries’ performance – H1 TOP 10 COUNTRIES CHINA Belgium JAPAN Poland GERMANY SPAIN Colombia ITALY Switzerland RUSSIA Turkey Mexico FRANCE SOUTH KOREA UNITED STATES Netherlands BRAZIL Austria United Kingdom Canada LFL, excl. Professional business Half-year 2018 Sales and Results 21
Slide 22: Country news
Country news Turkey Poland Ukraine Spain Colombia Brazil United States China Half-year 2018 Sales and Results 22
Slide 23: Turkey
Turkey H1 2018 sales: +35% lfl • No. 2 in SDA, Market Share gains +0.2 pt • Growth driven by volumes and prices • Strong dynamic for locally manufactured products • Excellent sell-out from Group retail • WMF integration well under way Half-year 2018 Sales and Results 23
Slide 24: Poland
Poland H1 2018: +29% lfl • Overall robust dynamic • Market share gains in SDA: +2.1 pts • Investment stepped up in outlets • Doubled sales in full auto machines Half-year 2018 Sales and Results 24
Slide 25: Ukraine
Ukraine H1 2018 sales: +66% lfl • Overall growth in SDA • Market share gains: +4.6 pts • Groupe SEB no. 2 in SDA, leader in cookware Half-year 2018 Sales and Results 25
Slide 26: Spain
Spain H1 2018 sales: +2% / +5% excl. B2B and LPs • Market share gains in SDA: +0.4 pt Consolidated leadership in SDA, Rowenta no.1 brand • Excellent start-up in robot vacuum cleaners • Very satisfactory initial results from WMF integration Half-year 2018 Sales and Results 26
Slide 27: Colombia
Colombia H1 2018 sales: +7% lfl • Market share gains in SDA: +1,5 pt • Good dynamic in fans and blenders • Strong improvement in operating margin in cookware Half-year 2018 Sales and Results 27
Slide 28: Brazil
Brazil H1 2018: -5% lfl • Strong performance in fans, leadership confirmed • Industrial transition in cookware • Truck-driver strike impact • Fragility of some retailers Half-year 2018 Sales and Results 28
Slide 29: United States
United States H1 2018 sales: -12% lfl • Half-year impacted by unfavorable 2017 base effect (KRUPS electrical appliances) • Good Q2 in cookware and linen care • Challenges persist in retail • Online sales development Half-year 2018 Sales and Results 29
Slide 30: China
China H1 2018 sales: +27% lfl • Excellent performance in SDA, +30% Market share: +2.2 pts vs. end-2017 • Strong growth in cookware • Continued development in online sales • Ramp-up in new categories Half-year 2018 Sales and Results 30
Slide 31: Supor: new growth drivers
Supor: new growth drivers New categories Kitchenware Home and personal care Extractor hoods and cooking H1 sales +35% H1 sales +54% H1 sales +68% Half-year 2018 Sales and Results 31
Slide 32: Product news
Product news Product line performance Cookware Fusiontec range Home and linen care Kitchen electrics Lono range Development of digital apps Half-year 2018 Sales and Results 32
Slide 33: Product line performance
Product line performance Growth in sales, lfl % Home care 30 Electrical 25 cooking 20 Beverage Food preparation 15 Home comfort Cookware preparation 10 Linen care 5 0 Personal -5 care -10 Half-year 2018 Sales and Results 33
Slide 34: Cookware
Cookware T-FAL Stackables ClipsoMinut’ Duo Half-year 2018 Sales and Results 34
Slide 35: FUSIONTEC range
FUSIONTEC range Half-year 2018 Sales and Results 35
Slide 36: Home and linen care
Home and linen care Silence Force Arno Access Steam Care XTP Cyclonic 4A+ IXEO Air Force 460 Half-year 2018 Sales and Results 36
Slide 37: Kitchen electrics
Kitchen electrics Companion range Cook4me+ Krups Arno Powermax 1000 Cake Factory Roma / Pisa Half-year 2018 Sales and Results 37
Slide 38: LONO range
LONO range Half-year 2018 Sales and Results 38
Slide 39: Development of digital apps
Development of digital apps Apps • 11 apps to date incl. 2 launches in H1 2018 (Pure Air and My Smart Force) • 2.5 million downloads of Food apps • 400,000 active users per month • 800,000 accounts created, incl. 350,000 in 2017 • 1,250 recipes created by the Cookeo & Companion communities in France
