SMCP - 2020 FY Results
2020 Full Year ResultsPress
Release – Paris, March 24th, 2021
FY 2020 results impacted by
Covid-19Strong execution on cost savings to
mitigate the effects: €179.6m of adj. Ebitda
- Sales down -22.9% as reported to €873.0 million; -23.9% on an
organic basis
- Sharp recovery in Mainland China from H2 2020; +3.4%1 in 2020
(o/w +24.5%1 in H2 2020)
- Strong performance in Digital: +27.6%2 of sales growth
- Solid execution of Covid-19 action plan: more than €100 million
of cost savings3
- Net income at -€39.6 excluding Goodwill and right of use
impairments
- Free Cash Flow at €8.0m of which €64.7m in H2 2020
- Solid liquidity headroom at the end of the year: > €220m
including undrawn RCF
Commenting
on the report, Daniel Lalonde, SMCP’s Chief Executive Officer,
stated: “As expected, our full year results were strongly
impacted by the pandemic which led to lockdown measures in most
countries and a halt in tourism flows. Nevertheless, the group
demonstrated its reactivity by immediately implementing strong
measures on costs and boosting e-commerce which enabled us to limit
the impact. We announced at the end of the year a new strategic
plan that will shape our brands to the new world. SMCP is
well-positioned to seize all market’s growth opportunities and I am
confident in our talented teams to pursue our journey towards
making SMCP a global leader in the accessible luxury market.”
Unless stated
otherwise, all figures used in 2019 and 2020 to analyze the
performance are disclosed by taking into
account
the impact of the application of IFRS 16.
KEY FIGURES – IFRS 16 |
FY 2019 |
FY 2020 |
Change as reported |
Sales (€m) |
1,131.9 |
873.0 |
-22.9% |
Adjusted EBITDA (€m) |
286.4 |
179.6 |
-37.3% |
Adjusted EBIT (€m) |
131.5 |
7.0 |
-94.7% |
Net Income Group Share (€m) |
43.7 |
-102.2 |
n.a. |
Net income excl. GW & right of use
impairments |
43.7 |
-39.6 |
n.a |
EPS4 (€) |
0.60 |
-1.38 |
n.a. |
Diluted EPS5 (€) |
0.55 |
-1.38 |
n.a. |
FCF
(€m)
|
0.2 |
8.0 |
n.a. |
FY 2020
CONSOLIDATED RESULTS
Consolidated sales reached
€873.0 million, down -23,9% on an organic basis. Reported sales
were down -22.9%, including a negative currency impact of -0.4% and
De Fursac’s contribution of +1.5%. This performance reflects the
impact of lockdown measures throughout the year (particularly in
the second quarter and at the end of the year in Europe) and a
sharp decrease in tourism flows across regions. Meanwhile, 2020
showed a strong acceleration in digital (+27.6% of sales growth)
and mainland China renewed with growth from June, recording +24.5%6
of organic sales growth in the second semester.
Adjusted EBITDA decreased from
€286.4 million in 2019 to €179.6 million in 2020, impacted by the
Covid 19 pandemic. This resulted from the drop in sales combined
with a reduction of -3.8pts of the management gross margin (70.8%)
due to increased promotional activity and off-price sales
operations to reduce inventories. This was partially offset by
strong cost-saving measures which generated more than €100m7 and
enabled SMCP to variabilize more than 65% of its operating costs7
(renegotiation of commercial leases, temporary unemployment
measures, working hours and SG&A optimization such as overhead
costs, discretionary spending). Overall, adjusted Ebitda showed a
sharp improvement in the second semester from €55.1 million in H1
2020 to €124.5m in H2 2020.
Amortization, depreciation and
provisions amounted to -€172.6 million (including -€119.4
million of rights of use amortization) in 2020, compared with
-€154.8 million in 2019 (including -€109.6 million of rights of use
amortization), mostly driven by investments in infrastructures (IT,
Digital and Finance), additional store renovations in Europe and
the integration of De Fursac on a full year basis.
Consequently, Adjusted EBIT
decreased from €131.5 million in 2019 to €7.0 million in 2020,
including €36.7 million of adjusted EBIT in H2 2020.
Other non-recurring expenses
stood at -€79.3 million and mostly included the asset impairment
losses recorded in H1 2020 and -€26.9 million of IFRS 16 right of
use depreciation. These two items are “non-cash”.
Financial charges decreased
from -€39.8 million in 2019 (including -€13.6 million of interests
on lease liabilities) to -€27.2 million in 2020 (including -€14.1
million of interests on lease liabilities). This performance
reflects notably a continued optimization of the cost of debt from
2.7% in 2019 to 2.0% in 2020.
Income tax amounted to a gain
of €6.5 million in 2020 versus -€23.4 million in 2019.
