SMCP - 2020 Q2 Sales
2020 second quarter Press release
- Paris, July 29, 2020
Sales strongly impacted by Covid-19, as
anticipatedGradual sales improvement throughout
quarterMainland China back to growth in
June
- Q2 2020 sales down -45.8% as reported; -47.0% on an organic1
basis
- Mainland China sales continued to gradually improve throughout
Q2 2020, returning to sales growth in June
- Strong digital acceleration in all regions (+32.0% of sales
growth2)
- Solid execution, in H1 2020, of the action plan to mitigate the
impact of crisis:
- Capex: meaningful reduction
- Opex: Variabilization of 50% of total costs
- Inventories: Reduction of FW20 purchases by more than 30%
- Cash: signature of €140m state guaranteed loan and additional
flexibility on 2020-21 financial covenants
- Selective openings: +8 DOS in Q2 2020
Commenting on the report, Daniel
Lalonde, SMCP’s CEO, stated: “As anticipated, the Covid-19
pandemic strongly impacted our sales over the quarter, as shutdown
measures were implemented in many countries, and as tourism has
been absent for several months. Nevertheless, since the beginning
of May we have seen a progressive improvement in our sales as our
stores gradually reopened. Our performance in mainland China showed
good resilience and returned to growth in June. Digital has been
part of the Group’s key drivers for years and has once again
demonstrated its ability to support our sales despite lockdown
measures in all of our regions. Regarding costs, we have also made
meaningful progress on our action plan to mitigate the impact of
the crisis, including reducing our costs and increasing our
financial flexibility. Despite the persistent market uncertainties,
I remain confident in our ability to get through this unprecedented
crisis thanks to the strength of our business model, the
attractiveness of our brands and the impressive commitment of our
teams”.
€m except
%Unaudited figures |
Q2 2019 |
Q2 2020 |
Organic sales change |
Reported sales change |
H1 2019 |
H1 2020 |
Organic sales change |
Reported sales change |
Sales by
region |
|
|
|
|
France |
87.5 |
47.3 |
-49.6% |
-46.0% |
183.5 |
133.0 |
-33.8% |
-27.5% |
EMEA3 |
79.4 |
35.8 |
-55.1% |
-54.9% |
158.8 |
106.6 |
-33.5% |
-32.8% |
Americas |
37.0 |
11.3 |
-69.8% |
-69.4% |
68.7 |
38.3 |
-45.5% |
-44.3% |
APAC4 |
61.8 |
49.8 |
-19.1% |
-19.5% |
129.3 |
94.9 |
-26.6% |
-26.6% |
Sales by Brand |
|
|
|
|
Sandro |
129.9 |
71.5 |
-45.0% |
-44.9% |
262.4 |
177.1 |
-32.8% |
-32.5% |
Maje |
105.4 |
53.8 |
-49.0% |
-49.0% |
212.4 |
139.5 |
-34.6% |
-34.3% |
Other brands5 |
30.4 |
18.8 |
-49.1% |
-38.1% |
65.6 |
56.3 |
-32.7% |
-14.2% |
TOTAL |
265.7 |
144.1 |
-47.0% |
-45.8% |
540.3 |
372.8 |
-33.5% |
-31.0% |
In the second quarter of 2020, consolidated
sales reached €144.1 million, down -47.0% on an organic basis.
Reported sales were down -45.8%, including a neutral currency
impact and De Fursac’s contribution of +1.2%. This performance
reflects the impact of strict shutdown measures in most countries
for a large part of the quarter, and a halt in tourism flows across
regions. Over the quarter, while traffic in stores remained weak,
the Group recorded solid conversion rates. Furthermore, SMCP
partially offset the impact of the crisis through a strong
performance in e-commerce6 (+32.0% of sales growth).
Over the first 6 months, consolidated sales
stood at €372.8 million, down -33.5% on an organic basis, including
a like-for-like sales performance of -37.6%. Overall, reported
sales decreased by -31.0%, including a positive currency impact of
+0.3% and a positive contribution of +2.2% from De Fursac.
Over the last twelve months, SMCP net openings4
amounted to +57 directly operated stores (DOS). This includes
+26 net openings in APAC, +27 in EMEA and +18 in Americas.
