SMCP Full Year 2017 Results Wednesday, 21 st March 2018
SMCP Full Year 2017 Results Wednesday, 21 st March 2018 Welcome Célia d’Everlange Head of Investor Relations, SMCP Good morning everyone. For those being in Paris and being connected, thank you for listening to us this morning for the Full Year Results of SMCP. It is obviously an important full-year meeting because it is the first full-year meeting since the IPO. I would like to invite you to go through the disclaimer and remind you that all definitions are on the back of the presentation. I will now welcome Daniel Lalonde, CEO of SMCP, and Philippe Gautier, CFO of the Group. 2017 Highlights Daniel Lalonde CEO, SMCP This was Célia. You did not present yourself. Célia d’Everlange joined us as Head of Investor Relations a month ago. We are very happy to have her here with us and very, very excited. She had the same type of role at Danone before and then worked at Rothschild for ten years prior to that. We are very, very excited Célia to have you here, trust me. Outstanding 2017 Results – Exceeded Guidance I will go through the results. I will take my time but most of you will probably have seen the results that we are announcing for Full Year 2017. We are very proud of the results, the accomplishments, and you will see we beat the consensus in our first year of announcement. This is a little bit my opening slide. You can see what our guidance was throughout the year last year. Sales €900m, we were very precise, around €900m. We achieved €912m but you have seen that in January. What is new this morning is EBITDA margin. We guided to 16.5% and achieved 16.8%, 30bps ahead of our guidance. CAPEX we were right in the guidance, just €1 m below the €50m, and we moved the needle significantly on leverage throughout the year. At the end of December 2016 our leverage was in fact 3.1x and throughout the year we finished at 1.9x. Philippe will explain natural part of it was due to the IPO but there is a very natural deleveraging that we have in our company due to our free cash flow. That is a good start. Another Year of Strong Growth The second one is chiffre d’affaires . You have probably seen this one before. Essentially we are at x4.96 since 2010 in terms of sales growth. Last year, on a reported basis, we grew ay 16% and importantly at a constant currency basis at 17.5%. Again, another very solid year of growth. We are theoretically $1bn but we are in euro so we will maybe achieve that in 2018. The growth, as we have talked with many of you many times, is not just high growth. It has been sustainable growth and it is quality growth. We can talk about that in Q&A if you would like but our growth has been on growing our core business the hard way. Not through a whole bunch of licenses, not through a lot of outlet business. It has been very, very focused on growing the core business. 2
SMCP Full Year 2017 Results Wednesday, 21 st March 2018 It is maybe hard to see but on the bottom, what I would like too is only stress the percentage of international business. That has grown from 28% in 2012 to almost 60% last year. That is very exciting for us because often we get the question, ‘France is a big market. We are a little nervous perhaps on France.’ We love France. We have been doing very w ell in France but we recognise it is important to build our business in other regions. And we have done very, very successfully so over the years. I think that trend will certainly continue as we continue to grow. Creating Value through Profitable Growth EBITDA, you have seen the numbers. It is €153.7m , so let us say €154m. 16.8% margin. The guidance that we gave was around 16.5% so we are again 30bps ahead of our guidance. Philippe will take you a little bit more through that in detail. Leveraging All Our Growth Drivers Our strategy has not changed and I will try to go quickly over it. It is the same pillars and the same growth levers that we have presented before in our strategy. We have three buckets again. The first one is pursuing and investing in what we call organic value drivers. This is to build and continue to grow like-for-like which is very, very important to us. That is building on the core. It is great collections, always desirable collections worldwide, great customer experience. Our CRM communication is very important. We now have 5 million active customers for the three brands throughout the world. Then we have emphasised three areas to grow, to help like-for-like. There is digital, very important which I will talk about; Men’s , we think is still a huge opportunity; and Accessories. Number two is to continue to gain market share in France which remains 41% of our business, so still a large market. It is a market that has not really grown for the last seven years. It has been in slight decline, anywhere between 1% and 1.5%. Last year was flattish. We had a decent year last year but that was flat. Here we want to continue to gain market share and we have done so in the past years. Then developing our brick-and-mortar and digital network as well in selected markets, the same six markets that we have spoken about over the last six months. I will show you the potential. The size of the prize, we will try to get a little more granular on that. However, they are Greater China, four markets in Europe and North America. Then lastly we have a couple of partnership markets again that we do not operate in directly but we have partners that operate single branded stores, just like we do, in selected markets. These are the strategic ones: South Korea, Australia and the Middle East. We have a push model. We help them replenish. It is a very natural extension of our retail model for us. Build on the Core I will give you a couple of highlights very quickly of last year. The first KPI indicator, our like- for-like grew last year to 7.8%. Our like-for-like business was stronger in 2017 than in 2016. Our like-for-like grew. We did a few things. We talk about great ready-to-wear collections. This is an example. This is a Maje dress of the Capsule Soir. We do a lot of capsule collections throughout our brands. We have done a Middle East collection, a capsule. We did Chinese New Year last year for Sandro. This is Maje Capsule Soir which came out at the end of the year. 3
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