Seb Sa · EURONEXT:SK
Seb Sa — Groupe SEB — FY2019 Earnings Presentation
58 slides from Seb Sa's earnings presentation, Feb 27, 2020
Slide 1: 2019 Full-Year Results
2019 FULL-YEAR RESULTS Paris | February 27, 2020 Follow the webcast of the meeting here or at www.groupeseb.com
Slide 2: Note
2019 FULL-YEAR 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 in commod
Slide 3: Contents
CONTENTS 1. Another great year 2. Good performance 3. A long-term strategy 4. Outlook 5. Appendixes 3 27/02/2020 Full-Year Results
Slide 4: Another Good Year
SEB ANOTHER GOOD YEAR Les
Slide 5: General environment
General environment ▪ Overall still complicated and volatile environment ➔ Geopolitical, trade and social tensions ▪ Buoyant and resilient industry ▪ More favorable raw material and currency environment ▪ Ongoing changing retail industry ➔ Competitive and promotion-driven climate 5 27/02/2020 Full-Y
Slide 6: Another year of dynamic growth
Another year of dynamic growth Sales €7,354m +8.0% +5.8% LFL Professional Consumer €799m €6,555m +25.9% +12.1% LFL +6.1% +5.2% LFL 6 27/02/2020 Full-Year Results
Slide 7: 2019 financial key figures
…and good performance 2019 financial key figures ORfA €740m Sales +6.5% +4.7% LFL Net debt €7,354m €1,997m +8.0% +5.8% LFL o/w IFRS 16 debt: €334m Net profit €380m -9.4% Dividend proposed at the 2020 AGM €2.26, +5.6% vs. 2018 dividend in respect of FY 2019 7 27/02/2020 Full-Year Results
Slide 8: Continued development in Professional business
Continued development in Professional business Annual sales: ~€20m Annual sales: ~€80m 8 27/02/2020 Full-Year Results
Slide 9: SEB Alliance, a catalyst to our innovation strategy
SEB Alliance, a catalyst to our innovation strategy Since 2011 15 direct minority invesments - 2 majority investments A global active assessment tool in disruptive technologies… 6 partner funds …bolstered by cooperation with funds, leaders in their fields ➔ International and sector-wide coverage ➔ T
Slide 10: Good Performance
02 GOOD PERFORMANCE
Slide 11: Sales
1 Sales 2 Results 11 27/02/2020 Full-Year Results
Slide 12: Development in sales 2018 → 2019
Development in sales 2018 → 2019 In €m 7,354 +71 +75 +396 6,812 Organic Currency growth effect Scope +5.8% +1.0% + 1.2% +8.0% 2018 2019 12 27/02/2020 Full-Year Results
Slide 13: Currency impact on 2019 sales
Currency impact on 2019 sales In €m 35 30 +€71m 25 Q1: +€13m Q2: +€2m 20 Q3: +€30m Q4: +€26m 15 10 5 0 -5 -10 -15 CNY EGP ARS UAH RUB CHF CAD BRL TRY THB COP MXN OTHERS JPY USD 13 27/02/2020 Full-Year Results
Slide 14: Breakdown of 2019 sales by region
Breakdown of 2019 sales by region Other Asia 8% Western Europe 38% China 25% €7,354m +5.8% LFL South America 4% Other EMEA 13% North America 12% 14 27/02/2020 Full-Year Results
Slide 15: Growth in all product lines
+26% Growth in all product lines 20% Professional as reported Home care LKA 15% Home comfort Electrical cooking 10% Professional LFL Personal care Cookware Food Beverage Linen preparation 5% care 2019 sales growth LFL 0% 15 27/02/2020 Full-Year Results *LKA = Large Kitchen Appliances
Slide 16: Consumer
Consumer 16 27/02/2020 Full-Year Results
Slide 17: Growth in all regions
Growth in all regions Other EMEA +12.4% North America Western Europe +2.9% +0.3% China +12.2% South America Other Asia +0.7% +1.2% AMERICAS EMEA ASIA LFL +2.1% +3.3% +9.4% 17 27/02/2020 Full-Year Results
Slide 18: Top countries
Top 20 countries TOP 10 COUNTRIES SPAIN RUSSIA CHINA Colombia ITALY JAPAN BRAZIL* Mexico Poland Belgium Ukraine Turkey Canada FRANCE USA Austria Netherlands GERMANY SOUTH KOREA United Kingdom Consumer sales LFL *Excl. tax receivable (PIS COFINS) impact 18 27/02/2020 Full-Year Results