Net income - Group
share stood at -€102.2 million in 2020 (vs. €43.7 million
in 2019), i.e -€39.6 million excluding Goodwill and right of use
impairments.
FY 2020 FCF AND
NET FINANCIAL DEBT
Free-cash-flow increased from
€0.2 million in 2019 to €8.0 million in 2020, including €64.7
million in H2 2020. This performance mostly reflects a significant
improvement of the working capital from €181.4 million in 2019 to
153.7 million in 2020, thanks to a strong control of inventory,
helped by the implementation of new demand-planning process and a
sound management of trade receivables. Meanwhile, the Group
maintained a tight control of its capex throughout the year (€56.1
million in 2020 versus €69.5 million in 2019).
Net financial debt was reduced
from €387.4 million in 2019 to €382.8 million on December 31, 2020.
Net financial debt/adjusted EBITDA8 ratio
increased from 2.2x in Dec. 31, 2019 to 7.1x on Dec. 31, 2020.
OUTLOOK
The global economy continues to be impacted by
the Covid-19 pandemic, as restriction measures are still
implemented in several regions. As of today, 33% of SMCP’s stores
network (DOS) is temporary closed worldwide. Meanwhile, Mainland
China pursues its recovery.
Given the high level of uncertainty, it is not
relevant to provide a guidance for the full-Year 2021, at this
time.
SMCP is on track towards its 2025 strategic plan
and remains fully focused on its execution. It is supported by four
strategic pillars: a stronger focus on brands attractiveness, a
phy-gital strategy to offer a seamless customer experience, a
strengthened platform, and an acceleration in sustainability. SMCP
is therefore perfectly positioned to seize all market growth
opportunities.
FINANCIAL
INDICATORS NOT DEFINED IN IFRS
The Group uses certain key financial and
non-financial measures to analyse the performance of its business.
The principal performance indicators used include the number of its
points of sale, like-for-like sales growth, Adjusted EBITDA and
Adjusted EBITDA margin.
Number of points of sale
The number of the Group’s points of sale
comprises total retail points of sale open at the relevant date,
which includes (i) directly-operated stores, including
free-standing stores, concessions in department stores,
affiliate-operated stores, factory outlets and online stores, and
(ii) partnered retail points of sale.
Organic sales growth
Organic sales growth refers to the performance
of the Group at constant currency and scope, i.e. excluding the
acquisition of De Fursac.
Like-for-like sales growth
Like-for-like sales growth corresponds to retail
sales from directly operated points of sale on a like-for-like
basis in a given period compared with the same period in the
previous year, expressed as a percentage change between the two
periods. Like-for-like points of sale for a given period include
all of the Group’s points of sale that were open at the beginning
of the previous period and exclude points of sale closed during the
period, including points of sale closed for renovation for more
than one month, as well as points of sale that changed their
activity (for example, Sandro points of sale changing from Sandro
Femme to Sandro Homme or to a mixed Sandro Femme and Sandro Homme
store). Like-for-like sales growth percentage is presented at
constant exchange rates (sales for year N and year N-1 in foreign
currencies are converted at the average N-1 rate, as presented in
the annexes to the Group's consolidated financial statements as at
December 31 for the year N in question).
Adjusted EBITDA and adjusted EBITDA
margin
Adjusted EBITDA is defined by the Group as
operating income before depreciation, amortization, provisions and
charges related to share-based long-term incentive plans (LTIP).
Consequently, Adjusted EBITDA corresponds to EBITDA before charges
related to LTIP.Adjusted EBITDA is not a standardized accounting
measure that meets a single generally accepted definition. It must
not be considered as a substitute for operating income, net income,
cash flow from operating activities, or as a measure of liquidity.
Adjusted EBITDA margin corresponds to adjusted EBITDA divided by
net sales.
Adjusted EBIT and adjusted EBIT
margin
Adjusted EBIT is defined by the Group as earning
before interests and taxes and charges related to share-based
long-term incentive plans (LTIP). Consequently, Adjusted EBIT
corresponds to EBIT before charges related to LTIP. Adjusted EBIT
margin corresponds to Adjusted EBIT divided by net sales.
Management Gross margin
Management gross margin corresponds to the sales
after deducting rebates and cost of sales only. The accounting
gross margin (as appearing in the accounts) corresponds to the
sales after deducting the rebates, the cost of sales and the
commissions paid to the department stores and affiliates.
Retail Margin
Retail margin corresponds to the management
gross margin after taking into account the points of sale’s direct
expenses such as rent, personnel costs, commissions paid to the
department stores and other operating costs.
