INTE TERIM R RESU SULTS TS For the the S Six M Mont nths e end nded 30 30 September 2019 2019
Highlights FY2019 H1 FY2020 H1 Change FY2020 H1 excl. IFRS reported reported 16 impact Net sales (million €) 595.4 727.2 +22.1% 727.2 Net sales growth at constant rates +19.0% Gross profit margin 82.4% 81.2% -1.2 pp 81.2% Operating profit margin 1.0% 5.7% +4.7 pp 5.5% Net profit margin 0.9% 3.5% +2.6 pp 4.0% Earnings per share (€ per share) 0.005 0.017 +240.0% 0.020 * The Group adopted IFRS 16 from 1 April 2019 but has not restated comparatives for the prior year’s reporting period. 2
Accounting and comparability matters Already in Cash / Recurring / FY2020 H1 non-cash one-off Lease accounting under IFRS 16 Yes Non-cash Recurring ELEMIS acquisition costs through P&L Yes Cash One-off ELEMIS purchase price allocation No ELEMIS amortization of customer relationships No Non-cash Recurring Accounting treatment of fiscal depreciation of Yes (LL) Non-cash Recurring LimeLife and ELEMIS goodwills No (Ele) Swiss tax rate Yes Cash Recurring 3
IFRS 16 Impact on Net Profit & Balance Sheet FY2019 FY2020 FY2020 Growth % Growth % H1 H1 H1 reported reported IFRS 16 excluding reported excluding impacts IFRS 16 IFRS 16 impacts impacts € '000 € '000 € '000 € '000 Net Sales 595,385 727,157 727,157 22.1% 22.1% Cost of sales (104,857) (137,047) (137,047) Gross profit 490,528 590,110 590,110 20.3% 20.3% Operating profit 5,812 41,771 1,951 39,820 618.7% 585.1% Finance costs, net (1,687) (10,691) (6,843) (3,848) Foreign currency gains / (losses) (1,536) 1,618 (405) 2,023 Profit before income tax 2,589 32,698 (5,297) 37,995 1163.0% 1367.6% Income tax expense 2,999 (7,460) 1,208 (8,668)* -348.7% -389.0% Net profit 5,588 25,238 (4,089) 29,327 351.6% 424.8% Total Assets (€ mil) 1,294 2,379 408 1,971 83.9% 52.4% Net (Cash) / Debt (€ mil) (164) 905 432 474 -650.7% -388.1% * assumed the same effective tax rate percentage as in the reported profit for the period ended 30 September 2019. 4
Seasonality: low profit contribution from 1H Operating profit (million €) Net Sales (million €) 1,600 160 151 1,427 1,400 140 1,200 120 1,000 100 800 80 595 600 60 42% 400 40 200 20 6 4% 0 0 FY2019 H1 FY2019 FY2019 H1 FY2019 5
H1 Net Sales Breakdown By Business Segment By Brand By Geography * Other Others USA LimeLife countries 6.5% 18.4% 5.6% 22.3% Elemis Taiwan 11.6% 2.1% Sell-in 33.9% Russia Japan 3.1% Sell- 14.7% L'Occitane out Brazil en Provence 66.1% 3.6% 76.3% France UK 6.7% 10.6% China Hong Kong 10.5% 8.0% * Others include emerging brands Melvita, Erborian and L'Occitane au Brésil. 6
H1 net sales up 19.0% at constant rates (22.1% at reported rates) million € local currency growth: 19.0% +2% 400 overall sales growth: 22.1% 350 currencies: 3.1% +52% 300 +20% 250 H1 FY2019 200 H1 FY2020 150 100 50 0 Comp Non-comp Sell-in FX rates (1) stores stores & others Contribution 5% 23% 73% to growth (2) : (1) Others include LimeLife, marketplaces and other service sales. (2) Excluding the impact of foreign currency translation effects. 7
H1 sales growth by geography – Americas and Europe (at constant rates) million € H1 FY2019 H1 FY2020 250 200 (3) +26% 150 (2) +235% 100 +7% +10% 50 +15% 0 France UK USA Brazil Russia Contribution 3% 48% 23% 2% 3% to growth (1) : (1) Excluding foreign currency translation effects. (2) Excluding ELEMIS, growth in the UK was +10.8% at constant rates. (3) Excluding ELEMIS, growth in the US was -5.1% at constant rates. 8
H1 sales growth by geography – Asia and others (at constant rates) million € H1 FY2019 H1 FY2020 250 200 +10% 150 +4% +13% 100 -6% 50 +3% 0 Japan Hong Kong China Taiwan Other geographic FX rates areas Contribution 4% -3% 8% 0% 13% to growth (1) : (1) Excluding foreign currency translation effects. 9
Same store sales growth profile (1) H1 FY2020 compared to H1 FY2019 6.7% 4.1% 6.4% 3.3% 4.2% 2.7% 1.0% -0.8% -4.0% -4.6% France UK USA Brazil Russia 7.6% 5.7% 5.4% 5.4% 1.9% 1.7% 2.0% 1.3% -0.3% -0.6% -3.0% -19.0% Japan Hong Kong China Taiwan Other Group geographic areas H1 FY2019 H1 FY2020 (1) Including own E-commerce 10