Slide 19: Western Europe
Western Europe Sales Organic growth €2,442m +0.3% FRANCE ▪ Stable annual sales ▪ Performing well in cookware, more difficult in SDA ▪ Year-end impacted by strikes and order cancellations/ postponements GERMANY ▪ Bringing Groupe SEB Deutschland’s sales practices into compliance OTHER COUNTRIES Italy,
Slide 20: Other EMEA countries
Other EMEA countries Sales Organic growth €897m +12.4% Robust growth on buoyant markets 3 strong drivers in the region ▪ Product dynamics ▪ Offline and online marketing activation ▪ Group Retail roll-out RUSSIA and CENTRAL EUROPE ▪ Strengthened leadership TURKEY and MIDDLE EAST ▪ Recovery 20 27/02/2
Slide 21: North America
North America Sales Organic growth €589m +2.9% USA ▪ Continued difficulties in traditional retail ▪ Market share gains in Cookware and Linen care • ➔ T-Fal and Rowenta are market leaders CANADA ▪ Challenging market environment ▪ Specific deals driving growth MEXICO ▪ Brisk growth in annual sales ▪ R
Slide 22: South America
South America Sales Organic growth €326m +0.7% BRAZIL ▪ Sales 2019 +10% LFL excl. PIS-COFINS* ▪ Good performance in fans and Dolce Gusto ▪ Expansion of new categories: oil-less fryers, grills… COLOMBIA ▪ Growth propelled by fans and cookware, oil-less fryers roll-out ▪ Remarkable improvement in indu
Slide 23: China
China Sales Organic growth €1,762m +12.2% Sustained growth in Supor’s core business against high comps, fueled by e-commerce COOKWARE ▪ Flagship products: woks, pots and isothermal mugs SMALL DOMESTIC APPLIANCES ▪ Growth nurtured by electrical cooking and new categories (garment steamers, vacuum cle
Slide 24: Other Asian countries
Other Asian countries Sales Organic growth €539m +1.2% JAPAN ▪ Flagship product dynamics (cookware and electric kettles) driving continued firm growth ▪ Encouraging development in new categories ▪ Confirmed success of Group Retail SOUTH KOREA ▪ Declining market, annual sales down LFL OTHER COUNTRIES
Slide 25: Professional
Professional 25 27/02/2020 Full-Year Results
Slide 26: Professional
Professional Sales Organic growth €799m +12.1% PROFESSIONAL COFFEE ▪ Confirmed fast development ▪ Sustained core business and major contracts ▪ Acquisition and integration of Wilbur Curtis into SEB Professional 26 27/02/2020 Full-Year Results
Slide 27: Results
1 Sales 2 Results 27 27/02/2020 Full-Year Results
Slide 28: Operating Result from Activity (ORfA)
Operating Result from Activity (ORfA) In €m 2018 2019 Δ Δ LFL Sales 6,812 7,354 +8.0% +5.8% ORfA 695 740 +6.5% +4.7% Op. margin 10.2% 10.1% -0.1% -0.1% 28 27/02/2020 Full-Year Results
Slide 29: ORfA bridge
ORfA bridge In €m +8 -5 +141 -37 -30 -45 727 740 +18 -5 695 Volumes Price COGS Growth Admin PIS-COFINS Currencies Scope Mix drivers & comm. GSEB D & expenses method effect 2018 2019 2019 LFL 29 27/02/2020 Full-Year Results
Slide 30: Growth drivers
Growth drivers In €m 2018 2019 Δ LFL % Innovation 247 267 +7.7% Advertising and marketing 431 461 +5.9% Total growth drivers 678 728 +6.5% Innovation: gross amount, before French research tax credit and capitalized costs 30 27/02/2020 Full-Year Results
Slide 31: Operating profit
Operating profit 2018 2019 Δ% In €m Operating Result from Activity (ORfA) 695 740 +6.5% Discretionary and non-discretionary (34) (37) profit-sharing* Other operating income and expense (36) (82) Operating profit 625 621 -0.8% * *Including 2019 employee share ownership plan expenses for €2m 31 27/02/
Slide 32: Net profit
Net profit In €m 2018 2019 Δ% Operating profit 625 621 -0.8% Net financial expense (32) (61) Tax (131) (131) Non-controlling interests (43) (49) Net profit 419 380 -9.4% 32 27/02/2020 Full-Year Results