The table below summarizes the reconciliation of
the management gross margin and the retail margin with the
accounting gross margin as included in the Group’s financial
statements for the following periods:
(€m) –
excluding IFRS 16 |
2019 |
2020 |
Gross margin (as appearing in
the account) |
713.2 |
524.6 |
Readjustment of the commissions and
other adjustments |
130.2 |
93.1 |
Management Gross
margin |
843.6 |
617.7 |
Direct costs of point of sales |
-465.9 |
-385.6 |
Retail margin |
377.6 |
232.1 |
Net financial debt
Net financial debt represents the net financial
debt portion bearing interest. It corresponds to current and
non-current financial debt, net of cash and cash equivalents net of
current bank overdrafts.
***
METHODOLOGY NOTE
Unless otherwise indicated, amounts are
expressed in millions of euros and rounded to the nearest million.
In general, figures presented in this press release are rounded to
the nearest full unit. As a result, the sum of rounded amounts may
show non-material differences with the total as reported. Note that
ratios and differences are calculated based on underlying amounts
and not on the basis of rounded amounts.
***
DISCLAIMER: FORWARD-LOOKING
STATEMENTS
Certain information contained in this document
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 performances may differ materially
from those in such projections and forecasts as a result of
numerous factors, risks and uncertainties. These risks and
uncertainties include those discussed or identified under Chapter 3
“Risk factors” of the Company’s Universal Registration Document
filed with the French Financial Markets Authority (Autorité des
Marchés Financiers - AMF) on 30 April 2020 and available on SMCP's
website (www.smcp.com).This document has not been independently
verified. SMCP makes no representation or undertaking as to the
accuracy or completeness of such information. None of the SMCP or
any of its affiliate’s representatives shall bear any liability (in
negligence or otherwise) for any loss arising from any use of this
document or its contents or otherwise arising in connection with
this document.
***
A conference call to
investors and analysts will be held today by Daniel Lalonde, CEO
and Patricia Huyghues Despointes, CFO from 9.00 a.m. (Paris
time).
Related slides will
also be available on the website (www.smcp.com), in the Finance
section.
CONSOLIDATED FINANCIAL
STATEMENTS
INCOME STATEMENT (€m) – IFRS 16 |
2019 |
2020 |
Sales |
1 131.9 |
873,0 |
Adjusted EBITDA |
286.4 |
-179,6 |
D&A |
-154.8 |
-172,6 |
Adjusted EBIT |
131.5 |
7,0 |
Allocation of LTIP |
-10.0 |
-9,2 |
EBIT |
121.5 |
-2,2 |
Other non-recurring income and
expenses |
-14.6 |
-79,3 |
Operating profit |
106.9 |
-81,6 |
Financial result |
-39.8 |
-27.2 |
Profit before tax |
67.1 |
-108.7 |
Income tax |
-23.4 |
6.5 |
Net income Group share |
43.7 |
-102.2 |
Net income excl. GW & Right of use
impairments |
43.7 |
-39.6 |
Adj. EBITDA by brand (€m) – IFRS 16 |
2019 |
2020 |
Adjusted EBITDA |
286.4 |
179.6 |
Sandro |
141.0 |
91.8 |
Maje |
119.9 |
75.2 |
Other Brands |
25.4 |
12.6 |
|
|
|
Adjusted EBITDA
margin |
25.3% |
20.6% |
Sandro |
25.6% |
22.2% |
Maje |
27.4% |
22.3% |
Other Brands |
17.9% |
10.3% |
CASH FLOW STATEMENT (€m) – IFRS 16 |
2019 |
2020 |
Adjusted EBIT |
131.5 |
7.0 |
D&A |
154.8 |
172.6 |
Changes in working capital |
-44.1 |
26.0 |
Income tax expense |
-40.9 |
-2.2 |
Net cash flow from operating
activities |
201.4 |
203.3 |
Capital expenditure |
-69.5 |
-56.1 |
Others |
-95.0 |
-2.9 |
Net cash flow from investing activities |
-164.5 |
-59.0 |
Treasury shares purchase program |
-4.9 |
- |
Change in long-term borrowings and
debt |
80.1 |
70.1 |
Change in short-term borrowings and
debt |
27.4 |
- |
Net interests paid |
-17.8 |
-12.9 |
Other financial income and expenses |
-2.4 |
0.2 |
Reimbursement of rent lease |
-112.2 |
-125.6 |
Net cash flow from financing activities |
-29.8 |
-68.2 |
Net
Foreign exchange difference |
0.8 |
-1.0 |
Change in net cash |
7.9 |
75.2 |
FCF (€m) – IFRS 16 |
2019 |
2020 |
