HighCo: Q3 2020 Gross Profit
Aix-en-Provence, 14 October 2020
(6.00 p.m.)
HIGHCO: Q3 2020 BETTER THAN EXPECTED
WITH A DECLINE LIMITED TO 2.1% (GP)
Q3 Business activity higher than
expected (GP)
- Q3 20201 gross profit of €21.83 M, down 2.1% on a reported
basis and LFL2.
- 9-month 20201 gross profit of €62.24 M, a decrease of
11.7% on a reported basis and LFL2.
- Slight growth in Digital: Q3 up 1.1% LFL, 9-month YTD down 6%
LFL.
- Decline in France less steep than expected: Q3 down 4.2% LFL,
9-month YTD down 11.4% LFL.
- Growth in International business: Q3 up 4.7% LFL, 9-month YTD
down 12.5% LFL.
Net cash of €6 M at end-September
2020; €30 M government-backed loan unused
Adjusted guidance
- Business decline expected between 5% and 7% for H2 2020.
- 2020 adjusted operating margin3 forecast at more than
12%.
Gross Profit (in € M) |
2020 |
2019 reported |
2019 LFL2 |
2020/2019 Reported change |
2020/2019 LFL2 change |
Q1 |
20.79 |
23.17 |
23.17 |
-10.3% |
-10.3% |
Q2 |
19.63 |
25.03 |
25.03 |
-21.6% |
-21.6% |
Q31 |
21.83 |
22.28 |
22.28 |
-2.1% |
-2.1% |
9-month total1 |
62.24 |
70.48 |
70.48 |
-11.7% |
-11.7% |
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).3 Adjusted headline profit before interest and tax:
Recurring operating income before restructuring costs and excluding
the cost of performance share plans. Adjusted operating margin:
Adjusted headline PBIT/Gross profit.
Didier Chabassieu, Chairman of the Management
Board, stated, “HighCo posted a better third quarter than expected
in terms of both business activity, thanks to Digital businesses,
and profitability. This good performance has enabled us to raise
our guidance for 2020 operating margin.
In the current health and economic environment,
in which the retail industry is increasingly shifting towards
digital technology, our clients face new challenges. Through its
startup studio HighCo Venturi, the Group is accelerating its
innovation policy around digital promotional solutions.”
Q3 BUSINESS ACTIVITY HIGHER THAN
EXPECTED
With a decline limited to 2.1% in Q3
2020, the Group posted better-than-expected business
activity (Q1 2020: down 10.3%; Q2 2020: down
21.6%) and reached quarterly gross profit of
€21.83 M.
Digital performed well, with
like-for-like growth of 1.1%, mainly driven by click &
collect. The share of Digital in total Group business continued to
rise, up from the reported figure of 56.2% in Q3 2019 to 58%
in Q3 2020.
As a result, HighCo’s businesses were
down 11.7% for the first nine months of 2020, with gross profit of
€62.24 M. At end-September 2020, the share of Digital
in total Group business came in at 58.8%, up from the reported
figure of 55.3% at end-September 2019.
France: Decline less steep than
expected
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% |
Q2 |
15.66 |
18.62 |
-15.9% |
-15.9% |
79.8% |
Q3 |
16.21 |
16.92 |
-4.2% |
-4.2% |
74.3% |
9-month total |
47.16 |
53.25 |
-11.4% |
-11.4% |
75.8% |
Although down 4.2% to €16.21 M,
France posted better-than-expected gross profit in Q3
2020, as the effects of the crisis on activity were offset
by the good performance of digital businesses (up 2.8% in
Q3 2020). For the first nine months of 2020, business
was down 11.4%, with France accounting for 75.8% of the
Group’s gross profit.
International: Growth in Q3
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% |
Q2 |
3.97 |
6.41 |
-38.0% |
-38.0% |
20.2% |
o/w Benelux |
3.73 |
6.14 |
-39.2% |
-39.2% |
19.0% |
Q3 |
5.62 |
5.37 |
+4.7% |
+4.7% |
25.7% |
o/w Benelux |
5.40 |
5.10 |
+5.8% |
+5.8% |
24.7% |
9-month total |
15.09 |
17.24 |
-12.5% |
-12.5% |
24.2% |
o/w Benelux |
14.31 |
16.42 |
-12.9% |
-12.9% |
23.0% |
With gross profit of €5.62 M,
International businesses grew 4.7% in Q3 2020. In
Benelux, after a stable Q1 due to the later implementation
of strict lockdown measures, and a very strong decline in Q2 (down
39.2%) with in-store businesses heavily impacted, business grew
5.8% in Q3 following a “technical” recovery in July.For the
first nine months of the year, International businesses fell 12.5%
to €15.09 M, accounting for 24.2% of the Group’s
gross profit.
Accelerating the digitisation of
promotions
The COVID-19 health and economic situation has
profoundly impacted retail and significantly
influenced the digital transformations under
way.To help its clients navigate these major changes and create
growth drivers for the future, HighCo is accelerating its
innovation policy primarily through its startup studio
HighCo Venturi.The Group has set its priority on
digitising two main promotional tools,
discount coupons and flyers:
- For discount coupons, issuance and clearing remain for the most
part physical. The Group aims to dematerialise
issuance and acquisition (e-commerce websites, mobile apps, digital
wallets), as well as clearing, especially with solutions to log in
to retailer checkout systems;
- As HighCo estimates that €1 billion is invested annually in
France, flyers represent an important tool in the retail industry.
The Group aims to offer a 100% digital alternative to paper
flyers.
CASH POSITION AT END-SEPTEMBER
At end-September 2020, estimated gross
cash, excluding the government-backed loan and operating
working capital, came out around €11 M,
compared with €13.02 M at 30 June 2020 (€10.56 M at
31 December 2019). Net cash totalled approximately
€6 M versus €8.01 M at 30 June 2020. The
change between 30 June and 30 September 2020 is mainly
due to payments in July and August of social contributions
previously postponed.Given positive headline PBIT3 in Q3, the
absence of a dividend payment and ongoing suspension of the share
buyback programme, the €30 M government-backed loan has not
been used to date.
ADJUSTED GUIDANCE
As its businesses have held up better than expected with costs
kept under control in Q3 2020, the Group has adjusted its
previously announced guidance as follows:
- Decline in gross profit of between 5% and 7% in H2
2020 (H1 2020: down 16.1%);
- 2020 adjusted operating margin (adjusted
headline PBIT/gross profit) raised from over 10% to over
12% (2019 adjusted operating margin: 18.5%).
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 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
Cynthia LeratManaging
Director
Press Relations+33 1 77 75 65
06
+33 1 77 75 65
16comfi@highco.com
c.lerat@highco.com
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event
Publication takes place after market
close.
Q4 and FY 2020 Gross Profit: Wednesday, 20
January 2021
HighCo is a component stock of the indices CAC®
Small (CACS), CAC® Mid&Small (CACMS), CAC® All-Tradable (CACT),
Euronext® Tech Croissance (FRTPR) and Enternext® PEA-PME 150
(ENPME).ISIN: FR0000054231Reuters: HIGH.PABloomberg: HCO FPFor
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 T3 2020 MB_VDEF_EN
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