Seb Sa · EURONEXT:SK
Seb Sa — Groupe SEB — Q1 2020 Earnings Presentation
37 slides from Seb Sa's earnings presentation, Apr 28, 2020
Slide 1: 2020 First-Quarter Sales and Financial Data
2020 FIRST-QUARTER SALES AND FINANCIAL DATA April 28, 2020 Listen to the audiocast (available on April 28 at 9:00 pm), click here
Slide 2: Disclaimer
2020 FIRST-QUARTER SALES AND FINANCIAL DATA DISCLAIMER Some of the statements contained in this document may be forward- looking statements concerning Groupe SEB's financial position, results, businesses, strategy or projects. Groupe SEB considers that such statements are based on reasonable assumpt
Slide 3: Contents
CONTENTS 1. Covid-19: general context 2. Q1 sales review 3. Q1 ORFA – Debt / Liquidity 4. Action plan and outlook 5. Appendix 3 28/04/2020 First-quarter sales and financial data
Slide 4: Covid-19: General Context
01 COVID-19: GENERAL CONTEXT
Slide 5: General overview: an unprecedented health and economic crisis
General overview: an unprecedented health and economic crisis ▪ Fast spreading epidemic, including 2 “phases” at this stage ➔ China (Asia) / Rest of world + ▪ Massive lockdown – shutdowns: factories, offices, public spaces, retail, restaurants, hotels… ➔ All areas of global economy heavily impacted
Slide 6: Groupe SEB's top priorities
Groupe SEB’s top priorities Liquidity Business continuation Health & safety preservation and Gradual activity plan and service to c c of employees cost reduction resumption customers Group: 33 Covid-sick people* action plans *at April 27. 6 28/04/2020 First-quarter sales and financial data
Slide 7: Outbreak and spread of the crisis
Outbreak and spread of the crisis Lockdown Jan 20 1 factory closed Progressive resumption CHINA Most factories closed Restart of business of activity OTHER ASIA Business overall OK except for a few weeks in South Korea and Japan Lockdown starting in Italy, then spreading Slow EMEA Most factories clo
Slide 8: Groupe SEB's industrial sites: situation at end-April
Groupe SEB’s industrial sites: situation at end-April GERMANY FRANCE 7 sites 6/1 CHINA 12 sites 7 sites 1 / 11 RUSSIA St Petersburg VIETNAM CZECH REPUBLIC Domazlice 4 sites Zuchwill SWITZERLAND USA Omegna ITALY Canonsburg Montebello EGYPT Borg El Arab End-Feb Baddi Closed Open INDIA Rionegro 8 34 Ca
Slide 9: Customers' situation
Customers’ situation 2019 sales breakdown by distribution channel Current situation B2B Group Retail 11% Mass retail ◼ E-commerce and mass retail 6% 18% E- ➔ 42 % of sales Traditional & others commerce 25% 24% Specialists 16% ◼ Specialists, trad. stores, B2B… ➔ 58% of sales Based on 2019 Annual Fina
Slide 10: Our Chinese experience
Our Chinese experience SDA + Cookware offtake momentum ▪ Offline: slow improvement • Re-opened stores with shortened opening hours • In-store traffic still low especially for electro-specialists • Shortages in cookware (Wuhan plant longer shutdown) 0 Jan 1-19 Jan 20-Feb 16 Feb 17-28 Feb 29-Mar 13 Ma
Slide 11: Q1 Sales Review
02 Q1 SALES REVIEW 11 28/04/2020 First-quarter sales and financial data
Slide 12: Revenue by business activity
Revenue by business activity Revenue €1,454m -15.6% -16.5% LFL Consumer Professional €1,272m €182m -17.4% -17.3% -0.7% -9.7% LFL LFL 12 28/04/2020 First-quarter sales and financial data
Slide 13: Analysis of Q1 2020 sales
Analysis of Q1 2020 sales In €m 1,722 -284 1,454 +3 +13 Organic Currency Scope growth effect -16.5% +0.1% +0.8% -15.6% Q1 2019 Q1 2020 13 28/04/2020 First-quarter sales and financial data
