Smcp Sa · EURONEXT:SMCP
Smcp Sa — FY2023 Earnings Presentation
46 slides from Smcp Sa's earnings presentation, Feb 28, 2024
Slide 1: 2023 Full-Year Results
2023 Full-Year Results February 28th, 2024 Isabelle Guichot, CEO Patricia Huyghues Despointes, CFO
Slide 2: Disclaimer
Disclaimer Certain information contained in this presentation 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 per
Slide 3: Isabelle Guichot, CEO
Isabelle Guichot, CEO 3
Slide 4: FY sales – Sound performance in a particularly challenging macroeconomic environment
FY sales – Sound performance in a particularly challenging macroeconomic environment FY Sales Discount rate Network €1 231m Stabilization 1,730 POS +4% constant fx Strict full-price +47 POS in 2023 +3% organic strategy Almost stable performance in H2 in a particularly challenging environment with
Slide 5: Full-year sales growth driven by APAC, resilience in other regions
Full-year sales growth driven by APAC, resilience in other regions 2023 FY sales organic growth by region FRANCE EMEA AMERICA APAC 0% +3% -3% +13% Sales breakdown by region by brand by channel APAC France Other brands Wholesale 21% 33% 13% Sandro 8% 49% America 14% Retail EMEA Maje 92% 32% 38% 5
Slide 6: Broadly stable Q4 sales and continued network expansion
Broadly stable Q4 sales and continued network expansion in a deteriorated macroeconomic environment Q4 Sales Europe and in particular France impacted by consumption slowdown; China less dynamic than expected €326m US more resilient and positive at constant FX Stable at constant FX Homogeneous
Slide 7: Impact on profitability, financial strength maintained
Impact on profitability, financial strength maintained Mgt gross margin Adj. EBIT 73.8% of sales €79.5m Improvement in H2 6.5% of sales Free Cash-Flow Net debt €14.4m €286m Significant cash Improvement vs LY generation in H2 (23m) 7 7
Slide 8: A year of major achievements in Sustainability
A year of major achievements in Sustainability Sustainalytics rating strong improvement vs 2022 SMCProduct SMCPlanet SMCPeople 59% of FW23 Carbon New made with more footprint strategy D&I Strategy sustainable CDP A- Deployed material SBTi validation Worldwide & products 8
Slide 9: Brand desirability – Creative marketing strategy and windows
Brand desirability – Creative marketing strategy and windows Sandro Harrods takeover Maje 25th anniversary celebration 9
Slide 10: Brand desirability – Creative marketing strategy and collaborations with opinion leaders
Brand desirability – Creative marketing strategy and collaborations with opinion leaders Claudie Pierlot After ski capsule Fursac KOL 10
Slide 11: Q4 key openings - America
Q4 key openings - America Meatpacking Manhattan, New-York, USA Westfield Topanga, California, USA 11
Slide 12: Q4 key openings - APAC
Q4 key openings - APAC TRX, Malaysia Chadstone Melbourne, Australia 12
Slide 13: Q4 key partner openings
Q4 key partner openings Riyadh Park, Saudi Arabia Mercury Tower, Malta Palacio De Hierro, Mexico 13
Slide 14: Recent key digital openings
Recent key digital openings Own websites Germany, Spain, Switzerland, UK and Netherlands and rest of Europe Marketplaces Sandro, Maje and Sandro, Maje and CP Sandro, Maje, CP Claudie Pierlot and Fursac in Spain and Italy 14
Slide 15: SMCP enters India through partnership with Reliance Brands Limited
SMCP enters India through partnership with Reliance Brands Limited India is a high growth potential market Strong development of ceremony wear fostering women business Unique potential for Sandro and Maje with strong appetite for the Parisian fashion style Openings scheduled in H2 2024 in Mu
Slide 16: Patricia Huyghues Despointes, CFO
Patricia Huyghues Despointes, CFO 16
Slide 17: 2023 Sales performance by region
2023 Sales performance by region 2023 Sales by semester • 2023 sales in line with 2022 sales despite high basis of comparison: +5% -4% FRANCE • H2 impacted by persistent inflation, and traffic slowdown especially in December €413m • Positive full-year performance for Sandro and “Other brands” €204m
Slide 18: 2023 Sales performance by region
2023 Sales performance by region 2023 Sales by semester • US sales resilience despite a very challenging environment and after two consecutive years of double-digit growth -4% -2% AMERICA • Sequential improvement in H2 with a positive organic growth in Q4 both in B&M and Digital €173m • Canada back