Slide 33: Simplified balance sheet
Simplified balance sheet 31/12/2018 31/12/2019 In €m Tangible fixed assets 3,578 4,263 Operating WCR 1,120 1,215 Total assets to be financed 4,698 5,478 Equity 2,307 2,628 Provisions 383 423 Other current assets and liabilities 430 430 Net debt 1,578 1,997* Total financing 4,698 5,478 *o/w €334m IFR
Slide 34: Change in net debt
Change in net debt Free cash flow: €367m In €m + 137 -1 1 997 1 940 + 362 - 896 + 288 + 183 - 32 1 578 + 303 + 75 IFRS 16 debt Cash Chg. Capex. Taxes and Chg. Acquisitions Dividends Currencies opening of flow Operating interest Non Operating and other non accounts WCR WCR operating Debt end- Debt De
Slide 35: Working capital requirement evolution over 10 years
Working Capital requirement evolution over 10 years 25.6% 24.9% 24.0% 22.7% 22.4% 21.9% 21.0% 18.8% 18.4% 16.4% 16.5% 09 10 11 12 13 14 15 16 17 18 19 WCR as % of sales 35 27/02/2020 Full-Year Results
Slide 36: Financial ratios
Financial ratios 2.8 2.4 1.9 2.1 1.3 1.2 1.1 1.6 1.0 1.0 excl. IFRS 16 0.9 and 2019 acquisitions 0.6 0.7 0.6 0.5 0.4 0.3 0.3 0.3 0.8 0.2 0.1 0.2 09 10 11 12 13 14 15 16 17 18 19 Net debt/adjusted EBITDA Net debt-to-equity Ratios at 31/12 36 27/02/2020 Full-Year Results
Slide 37: A Long-Term Strategy
03 A LONG-TERM STRATEGY
Slide 38: Relevance of our balanced model
Relevance of our balanced model 1 GEOGRAPHIES 2 CATEGORIES MULTI 3 BRANDS 4 CHANNELS 38 27/02/2020 Full-Year Results
Slide 39: A global and balanced presence...
Balanced sales breakdown A global and balanced presence... 1 Unrivalled global footprint, strong local positions Emerging markets Mature markets 45% ▪ ¾ of sales in countries where we are #1 or #2 55% ▪ Continued product offering expansion in markets Acquisitions as an additional catalyst Long-term
Slide 40: ...and accelerating growth across new economies
...and accelerating growth across new economies 1 Increased critical mass across countries ▪ 20th country in 2019: Sales ~ €60m vs. ~ €35m in 2016 Pool of fast-growing countries ▪ EMEA: Slovakia, Ukraine, Kazakhstan, Egypt… ▪ Asia: Thailand, Malaysia ▪ Americas: Mexico, Colombia, … 40 27/02/2020 Ful
Slide 41: A presence on numerous product categories...
A presence on numerous product 2019 sales by category categories... Professional Kitchen Electrics 2 ~10% Global leader in Cookware, Kitchen Electrics and Linen care Home and ~40% Personal ~20% Care Growing steadily in all Consumer categories ~30% Global leader in Professional Coffee (automatic espr
Slide 42: ...and a capacity to reinvent ourselves constantly
Versatile Vacuum Cleaners ...and a capacity to reinvent ourselves +€100m constantly 2 Garment steamers Sales ≥€100m Mugs x2 x4 Creating new product opportunities by leveraging: ▪ Technological developments and consumer trends ▪ Our innovation capabilities ▪ Targeted external growth acquisitions x2 F
Slide 43: A unique brand portfolio...
A unique brand portfolio... 3 Strong, diversified and complementary brands ▪ Consumer, global and regional ▪ Premium ▪ Professional Organized on platforms ➔ Coordination, dissemination, consistency Responsible and inspiring brands 43 27/02/2020 Full-Year Results
Slide 44: ...and strong local roots
...and strong local roots 3 Emblematic local brands appealing to consumers in their day-to-day lives for 3 generations ▪ Heritage and credibility Supported by local brand ambassadors ▪ Chefs, influencers, communities of consumers, etc. Stakeholders in society: ▪ Imusa: “Tinteros Day” in Colombia ▪ S
Slide 45: A multi-channel approach...