Meanwhile, the Group has pursued the optimization of its network in
France (-14 DOS) with 2 relocations (Strasbourg and La Vallée
Village) and 1 closure (Poitiers) in Q2 2020. SMCP open 8 DOS7 in
Q2 2020.
Sales
breakdown by region and by brand
In France and EMEA, sales were
down -49.6% and -55.1% respectively on an organic basis, in line
with the Group average, showing a gradual sales improvement
throughout the quarter as stores gradually reopened. In
Europe, sales trends were relatively contrasted due to
various degrees of local shutdowns and levers of exposure to
tourism, which remained absent throughout the quarter. Among top
performers are Germany, the Netherlands and Switzerland, while
Italy, the UK and Spain were the most challenged. In
France, performance was relatively resilient compared to
Europe, despite some negative calendar effects related to the
summer sales which were postponed by 3 weeks to July 15. Meanwhile,
the Group generated a strong performance in digital4 in Europe
(+39.7%).
In the Americas, sales were
down -69.8% on an organic basis, showing a greater impact from the
crisis as most stores remained closed until the end of June,
notably in New York, a key area for the Group. The situation there
remains difficult, as the region is still fighting the pandemic.
That could result in some potential reclosures of stores, such as
in Florida and California. In parallel, e-commerce displayed a
strong performance (+21.4%), showing a strong acceleration versus
Q1 2020.
In APAC, sales were down -19.1%
on an organic basis, showing a sequential improvement throughout
the quarter. This performance reflected good resilience in mainland
China (-3.4% of organic growth in Q2 2020) and some contrasted
trends in the rest of Asia. In mainland China, the
Group recorded a gradual improvement throughout the quarter,
returning to sales growth in June. These early signs of recovery
are encouraging but the performance remained contrasted by region
in mainland China. While the South of mainland China benefits, in
June, from positive trends in many cities, the North is still
facing some risks of local shutdowns. In parallel, mainland China
benefitted from a strong performance on e-commerce (+17.2%), driven
by successful operations on T-Mall such as the celebration of the
brands’ anniversaries or the 6/18 event. In the rest of
Asia, SMCP recorded contrasted trends including a good
resilience in South Korea and Taiwan and tougher markets in
Hong-Kong and Singapore.
On an organic basis, Sandro
(-45.0%), Maje (-49.0%) and the Other
Brands division (-49.1%) recorded a similar drop in sales,
almost equally impacted by the Covid-19 epidemic.
UPDATE ON
COVID-19 OUTBREAK AND 2020 OUTLOOK
As of end of July, most DOS have reopened (99%),
including more recently the UK, the US and Singapore. However,
risks of local shutdowns remain present, particularly in the US,
Hong-Kong and Beijing. The Group is carefully monitoring the
situation.
Over the first part of the year, SMCP has
perfectly executed its action plan to mitigate the impact of the
crisis, including reducing meaningfully its capital expenditure,
variabilizing half of its operating expenses and reducing by more
than 30% its FW20 collection purchase to limit inventories at the
end of the year. The Group also increased its financial flexibility
by signing a state guaranteed loan of €140m and obtaining a
suspension of its financial covenants for 2020 and an easing of its
financial covenants for 2021.
Given the high level of uncertainty around the
duration of the epidemic, SMCP does not disclose any guidance for
2020, both in sales and profitability.
The Group remains confident in its business
model and the attractiveness of its brands. The dedication of its
teams towards ensuring a strict control of its costs will
contribute to mitigating the impact of Covid-19. SMCP’s financial
structure and level of liquidity put the Group in a solid position
to face these exceptional circumstances.