Slide 19: Gross margin - sequential improvement despite a competitive and promotional environment
Gross margin - sequential improvement despite a competitive and promotional environment … Management Gross margin Key highlights % of sales • Retail GM remains at a very high level 0 pp vs 2022 -0.7 pp • Improvement in H2 due to rigorous full-price -1.3 pp strategy • In-season discount rate maintain
Slide 20: … and acceleration of the savings plan throughout the year…
… and acceleration of the savings plan throughout the year… Store costs SG&A OPEX Evolution vs 2022 Evolution vs 2022 Evolution vs 2022 +11% +9% +10% +5% +3% +0% H1 2023 H2 2023 H1 2023 H2 2023 H1 2023 H2 2023 • Inflation impacting rents and staff costs • More savings delivered than initially planne
Slide 21: … leading to an adjusted EBIT improvement in H2
… leading to an adjusted EBIT improvement in H2 Adjusted EBIT margin Key highlights % of sales • Improvement of EBIT margin by +1 pp in H2 vs H1 +1.0pp • OPEX deleveraging coming mostly from under-absorption of store costs, while SG&A 9.2% weight remains well contained thanks to 6.5% 6.0% 7.0% savin
Slide 22: Net income of €11m; €37m excluding non-cash impacts
Net income of €11m; €37m excluding non-cash impacts Net income bridge vs 2022 In €m Key highlights Financial results impacted by interest rates increase 2023 other non-recurring expenses (-€26m, -€14m vs 2022) include impairment of stores (and, to a lower 51 +6 extent, goodwill) with no impact o
Slide 23: Improvement of cash generation in H2
Improvement of cash generation in H2 Inventories Increase in working capital CAPEX In €m In €m In €m -3% % of sales 3.7% 4.5% 292 282 56 45 4 45 2022 2023 2022 2023 2022 2023 Free Cash flow In €m 34 23 14 H1 23 2022 2023 -9 H2 23 23
Slide 24: Year-on-year decrease of Net Financial Debt thanks to FCF generation in H2
Year-on-year decrease of Net Financial Debt thanks to FCF generation in H2 Net debt Dec 31, Dec 31, New maturity In €m in €m 2022 2023 date 1.9x 2.5x* Term Loan 154 99 May 2026 RCF (€200m) - 25 May 2026 State Guaranteed loans 180 161 June 2026-27 -€20m Neu CP 25 25 306 Overdraft 2 17 293 286 Other d
Slide 25: 2024 outlook and conclusion
eee 2024 outlook and conclusion
Slide 26: After a tough 2023, SMCP will accelerate its mid-term action plan
After a tough 2023, SMCP will accelerate its mid-term action plan to foster growth and protect profitability with 4 key priorities Reignite growth and Improve efficiency gain market shares Mitigate risk Protect profit, cash across geographies and liquidity 26
Slide 27: Reignite growth and gain market shares
Reignite growth and gain market shares Work on brand desirability and constant Boost digital opportunities brand relevance and positioning Boost innovation Seize new Ensure creative Address local in products and opportunities and momentum specificities fabrics services Sharpen image and New platform
Slide 28: Mitigate risks across geographies
Mitigate risks across geographies Review our network by geography Close dilutive stores across geographies China network resizing to adapt to new market conditions (15% of the network closed by 2024) Assess our presence or challenge our business model in low contributive countries (Nordics) Ac
Slide 29: Improve efficiency
Improve efficiency Be more efficient in inventory management Review of cost structure and organization across our portfolio of brands Controlled number of SKUs / Tracking low productive SKU Go deeper in mutualizing processes across our portfolio of brands Tighter buying Perform a thorough co
Slide 30: Protect profit, cash flow and liquidity
Protect profit, cash flow and liquidity Continue the focus Prioritize the most productive on OPEX control investments to boost sales/sqm From a one-off approach to recurrent savings Continue OPEX monitoring according to market Focus investments on most productive channels context (corners) Str
Slide 31: Conclusion
Conclusion A management team fully committed to deliver the action plan combining significant savings and new development opportunities o Initial benefits expected in 2024 with full effect from 2025 o Update on mid-term plan will be provided during next publication (end of April) A tough context
