HighCo: Q1 2020 Gross Profit
Aix-en-Provence, 22 April 2020
(6.00 p.m.)
HIGHCO: FIRST QUARTER DOWN 10.3% (GP)
IMPACTED BY COVID-19
Update on current situation: Impacts of
the pandemic on Group businesses
Business decline in Q1 2020 despite a
position of slight growth at end-February (GP)
- Q1 20201 gross profit of €20.79 M, down 10.3% on a
reported basis and LFL2.
- Better resilience of digital businesses: Q1 LFL down 7.8%.
- Strong decline in France: Q1 LFL down 13.6%.
- Stability in International business: Q1 LFL up 0.5%.
More pronounced decline expected in Q2
2020 than in Q1
COVID-19: Update of measures taken by
the Group
- Gross cash of €7.8 M at end-March 2020.
- Request granted for a €30 M government-backed loan.
Annual General Meeting of 11 May 2020
under closed session
§
in € M |
2020 |
2019 reported |
2019 LFL2 |
2020/2019 Reported change |
2020/2019 LFL2 change |
Q1 Gross Profit1 |
20.79 |
23.17 |
23.17 |
-10.3% |
-10.3% |
1 Unaudited data.2 Like for like: Based on a
comparable scope and at constant exchange rates (i.e. applying the
average exchange rate over the period to data from the compared
period).
Didier Chabassieu, Chairman of the Management
Board, stated, “After seven consecutive years of growth, and
despite a good start to 2020, the Group’s performance has come to
an abrupt halt with the COVID-19 health crisis. Given this
unprecedented health and economic crisis, I’m proud of our managers
and employees who have shown their great ability to adapt and
respond to change. I’m confident in the organisational structure
implemented that will enable us to continue supporting our clients.
In this year of its 30th anniversary, HighCo has grown into a
healthy group, prepared to overcome this
challenge.”
UPDATE ON CURRENT BUSINESS
ENVIRONMENT
The pandemic is having a significant impact on
the Group’s businesses, mainly due to:
- Closure of large non-food retailers, which account for
approximately 20% of the Group’s business;
- The following factors affecting Group businesses that work
directly or indirectly with large food retailers:
- Decrease in brand promotions, and chain seasonal event
campaigns postponed or cancelled, impacting drive to store
businesses;
- Difficulty for merchandisers to access stores and shutdown of
printing services, limiting in-store media activities;
- Saturation of click & collect and food e-commerce sites,
causing a sharp decline in display media, which limits the better
resilience expected from the Group’s digital businesses;
- Relative good performance of the Group’s mobile businesses
(push SMS, development of mobile apps).
The Group is maintaining the ad hoc
organisational structure implemented at each subsidiary to continue
supporting its clients in the best possible way.
BUSINESS DECLINE IN Q1 2020 DESPITE A
POSITION OF SLIGHT GROWTH AT END-FEBRUARY
After slight business growth in line with the
budget at the beginning of the year, the measures taken to limit
the spread of the COVID-19 pandemic began impacting all the
businesses of our clients, brands and retailers, in March. As a
result, HighCo registered a 27.4% decline in March alone.
This led to a 10.3% drop in the Group’s gross profit to
€20.79 M in Q1 2020.
Digital held up better, posting a
decline limited to 7.8% like for like. The segment was driven by
Mobile businesses, which grew in the first quarter. The
share of Digital in total Group business continued to rise, up from
the reported figure of 53.4% in Q1 2019 to 54.9% in
Q1 2020.
Strong decline in
France
FRANCE |
Gross Profit (in € M) |
2020/2019 Change |
% Total gross profit |
2020 |
2019 reported |
Reported |
LFL |
Q1 |
15.30 |
17.70 |
-13.6% |
-13.6% |
73.6% |
|
|
|
|
|
|
Down 13.6%, France posted gross profit
of €15.3 M in Q1 2020, representing 73.6% of the
Group’s gross profit. Excluding Mobile businesses, which showed
slight growth over the quarter, all other businesses recorded steep
declines in March.
Stability in International
business
INTERNATIONAL |
Gross Profit (in € M) |
2020/2019 Change |
% Total gross profit |
2020 |
2019 reported |
Reported |
LFL |
Q1 |
5.49 |
5.47 |
+0.5% |
+0.5% |
26.4% |
o/w Benelux |
5.18 |
5.18 |
+0.0% |
+0.0% |
24.9% |
International gross profit rose slightly
by 0.5% like for like to €5.49 M in Q1 2020,
representing 26.4% of the Group’s gross profit. In Benelux, gross
profit remained stable at €5.18 M for the quarter, benefiting
from the later implementation of strict lockdown measures (early
April) in Luxembourg. Showing growth of 9.8%, business in Southern
Europe is on an upward trend and accounts for 1.5% of the Group’s
gross profit.