FINANCIAL
CALENDAR
·Sept. 4,
2020 - 2020 H1 results
APPENDICES
Breakdown of DOS
Number of DOS |
H1-19 (excl. DF) |
2019 (incl. DF) |
Q1-20 (incl. DF) |
H1-20 (incl. DF) |
|
Var H1 20 vs. Q1 20 (incl. DF) |
Var H1 20 vs. FY 19 (incl. DF) |
Var H1 20 vs. H1 19 (excl. DF) |
|
|
|
|
|
|
|
|
|
By
region |
|
|
|
|
|
|
|
|
France |
481 |
528 |
522 |
524 |
|
+2 |
-4 |
-14 |
EMEA |
385 |
413 |
413 |
415 |
|
+2 |
+2 |
+27 |
Americas |
146 |
162 |
164 |
164 |
|
- |
+2 |
+18 |
APAC |
195 |
219 |
217 |
221 |
|
+4 |
+2 |
+26 |
|
|
|
|
|
|
|
|
|
By
brand |
|
|
|
|
|
|
|
|
Sandro |
520 |
550 |
554 |
555 |
|
+1 |
+5 |
+35 |
Maje |
423 |
444 |
443 |
448 |
|
+5 |
+4 |
+25 |
Claudie
Pierlot |
217 |
224 |
222 |
223 |
|
+1 |
-1 |
+6 |
Suite 341 |
47 |
44 |
38 |
38 |
|
- |
-6 |
-9 |
De Fursac |
na |
60 |
59 |
60 |
|
+1 |
- |
na |
Total DOS |
1,207 |
1,322 |
1,316 |
1,324 |
|
+8 |
+2 |
+57 |
Breakdown of POS
Number of POS |
H1-19 (excl. DF) |
2019 (incl. DF) |
Q1-20 (incl. DF) |
H1-20 (incl. DF) |
|
Var H1 20 vs. Q1 20 (incl. DF) |
Var H1 20 vs. FY 19 (incl. DF) |
Var H1 20 vs. H1 19 (excl. DF) |
|
|
|
|
|
|
|
|
|
By
region |
|
|
|
|
|
|
|
|
France |
481 |
530 |
522 |
524 |
|
+2 |
-6 |
-14 |
EMEA |
504 |
535 |
531 |
534 |
|
+3 |
-1 |
+27 |
Americas |
181 |
189 |
191 |
193 |
|
+2 |
+4 |
+12 |
APAC |
352 |
386 |
388 |
399 |
|
+11 |
+13 |
+47 |
|
|
|
|
|
|
|
|
|
By
brand |
|
|
|
|
|
|
|
|
Sandro |
672 |
707 |
711 |
716 |
|
+5 |
+9 |
+44 |
Maje |
557 |
577 |
576 |
587 |
|
+11 |
+10 |
+30 |
Claudie
Pierlot |
242 |
250 |
248 |
249 |
|
+1 |
-1 |
+7 |
Suite 341 |
47 |
44 |
38 |
38 |
|
- |
-6 |
-9 |
De Fursac |
na |
62 |
59 |
60 |
|
+1 |
-2 |
na |
Total POS |
1,518 |
1,640 |
1,632 |
1,650 |
|
+18 |
+10 |
+72 |
o/w Partners POS |
311 |
318 |
316 |
326 |
|
+10 |
+8 |
+15 |
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.
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 of
December 31 for the year N in question).
Organic sales growth
Organic sales growth corresponds to total sales
in a given period compared with the same period in the previous
year, expressed as a percentage change between the two periods, and
presented at constant exchange rates (sales for period N and period
N-1 in foreign currencies are converted at the average year N-1
rate) excluding scope effects, i.e. excluding the acquisition of De
Fursac
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.
***
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 Philippe Gautier, CFO and Operations Director from 9.00 a.m.
(Paris time).
Related slides will
also be available on the website (www.smcp.com), in the Finance
section.
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 is a
fast-growing company which reached the milestone of €1bn in sales
in 2018. The Group comprises a network of over 1,500 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
Boëton
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 All references in this document to the organic sales
performance refer to the performance of the Group at constant
currency and scope, i.e. excluding the acquisition of De Fursac
2 Excluding De Fursac
3 EMEA covers the Group's activities in European countries
excluding France (mainly the United Kingdom, Spain, Germany,
Switzerland, Italy and Russia) as well as the Middle East
(including the United Arab Emirates).
4 APAC includes the Group's Asia-Pacific operations (mainly
Mainland China, Hong Kong, South Korea, Singapore, Thailand and
Australia).
5 Claudie Pierlot and De Fursac brands
6 Excluding De Fursac
7 Including De Fursac
- Press Release - SMCP - 2020 Q2 Sales
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