Slide 32: Financial Agenda
Financial Agenda 32
Slide 33: Next financial publications and events
Next financial publications and events April 25, 2024 2024 Q1 Sales June 6, 2024 Annual Shareholders Meeting July 25, 2024 2024 H1 Results 33 33 33
Slide 34: Appendix
Appendix
Slide 35: Quarterly net sales by region and by brand
Quarterly net sales by region and by brand In €m Q1-22 Q1-23 Reported % Organic % Q2-22 Q2-23 Reported % Organic % Q3-22 Q3-23 Reported % Organic % Q4-22 Q4-23 Reported % Organic % FY-22 FY-23 Reported % Organic % France 93,7 106,0 +13,1% +13,1% 101,0 98,0 -3,0% -3,0% 99,1 97,5 -1,6% -1,6% 119,8 111
Slide 36: Breakdown of POS
Breakdown of POS Directly operated stores Q4-23 FY-23 Number of DOS 2022 Q1-23 H1-23 Q3-23 2023 variation variation By region France 460 456 463 463 472 +9 +12 EMEA 395 391 399 401 409 +8 +14 America 166 164 167 171 176 +5 +10 APAC 259 305 301 314 316 +2 +57 * By brand Sandro 551 569 575 583 591 +8
Slide 37: Income statement
Income statement €m - IFRS FY-22 FY-23 Sales 1 205,8 1 230,5 2 Gross Margin 769,2 775,2 Other operating income and expenses -242,8 -259,1 Personnel costs -259,9 -279,7 3 Adjusted EBITDA 266,6 236,4 Depreciation and amortization expenses -156,1 -156,9 3 Adjusted EBIT 110,5 79,5 Allocation of LTIP -5,
Slide 38: Balance sheet – Assets (1/2)
Balance sheet – Assets (1/2) As of Dec. 31, As of Dec. 31, BALANCE SHEET - ASSETS (€m) - IFRS 2022 2023 Goodwill 626,3 626,7 Trademarks, other intangible & right-of-use assets 1 128,5 1 120,4 Property, plant and equipment 82,5 83,1 Non-current financial assets 18,7 18,5 Deferred tax assets 35,7 32,0
Slide 39: Balance sheet – Equity and liabilities (2/2)
Balance sheet – Equity and liabilities (2/2) As of Dec. 31, As of Dec. 31, BALANCE SHEET - EQUITY & LIABILITIES (€m) - IFRS 2022 2023 Share capital 83,9 83,9 Share premium 949,6 949,5 Reserves and retained earnings 146,4 151,7 Treasury shares -7,7 -5,0 Total Equity 1 172,1 1 180,1 Non-current lease
Slide 40: Net financial debt
Net financial debt As of Dec. 31, As of Dec. 31, NET FINANCIAL DEBT (€m) 2022 2023 Non current financial debt & other financial liabilities -262,0 -223,6 Bank overdrafts and short-term financial liability -104,2 -113,6 Cash and cash equivalents 73,3 50,9 Net financial debt -292,9 -286,3 LTM adjusted
Slide 41: Other indicators
Other indicators1 €m FY 22 FY 23 Management margin 897,5 907,9 % of sales 74,4% 73,8% Direct costs of points of sales (514,5) (554,5) % of sales -42,7% -45,1% Retail margin 383,0 355,9 % of sales 31,8% 28,9% SG&A (237,4) (247,7) % of sales -19,7% -20,1% IFRS 16 Impacts 120,9 128,2 % of sales 10,0% 1
Slide 42: Adj. EBITDA by brand
Adj. EBITDA by brand €m - IFRS FY-22 FY-23 var Adjusted1 EBITDA 266,6 236,4 -11,3% Sandro 123,2 130,0 5,5% Maje 107,2 100,5 -6,3% Other Brands 15,3 5,9 -61,3% Adjusted1 EBITDA margin 22,1% 19,2% -2,9 pt Sandro 24,8% 21,6% -3,1 pt Maje 26,3% 21,7% -4,6 pt Other Brands 11,4% 3,5% -7,9 pt (1) Before LT
Slide 43: Cash-flow statement
Cash-flow statement CASH FLOW STATEMENT (€m) - IFRS FY-22 FY-23 Adjusted EBIT1 110,5 79,5 D&A 156,1 156,9 Changes in working capital -45,4 -3,7 Income tax expense -12,2 -16,9 Net cash flow from operating activities 208,9 215,8 Capital expenditure -44,5 -55,6 Others - -6,1 Net cash flow from investin
Slide 44: Free cash-flow
Free cash-flow FCF (€m) - IFRS FY-22 FY-23 Adjusted EBIT1 110,5 79,5 D&A 156,1 156,9 Change in working capital -45,4 -3,7 Income tax -12,2 -16,9 Net cash flow from operating activities 208,9 215,8 Capital expenditure -44,5 -55,6 Reimbursement rent lease -120,9 -128,2 Interest & Other Financial -9,4
Slide 45: Working capital
Working capital €m FY-22 FY-23 Inventories and work in progress 291,6 281,8 Trade receivables 62,9 68,2 Trade payables excluding fixed asset suppliers -152,9 -145,6 Operational working capital 201,6 204,4 Other receivables 60,5 59,7 Other payables -84,4 -76,0 Working capital 177,7 188,1 Change in wo
Slide 46: Shareholding structure and voting rights as of December 31st, 2023
Shareholding structure and voting rights as of December 31st, 2023 Capital (%) Voting rights (%) Incl. double voting rights) Trustee2 Trustee2 25.3% 28.8% (24.8%) 1 (28.0%) 1 Free Float Free Float 39.6% 34.6% (38.9) 1 (34.1%) 1 European TopSoho European TopSoho 8.0% 14.0% (7.8%) 1 (13.7%) 1 Founders