Slide 14: Q1 2020 revenue by region
Q1 2020 revenue by region In €m March Q1 2019 Q1 2020 As reported Q1 LFL LFL EMEA 711 641 - 9,9% - 10,4% - 25,5% Western Europe 519 443 - 14,6% - 14,7% - 33,4% Other countries 192 198 + 2,6% + 1,0% - 3,7% AMERICAS 169 149 - 11,7% - 8,6% - 23,1% North America 103 97 - 5,2% - 7,2% - 22,7% South Americ
Slide 15: Western Europe
Western Europe Reminder Q1 sales / €m 2019 2020 REPORTED LFL LFL 2019 Western Europe 519 443 -14.6% -14.7% +3.0% ▪ Overall business impacted by Covid-19 epidemic spread across Western Europe, yet with various magnitudes. Almost all product categories hit. ▪ France: revenue down ~8% including: • SDA
Slide 16: Other EMEA Countries
Other EMEA Countries Reminder Q1 sales / €m 2019 2020 REPORTED LFL LFL 2019 Other EMEA countries 192 198 +2.6% +1.0% +6.9% ▪ Q1 sales slightly up LFL, with core business (excl. LPs) quite dynamic, at + 7% ▪ Robust growth in Jan-Feb, based on Group’s main growth engines. March activity dropping due t
Slide 17: North America
North America Reminder Q1 sales / €m 2019 2020 REPORTED LFL LFL 2019 North America 103 97 -5.2% -7.2% +3.8% ▪ Q1 reported sales decrease reflecting LFL 7.2% decline due to Covid-19 spread in March and positive FX effects ▪ Mixed performance across the 3 countries ▪ Q1 sales down in the US, LFL • Str
Slide 18: South America
South America Reminder Q1 sales / €m 2019 2020 REPORTED LFL LFL 2019 South America 66 52 -21.9% -10.9% +4.8% ▪ Q1 reported sales drop stemming from depreciation of BRL and COP against € and negative impact of Covid-19 on business in March ▪ Strong hit in Brazil • Mixed activity in Jan-Feb. including
Slide 19: China
China Reminder Q1 sales / €m 2019 2020 REPORTED LFL LFL 2019 China 541 365 -32.6% -32.4% +13.4% ▪ First country hit by Covid-19 mid-January • Drastic confinement and shutdown ➔ Unprecedented downturn in consumption • SDA market more resilient than other industries ▪ Supor Q1 domestic sales down 32%
Slide 20: Other Asian countries
Other Asian countries Reminder Q1 sales / €m 2019 2020 REPORTED LFL LFL 2019 Other Asian countries 118 117 -0.2% -1.5% +2.5% ▪ Reported sales are flat but mixed picture across countries ▪ Japan: stable LFL sales in Q1 • No general shutdown, most stores open, nevertheless with a strong traffic decrea
Slide 21: Professional
Professional Reminder Q1 sales / €m 2019 2020 REPORTED LFL LFL 2019 Professional 183 182 -0.7% -9.7% +24.4% ▪ Q1 sales flat as reported but down 9.7% LFL • FX and scope effect (Wilbur Curtis for 1 month, Krampouz for 3 months) • Positive start to the year (Jan-Feb) ▪ LFL drop in sales, for both Prof
Slide 22: Q1 ORFA Debt / Liquidity
03 Q1 ORFA DEBT / LIQUIDITY 22 28/04/2020 First-quarter sales and financial data
Slide 23: ORfA and net debt
ORfA and net debt Operating Result from Activity €18m vs €138m in Q1 2019 Net debt €1,840m* at 31/03/2020 €1,997 at 31/12/2019 *incl. IFRS 16 debt and others: €389m 23 28/04/2020 First-quarter sales and financial data
Slide 24: Business model based on a c. 1/3 fixed costs weight
Business model based on a c. 1/3 fixed costs weight… Sales ~€7.4bn COGS* ~€4.5bn Purchased RM and goods On an annual basis Direct labor costs Freight costs Other production costs ~70% variable Cost base costs OPEX* ~€2.1bn ~€6.6bn ~30% fixed costs R&D costs Advertising Distribution and administrativ
Slide 25: A stronger operating leverage in H2
