Paris, 19 October 2016
FURTHER DOUBLE-DIGIT GROWTH IN
Q3 2016: GROSS PROFIT UP 11.4% LFL
Growth trend remains
robust
-
Q3 20161 gross profit
of €19.13 M, up 12.5% on a restated basis2 and
11.4% LFL3.
-
9-month 20161 gross profit
of €60.4 M, up 15% on a restated basis and 14.1% LFL.
-
Another strong surge in growth for digital
businesses: Q3 up 16.5% LFL, 9-month YTD up 28.1% LFL.
-
Sharp growth continued in France: Q3 up 13.2%
LFL, 9-month YTD up 17.4% LFL.
-
Exclusive negotiations under way to invest in a
stake in WakeOnWeb in France.
-
Growth trend remains strong in Belgium: Q3 up
7.5% LFL, 9-month YTD up 7.5% LFL.
Strategic reorientation outside
France
-
Sale of businesses in the United Kingdom
("MRM"), which represented 3.9% of the Group's H1 2016 gross
profit.
-
Exclusive negotiations under way to sell the
joint venture POS Media in Central Europe.
2016 Business guidance
raised
-
Growth in gross profit of more than 11%
LFL.
-
Growth in headline PBIT before performance share
plans4 of equal to
or greater than 25%, growth in operating margin before performance
share plans4 of equal to
or greater than 250 bp (>=17.3%).
Gross profit (in € m) |
20162 |
2015
restated2 |
2015
LFL3 |
2016/2015
Change restated2 |
2016 / 2015
LFL3
change |
Q1 |
19.51 |
16.99 |
17.05 |
+14.9% |
+14.4% |
Q2 |
21.76 |
18.50 |
18.68 |
+17.6% |
+16.5% |
Q31 |
19.13 |
17.01 |
17.18 |
+12.5% |
+11.4% |
9-month total1 |
60.40 |
52.50 |
52.91 |
+15.0% |
+14.1% |
1 Unaudited
data.
2 In
application of IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations, the businesses in the United Kingdom were
presented as discontinued operations as of the third quarter of
2016. For reasons of consistency, the data reported for 2015 and
the first half of 2016 have been restated to account for the impact
of the UK businesses.
3 LFL: On a
like-for-like basis and at constant exchange rates.
4 Headline PBIT
before performance share plans: Profit before interest, tax and
restructuring costs and before the cost of the new performance
share plans. Operating margin before performance share plans:
Headline PBIT before performance share plans/gross profit.
Didier Chabassieu, Chairman of the
Management Board, stated, "HighCo has turned in a
robust third quarter in 2016, driven by growth in France and
Belgium, where our digital strategy has produced strong results
over the past three years. In line with this strategy, we have
decided to sell two of our subsidiaries, one in the United Kingdom
and the other in Central Europe. These entities are significantly
behind in digitising their offer. As such their growth and
profitability levels have come in below the Group's expectations
for the past several quarters. This results in a divergence in
strategy with their management teams. However, given the Group's
strong performance in the third quarter and the deconsolidation of
these subsidiaries, we have raised our business growth and
profitability targets for 2016."
STRONG SURGE IN
GROWTH CONTINUED FOR DIGITAL BUSINESSES IN Q3 2016: UP 16.5%
LFL
With
like-for-like (LFL) growth of 16.5% in Q3 2016, Digital
has enabled the Group to maintain its double-digit growth. The
share of digital business increased from 43.3% in Q3 2015
(restated for the United Kingdom) to 45.9% in Q3 2016. Offline
businesses continued their strong growth trend, rising 7.4% like
for like over the quarter. As a result, HighCo posted strong
business growth in Q3 2016, up 12.5% on a
restated basis and 11.4% like for like to €19.13 M.
Over the first
nine months of the year, digital businesses grew 28.1% on a
like-for-like basis, and the share of Digital increased from
40.2% at the end of September 2015 (restated for the United
Kingdom) to 45.6% at the end of September 2016. This means that HighCo has met its target of Digital
businesses representing a share of more than 45% of the Group's
total business in 2016 and is on track to reach a share of 50%
in 2017. Offline businesses showed like-for-like growth of 4.6%
over the first nine months of the year. The
Group's gross profit amounted to €60.4 M for the first nine
months of 2016, up 15% on a restated basis and 14.1% like for
like.
Driven by Digital, France
continues to show robust growth
France turned in
another excellent performance in Q3 2016, with gross profit of
€13.59 M, up 13.2% like for like, thus accounting for 71% of
the Group's gross profit. This gain was again driven by Digital,
which rose 20.4% like for like in the third quarter, with the
significant expansion in fully digital Drive to Store businesses
(digital coupon issuing, services for click-and-collect and online
retail platforms, social media) and the strong performance of
In-store businesses in Q3.
For the first
nine months of 2016, gross profit totalled €41.55 M in France
and rose 17.4% like for like. Digital businesses grew 32.8%
over the same period, and their share in gross profit reached 54.4%
at the end of September 2016.
WakeOnWeb: Investment in a French
digital technology company
Moving forward in its strategy to
integrate a comprehensive range of targeting and data businesses,
HighCo announces that it has entered into
exclusive negotiations with the founders of WakeOnWeb to invest
in a 40% stake in the share capital. WakeOnWeb is
a French digital service company that designs and develops specific
web applications. It deploys its recognised expertise in the
Symfony framework, operating as a certified partner of the designer
of the Symfony platform, SensioLabs. With WakeOnWeb, HighCo expects
to build synergies, gain new technical expertise and refine its
quality processes and methods in developing its digital tools.