MORE PRONOUNCED DECLINE EXPECTED IN Q2
2020 THAN IN Q1
As anticipated at the end of March and following the extension
of lockdown restrictions, Q2 2020 is expected to be
impacted even harder by government measures and to show a
significant decline both in and outside France.All
business activities will be impacted due to the following
factors:
- Q2 is a period of high seasonal activity (Easter, Mother’s Day
and Father’s Day) for the Group;
- Numerous sports events featuring as a basis for special event
campaigns launched by large retail chains have been postponed
(rescheduling of the UEFA’s Euro 2020 football championship and
Summer Olympic Games for 2021 and of the Tour de France for August
2020, etc.).
COVID-19: UPDATE OF MEASURES TAKEN BY THE
GROUP
Employees
HighCo has taken all necessary measures to limit
the effects of the pandemic on its employees:
- Dissemination/reminder of “social distancing” on various
communication media and stricter health protection measures as of
the first announcements from the authorities;
- Closure of Group sites and rollout of measures to ensure
business continuity (teleworking);
- Group cohesion maintained with the implementation of various
collaborative tools.
Cash position and action
plan
At end-March, gross cash
(excluding operating working capital) totalled €7.8
M (€10.56 M at 31 December 2019).
The Group has taken the following measures in
response to the drop in business activity and to protect its cash
position:
- Use of programmes implemented by the government to reduce the
impact of the situation (postponed payment of taxes and social
security charges, partial unemployment for approximately
35% of payroll, etc.), and, especially, the
request granted by its long-standing banking pool for a
€30 M government-backed loan, with the aim of rapid
repayment;
- Syndicated loan agreement signed in 2015: payment of the
January 2020 instalment (€2.25 M€) and request granted to postpone
repayment of the principal initially scheduled for July 2020 (€2.25
M) and January 2021 (€2.25 M) by six months;
- Savings plan for previously provisioned overhead charges
(spending on sales and communication, etc.);
- Suspension of the share buyback programme;
- Suspension of non-priority investments (CAPEX);
- Proposal to allocate all 2019 earnings to reserves, to be put
forward at the next Annual General Meeting.
2019 ANNUAL FINANCIAL REPORT AND 2020
ANNUAL GENERAL MEETING
HighCo’s 2019 Universal Registration
Document was filed with the Autorité des Marchés
Financiers (French financial markets authority) on 16 April 2020
under No. D20-0300. The document contains the annual financial
report and is available on HighCo’s website (www.highco.com), under
Investors>Annual Report.
Given the current COVID-19 pandemic and
government measures taken to limit gatherings, the Company has
announced that the Annual General Meeting will be held
exceptionally under closed session on 11 May 2020. The
notice of convocation, published in the journal for the publication
of official legal notices (BALO) of 20 April 2020 and on the
Company’s website www.highco.com (under Investors > Annual
General Meetings) explains how to register to participate
in the meeting. The Company also indicates that it has
extended the deadline for submitting written questions, which
shareholders can send by email to comfi@highco.com along with their
certificate of registration, to Wednesday, 6 May 2020 at
6 p.m.
About HighCo
As an expert in data marketing and
communication, HighCo continuously innovates to work with brands
and retailers in meeting the retail challenges of
tomorrow.Listed in compartment C of Euronext
Paris, and eligible for SME equity savings plans (“PEA-PME”),
HighCo has more than 750 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
Cynthia LeratManaging
Director
Press Relations+33 1 77 75 65
06
+33 1 77 75 65
16comfi@highco.com
c.lerat@highco.com
Upcoming
events
Publications take place after market
close.
Q2 and H1 2020 Gross Profit: Thursday 16 July
20202020 Half-year Earnings: Wednesday 26 August 2020Conference
call on 2020 half-year earnings: Thursday 27 August 2020Q3 and
9-month YTD 2020 Gross Profit: Wednesday 14 October 2020Q4 and
FY 2020 Gross Profit: Wednesday 20 January 2021
HighCo is a component stock of the indices CAC®
Small (CACS), CAC® Mid&Small (CACMS) and CAC® All-Tradable
(CACT) and Euronext® Tech Croissance (FRTPR).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 CP T1 2020 MB_VDEF_EN
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