Slide 40: Sales and Results: Results
Satisfactory performance 1 Sales 2 Results Half-year 2018 Sales and Results 40
Slide 41: Operating Result from Activity (ORfA)
Operating Result from Activity (ORfA) In €m H1 2017 H1 2018 Δ Sales 2,941 3,025 +2.9% Operating expense 2,711 2,817 +3.9% ORfA before one-off PPA 230 208 -9.9% Op. margin before one-off PPA 7.8 % 6.9 % -0.9pt One-off PPA 17 0 ORfA 213 208 -2.8% Half-year 2018 Sales and Results 41
Slide 42: ORfA construction H1 2017 to H1 2018
ORfA construction H1 2017 H1 2018 In €m +14 -13 +39 -26 224 213 -20 +17 -16 208 Volumes Price COGS Growth Admin. & One-off PPA Currencies Mix drivers comm. expenses H1 2017 H1 2018 H1 2018 LFL Half-year 2018 Sales and Results 42
Slide 43: Operating profit
Operating profit H1 2017 H1 2018 In €m Operating Result from 213 208 -2.8% Activity (ORfA) Discretionary and non- (11) (10) discretionary profit sharing Other operating income and (24) (12) expense Operating profit 178 186 +4.2% Half-year 2018 Sales and Results 43
Slide 44: Net profit
Net profit In €m H1 2017 H1 2018 Operating profit 178 186 +4.2% Interest expense (17) (16) Other financial expense (27) (20) Tax (31) (36) Non-controlling interests (19) (23) Net profit 83 91 +9.5% Half-year 2018 Sales and Results 44
Slide 45: Simplified Balance Sheet
Simplified Balance Sheet In €m 06/30/2017 * 06/30/2018 Tangible fixed assets 3,524 3,540 Operating WCR 1,122 1,219 Total assets to be 4,646 4,759 financed Equity 1,739 1,984 Provisions 445 385 Other current assets and liabilities 397 375 Net debt 2,065 2,015 Total financing 4,646 4,759 *After finali
Slide 46: Change in WCR
Change in WCR In €m 1,219 26 1200 1,122 24 1000 923 as 22 a % of sales 800 20 19.0% 18.4% 600 17.6%* 18 400 16 200 14 0 12 06/30/2016 06/30/2017 06/30/2018 * WMF proforma Half-year 2018 Sales and Results 46
Slide 47: Change in net debt
Change in net debt In €m Operating cashflow: €62m (€91m in H1 2017) 2,015 +63 +118 -9 1,905 +21 -259 +32 +73 +71 Cashflow Tax and Invest. WCR Other Dividends Currencies Other, non financial operations operating Debt end- expense Debt June 2017 2018 Half-year 2018 Sales and Results 47
Slide 48: Debt ratios at June 30
Debt ratios at June 30 Net debt-to-equity 0,5 0,5 0,4 0,4 0,4 1,2 0,2 0,3 1,0 0,1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net debt/adjusted EBITDA* 1,3 1,3 1,1 1,2 1,1 2,7 2,6 0,9 0,4 0,5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 *12 rolling months Half-year 2018 Sales and Results
Slide 49: Outlook
OUTLOOK Half-year 2018 Sales and Results 49
Slide 50: 2018: a two-fold objective
2018: a two-fold objective Continue Groupe SEB’s profitable Continue WMF integration and growth, former consolidation scope accelerate Priorités • Improved consumer business in H2 • Strong EMEA dynamic • Accelerate in Professional Coffee • Buoyant growth in China • Cost control, roll-out of operatin
Slide 51: 2018 guidance
2018 guidance Organic growth in sales > 7%, revised upwards On the basis of current, more challenging exchange rates: confirmation of a growth > 5% in ORfA before WMF one-off PPA Debt reduction: confirmation of a net debt/adjusted EBITDA ratio < 2 at end-2018 Half-year 2018 Sales and Results 51
Slide 52: Glossary
Glossary On a like-for-like basis (LFL) – Organic Net debt – Net indebtedness The amounts and growth rates at constant exchange rates and This term refers to all recurring and non-recurring financial consolidation scope in a given year compared with the debt minus cash and cash equivalents as well a
Slide 53: Contact us
CONTACT US Investor/Analyst relations Groupe SEB Financial Communication and Investor Relations Isabelle Posth Raphaël Hoffstetter iposth@groupeseb.com rhoffstetter@groupeseb.com Tel.: +33 (0) 4 72 18 16 40 comfin@groupeseb.com Media relations Image Sept Caroline Simon Claire Doligez Isabelle Dunoye