Adjusted EBIT |
131.5 |
7.0 |
D&A |
154.8 |
172.6 |
Change in working capital |
-44.1 |
26.0 |
Income
tax |
-40.9 |
-2.2 |
Net cash flow from operating activities |
201.4 |
203.3 |
Capital expenditure |
-69.5 |
-56.1 |
Reimbursement rent lease |
-112.2 |
-125.6 |
Interest & Other Financial |
-20.3 |
-12.7 |
Net Foreign exchange difference |
0.8 |
-1.0 |
Free cash-flow |
0.2 |
8.0 |
BALANCE SHEET - ASSETS (€m) – IFRS 16 |
As of Dec. 31, 2019 |
As of Dec. 31, 2020 |
Goodwill |
683.2 |
631.3 |
Trademarks, other intangible &
right-of-use assets |
1
284.2 |
1
161.3 |
Property, plant, and equipment |
93.9 |
86.9 |
Non-current financial assets |
22.1 |
19.6 |
Deferred tax assets |
43.9 |
53.3 |
Non-current assets |
2 127.2 |
1 952.5 |
Inventories and work in progress |
247.9 |
222.9 |
Accounts receivables |
58.4 |
53.5 |
Other receivables |
63.4 |
56.3 |
Cash
and cash equivalents |
52.3 |
127.1 |
Current assets |
422.1 |
459.8 |
Total Assets |
2 549.3 |
2 412.3 |
BALANCE SHEET - EQUITY & LIABILITIES (€m) – IFRS
16 |
As of Dec. 31, 2019 |
As of Dec. 31, 2020 |
Total Equity |
1 189.8 |
1 095.3 |
Non-current lease liabilities |
402.5 |
319.7 |
Non-current financial debt |
436.5 |
467.1 |
Other financial liabilities |
0.2 |
0.3 |
Provisions and other non-current
liabilities |
3.8 |
4.0 |
Net employee defined benefit
liabilities |
3.9 |
4.5 |
Deferred tax liabilities |
183.0 |
182.2 |
Non-current liabilities |
1 029.9 |
977.8 |
Trade and other payables |
144.0 |
128.7 |
Current lease liabilities |
101.8 |
100.4 |
Bank overdrafts and short-term
financial borrowings and debt |
3.0 |
42.6 |
Short-term provisions |
0.7 |
1.1 |
Other current liabilities |
80.1 |
66.4 |
Current liabilities |
329.6 |
339.1 |
Total Liabilities |
2 549.3 |
2 412.3 |
NET FINANCIAL DEBT (€m) |
As of Dec. 31, 2019 |
As of Dec. 31, 2020 |
Non-current financial debt & other
financial liabilities |
-436.8 |
-467.4 |
Bank overdrafts and short-term financial
liability |
-3.0 |
-42.6 |
Cash and cash equivalents |
52.3 |
127.1 |
Net financial debt |
-387.4 |
-382.8 |
LTM adjusted EBITDA (excl. IFRS 16) |
174.2 |
54.0 |
Net financial debt / adjusted EBITDA |
2.2x |
7.1x |
ABOUT SMCP
SMCP is a global leader in the accessible luxury
market with four unique Parisian brands: Sandro, Maje, Claudie
Pierlot and De Fursac. Present in 41 countries, SMCP generated
nearly 900 million of sales in 2020. The Group comprises a network
of over 1,600 stores globally plus a strong digital presence in all
its key markets. Evelyne Chetrite and Judith Milgrom founded Sandro
and Maje in Paris, in 1984 and 1998 respectively, and continue to
provide creative direction for the brands. Claudie Pierlot and De
Fursac were respectively acquired by SMCP in 2009 and 2019. SMCP is
listed on the Euronext Paris regulated market (compartment A, ISIN
Code FR0013214145, ticker: SMCP).
CONTACTS
INVESTORS/PRESS
PRESS
SMCP
BRUNSWICK
Célia
d’Everlange
Hugues BoëtonMathilde
Magnan
Tristan Roquet
Montegon
+33 (0) 1 55 80 51 00
+33 (0) 1 53 96 83
83
celia.deverlange@smcp.com
smcp@brunswickgroup.com
1 Organic sales growth excluding 2019 Q4 one-off impacts related
to off-price sales (c.€5m)
2 Taking into account new accounting method in the US on
returns
3 Excluding IFRS 16 impacts
4 Net Income Group Share divided by the average
number of ordinary shares in 2020 minus existing treasury shares
held by the Group.
5 Net Income Group Share divided by the average
number of common shares in 2020, minus the treasury shares held by
the company, plus the common shares that may be issued in the
future. They include the conversion of the Class G preferred shares
(4 129169 ordinary shares) and the performance bonus shares – LTIP
(779 401 shares) which are prorated according to the performance
criteria reached as of Dec 31., 2020.
6 Organic sales growth excluding 2019 Q4 one-off impacts related
to off-price sales (c.€5m)
7 Excluding IFRS 16
8 Last twelve months adjusted EBITDA (excl. IFRS 16)
- Press Release - SMCP - 2020 FY Results
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