Sales by distribution channel A multi-channel approach... Professional Mass retail Others 4 Group Retail Network synergies Specialists ▪ Accessing all consumers Traditional ▪ Adapting to local characteristics E-Commerce Long-term partnerships with retailers ▪ Execution, category management, merchand
Slide 46: ...and an increased proximity with end-consumers
Digital share in media investment ...and an increased proximity with end-consumers ~50% 4 x2 Targeted digital approaches 2016 2019 ▪ E-Commerce Traffic on Group websites ▪ Digital investments ▪ Direct relationship with Consumers (CRM) ▪ Communities & apps +79% 2016 2019 Direct approaches ▪ Group Ret
Slide 47: A consumer in constant transformation
A consumer in constant transformation… Health New Simplification & Wellness uses Commitment Digitization Ease of use, Healthy eating Personalized and A quest for meaning, E-commerce, versatility and and emphasizing multicultural naturalness, and connections and time saved home-made trend experience
Slide 48: Outlook
04 OUTLOOK
Slide 49: Covid-19: current status
Covid-19 : current status Top priority given to employees’ health protection INDUSTRY ▪ 6 out of our 7 plants restarted production ➔ Increasing to reach full production capacity by the end of March ➔ Wuhan: lock-down lifted mid-March at best and transfer of most urgent productions to other Supor sit
Slide 50: Groupe SEB: 2020 context
Groupe SEB: 2020 context Uncertain over environment and Covid-19 related issues Higher FX volatility expected compared to 2019 More favorable raw material context at this stage ➔ Lower performances expected in Q1 ▪ Covid-19 impacts as from February ▪ No major impact on our supply chain at this stage
Slide 51: Appendix
05 APPENDIX
Slide 52: Organic sales growth per quarter
Organic sales growth per quarter 2017 2018 2019 In % +9.2% +7.8% +5.8% 12 11.5 10 8.6 8.8 8.5 8.4 8 7.7 8.4 8.2 6 7.4 7.3 7.8 4 2.3% 2 exc. PIS COFINS impact 2017 2018 2019 0.9 0 Q1 Q2 Q3 Q4 52 27/02/2020 Full-Year Results
Slide 53: IFRS 16 implementation - Impacts in 2019
IFRS 16 implementation - Impacts in 2019 GROUPE SEB Impacts on: 1,300 contracts Net debt Stores +€334m as of December 31, 2019 Adjusted EBITDA ➔ No cash impact Offices +€96m ORfA Warehouses +€9m Net Income Vehicles -€6m 53 27/02/2020 Full-Year Results
Slide 54: 2019 sales by region
2019 sales by region In €m, unaudited figures As Q4 2019 2018 2019 2019 LFL reported LFL EMEA 3,223 3,339 +3.6% +3.3% -1.1% Western Europe 2,430 2,442 +0.5% +0.3% -4.8% Other countries 793 897 +13.1% +12.4% +10.7% AMERICAS 887 915 +3.2% +2.1% -9.8% North America 547 589 +7.8% +2.9% -3.8% South Ameri
Slide 55: 2019 Quarterly Sales
2019 Quarterly Sales In €m Q1.. Q2 H1 Q3 9-month Q4 2019 EMEA 711 690 1,401 779 2,180 1,159 3,339 Western Europe 519 515 1,033 553 1,586 856 2,442 Other countries 192 175 368 226 594 303 897 AMERICAS 169 194 362 268 630 285 915 North America 103 121 224 176 400 190 589 South America 66 73 138 92 230
Slide 56: Glossary
Glossary On a like-for-like basis (LFL) – Organic The amounts and growth rates at constant exchange rates and consolidation scope in a given year compared with the previous year are calculated: • using the average exchange rates of the previous year for the period in consideration (year, half-year,
Slide 57: Contacts
Investor/Analyst relations Media Relations Groupe SEB Groupe SEB Financial Communication Corporate Communication Dept and Investor Relations Caroline Philips C O N TA C T S Isabelle Posth cphilips@groupeseb.com Raphaël Hoffstetter Tel: +33 (0) 6 49 82 28 45 iposth@groupeseb.com rhoffstetter@groupese
Slide 58: 2020 key dates
2020 key dates April 28 | after market closes Q1 2020 sales and financial data AGENDA May 19 | 3:00 p.m. Annual general meeting July 23 | before market opens H1 2020 sales and results October 26 | after market closes Nine-month 2020 sales and financial data 58 27/02/2020 Full-Year Results