Profitability analysis % of net sales FY2019 H1 FY2020 H1 Change Gross profit margin 82.4 81.2 (1.2) Distribution expenses (55.0) (50.4) 4.6 Marketing expenses (14.6) (12.7) 1.9 Research & development expenses (1.4) (1.4) 0.0 General & administrative expenses (10.5) (10.9) (0.4) Other gains 0.1 0.0 (0.1) Operating profit margin 1.0 5.7 4.7 11
Gross margin (as % of net sales) -1.7 +0.4 +0.1 +0.2 -0.2 +0.1 -0.1 82.4% 81.2% FY2019 H1 Brand mix promo new pricing obsole- production FX FY2020 H1 tools factory in product scence & freight Brazil & mix & duties others 12
Distribution expenses (as % of net sales) phasing Leverage FY2019 LimeLife & & channel Brand FY2020 H1 invest FX others IFRS 16 efficiency mix mix H1 (50.4%) (55.0%) +3.6 +0.5 +0.3 +0.3 +0.3 -0.1 -0.3 13
Marketing expenses (as % of net sales) advertising, leverage, events, brand efficiciency, tools, FY2019 H1 other mix phasing teams CRM FY2020 H1 (14.6%) (12.7%) +0.8 +0.6 +0.3 -0.1 +0.3 14
General & admin expenses (as % of net sales) Acquisition one-off & brand FY2019 H1 costs Invest litigations others FX mix FY2020 H1 (10.5%) (10.9%) -0.7 +0.5 -0.3 +0.1 -0.1 +0.1 15
Operating profit margin (as % of net sales) +0.3 -0.9 +0.4 +0.4 -0.9 +0.5 +1.2 +1.4 +2.3 5.7% 1.0% FY2019 H1 brand leverage Targeted FX Phasing Channel IFRS 16 Acquisition Other FY2020 H1 mix efficiency Controlled mix fees invest Marketing & others 16
Working capital ratios as at: FY2019 H1 FY2020 H1 Change Inventory turnover days (based on cost of sales) 302 286 -16 Trade receivables turnover days (based on net sales) 33 38 5 Trade payables turnover days (based on cost of sales) 204 200 -4 Cash Cycle (days of net sales) 51 54 3 Inventory turnover days +13 -40 +11 302 286 FY2019 H1 Existing FX ELEMIS FY2020 H1 brands 17
Balance sheet ratios Reported Reported Excl. IFRS 16 impacts FY2019 H1 FY2020 H1 FY2020 H1 Profitability Return on Capital Employed (ROCE) (1) 1.3% 2.1% 1.7% Return on equity (ROE) (2) 0.8% 2.9% 2.5% Liquidity Current ratio (times) (3) 2.6 1.5 1.2 Quick ratio (times) (4) 1.8 0.9 0.7 Capital adequacy Gearing ratio (5) 7.1% 25.9% 39.6% Debt to equity ratio (6) net cash position 44.0% 84.5% (1) Net Operating Profit After Tax # / Capital Employed (2) Net profit attributable to equity owners / shareholders' equity excluding minority interest (3) Current assets / current liabilities (4) Current assets - stocks / current liabilities (5) Total debt / total assets (6) Net debt / (total assets - total liabilities) * 100% # NOPAT = (Operating Profit + foreign currency net gains or losses) x (1 - effective tax rate) Capital Employed = Non-current assets - (deferred tax liabilities + other financial liabilities + other non-current liabilities) + working capital 18
Capital expenditures (excl. acquisitions of subsidiaries and financial investments) million € 45.0 38.7 22.4 17.8 13.0 12.1 8.8 8.0 1.7 0.0 stores Info. factories others Total Tech. R&D FY2019 H1 FY2020 H1 19
Strategic review - Immortelle Reset serum on - Aim to provide a seamless track to sell 1 million units path-to-purchase online and for the full year offline - ELEMIS will further bolster - Created exciting retail the skincare segment experiences in key cities such as Tokyo and London Skincare Positioning Omni-channel Experiences - Further diversification of - Focus on profitability brand mix is expected evident in disciplined and - ELEMIS’ market expansion is targeted investments imminent - Marketing investments are - Each brand encouraged to concentrated on major be autonomous while campaigns, products and Multi-brand Strategy Targeted Investments identifying synergies channels - Leveraged expertise of local - Sustainability is prioritized at marketing teams to create every step of the value chain culturally-relevant and - Expanded agreement with impactful campaigns Loop Industries to transition - Successful “Balloon Journey” to 100% sustainable PET brand event held for a plastic packaging earlier Engaging Marketing Sustainability second year to an expanded than expected Campaigns number of cities 20
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