… as a consequence, a stronger operating leverage in H2 Q1 Q4 Q1 19% 31% 23% As a reminder, strong seasonality for Q4 Q2 sales with back-end loaded year Sales ORfA 2019 45% 2019 12% ▪ Consequently for ORfA Q2 Q3 22% Q3 ▪ Q1 not representative of FY 24% 24% performance and Q2 as a low point in the ye
Slide 26: Healthy and well-balanced financing structure
Healthy and well-balanced financing structure Headroom incl. undrawn 586 syndicated loan 538 Cash & equiv. 500 ▪ Diversified sources of ~€1bn financing (Bonds, ~€1bn Schuldschein, ORNAE, NEU MTN, NEU CP…) 274 283 Headroom inc. undrawn ▪ No financial covenants syndicated loan 128 ▪ Significant financ
Slide 27: Action Plan and Outlook
+———— ACTION PLAN AND OUTLOOK
Slide 28: Counter-measures, including cost-reduction actions
Counter-measures, including cost-reduction actions… ▪ Payroll flexibility measures: short-time working, paid leave, contract suspensions and reduction of temporary staff, recruitment freeze… ▪ Growth drivers adapted to markets’ current situation ▪ Systematic cuts in non-essential expenses (travel, e
Slide 29: Giving priority to cash generation
… and giving priority to cash generation ▪ Strict control of cash flow including working capital • Special attention on relationship with fragilized suppliers • Strengthened monitoring of receivables ▪ No social tax deferral nor government guaranteed loan requested ▪ Dividend cut: -1/3 vs dividend p
Slide 30: 2020 Outlook
2020 Outlook 1. Reminder: Q1 and Q2 not representative of full year ORfA, as always said 2. …All the more due to massive hit from Covid-19 in H1 (which is usually a lower activity period) 3. Expected performance for Q2 ➔ Estimated revenue loss (as of April 28): €450 to €500m ➔ ORfA most probably neg
Slide 31: Looking ahead… Groupe SEB
Looking ahead… Groupe SEB: ▪ Is adapting to the short term imperatives ▪ Is getting ready for the resumption of activity ▪ Stays focused on its long term goals ▪ Is confident in its solid and well-balanced business model 31 28/04/2020 First-quarter sales and financial data
Slide 32: Appendix
SEB 05 APPENDIX
Slide 33: Q1 2020 currency impact on sales
Q1 2020 currency impact on sales: + €3m In €m 5 4 3 2 1 0 -1 -2 -3 -4 -5 KRW CHF RUB UAH BRL EGP ARS CNY TRY OTHERS COP JPY USD 33 28/04/2020 First-quarter sales and financial data
Slide 34: Q1 2020 sales by region
Q1 2020 sales by region Other Asia Emerging countries Mature countries 9% 48% 52% Western Europe 35% China 29% €1,454m -16.5% LFL South America 4% Other EMEA 16% North America 8% 34 28/04/2020 First-quarter sales and financial data
Slide 35: Glossary
Glossary On a like-for-like basis (LFL) – Organic Net debt The amounts and growth rates at constant exchange rates and consolidation scope in a This term refers to all recurring and non-recurring financial debt minus cash and cash given year compared with the previous year are calculated: equivalent
Slide 36: Contacts
Investor/Analyst relations Media Relations Groupe SEB Groupe SEB Financial Communication Corporate Communication Dept and Investor Relations Dpt C O N TA C T S Cathy Pianon Isabelle Posth Caroline Philips Raphaël Hoffstetter cpianon@groupeseb.com iposth@groupeseb.com cphilips@groupeseb.com rhoffstet
Slide 37: Agenda: next key dates
Next key dates AGENDA May 19 | 3:00pm 2020 Annual General Meeting – Closed door July 23 | before market opens H1 2020 sales and results October 26 | after market closes 9-month 2020 sales and financial data 37 28/04/2020 First-quarter sales and financial data