WakeOnWeb is a fast growing company that currently employs
22 people and expects to generate about €1.3 M in revenue
in 2016.
Growth trend remains strong in
Belgium
In Benelux, gross
profit rose 7.5% like for like to €5.38 M in Q3 2016,
representing 28.1% of the Group's gross profit. For the first nine
months of 2016, gross profit totalled €18.09 M in Benelux,
also climbing 7.5% like for like.
STRATEGIC
REORIENTATION OUTSIDE FRANCE
The digital transformation
achieved in France and under way in Belgium over the past three
years has shown results, enabling HighCo to return to strong
organic growth and improve its profitability. Despite the Group's
expectations, its entities in the United Kingdom and Central Europe
have not moved in the same direction. This has led to a stark
difference compared with the financial performance generated in
France and Belgium. To avoid hindering its future performance, the
Group has decided to sell these businesses. However, HighCo plans
to complete the digital transformation initiated in Belgium and
continue developing its fully digital businesses in Italy, launched
in 2015, and in Spain.
Sale of MRM in the United
Kingdom
The Group announces the sale of
its British subsidiary to the local management team. The deal has
just closed to sell all shares in Multi Resource Marketing Holdings
Limited ("MRM"). Acquired by HighCo in 2011, MRM has not met the
targets initially set by the Group, in particular regarding its
digital transformation, resulting in a divergence in strategy
between the subsidiary's local management team and HighCo. With
business still overly focused on domestic clients and not enough on
retailers, the Group has not achieved the anticipated business
synergies. The sale of MRM will provide the opportunity to divest a
subsidiary whose business has been declining for several quarters
and whose profitability has dropped significantly in 2016.
Furthermore, the British government's new legislation concerning
the National Living Wage (NLW) is likely to weigh on MRM's
overheads in the years to come. The impact on attributable net
income is currently estimated at an expense of about
€6.5 M.
Plan to sell POS Media in Central
Europe
The Group announces that it has
also entered into exclusive negotiations to sell POS Media, its
joint venture operating in Central Europe. The deal would involve
selling all shares owned in the Dutch company POS Media BV,
representing 47.55% of its share capital. POS Media was acquired in
2011. Its mainly "paper-driven" businesses have not developed in
line with HighCo's expectations, due in part to the complex
geopolitical climate in Central Europe over the past two years
(Russia, Turkey and Ukraine). The sale of POS Media, which has been
accounted for using the equity method since 2014, would provide the
opportunity to deconsolidate a joint venture with an uncertain
outlook for its business growth and profitability and in need of
cash flow. At this stage, the Group does not expect this sale to
have an impact on attributable net income for 2016.
2016 BUSINESS
GUIDANCE RAISED
Given the combined factors
including the sale of MRM, the better-than-expected performance in
Q3 and positive outlook for Q4, the Group has further raised its
annual business guidance and revised its other guidance figures for
2016:
-
Growth in 2016 gross profit revised from more
than 8% to more than 11%5 LFL;
-
Growth in headline PBIT before performance share
plans4 revised from
equal to or more than 20% to equal to or more than 25%5;
-
Increase in operating margin before performance
share plans4 revised from
equal to or more than 120 bp (>=16%) to equal to or more
than 250 bp5
(>=17.3%).
5 In
application of IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations, the businesses in the United Kingdom will
be reported under discontinued operations and presented as a single
item in the 2016 income statement, Net income from assets held for
sale or discontinued operations. For reasons of consistency, the
data reported for 2015, especially headline PBIT and operating
income, will be restated to account for the impact of the UK
businesses. The UK businesses are not included in the revised
guidance figures for 2016.
About HighCo
Since its creation, HighCo has placed innovation at the
heart of its values, offering its clients - brands and retailers -
Intelligent Marketing Solutions to influence shopper behaviour with
the right deal, in the right place, at the right time and on the
right channel.
Listed in compartment C of
Euronext Paris, HighCo has more than 700 employees and since
2010 has been included in the Gaia Index, a selection of
70 responsible Small and Mid Caps.
Your contacts
Cécile
Collina-Hue
Géraldine Myoux
Deputy Managing
Director
Press Relations
+33 1 77 75 65
06
+33 1 77 75 64 67
comfi@highco.com
g.myoux@highco.com
Upcoming events
Publication takes place after market close.
Q4 2016 Gross Profit: Tuesday, 24
January 2017
HighCo is a
component stock of the indices CAC® Small (CACS), CAC®
Mid&Small (CACMS) and CAC® All-Tradable (CACT).
ISIN: FR0000054231
Reuters: HIGH.PA
Bloomberg: HCO FP
For further financial information and press
releases, go to www.highco.com
This
English translation is for the convenience of English-speaking
readers. Consequently, the translation may not be relied upon to
sustain any legal claim, nor should it be used as the basis of any
legal opinion. HighCo expressly disclaims all liability for any
inaccuracy herein.
HIGHCO : Q3 GROSS PROFIT
2016
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announcement is distributed by Nasdaq Corporate Solutions on behalf
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The issuer of this announcement warrants that they are solely
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Source: HIGHCO via Globenewswire
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