A SOLID FIRST QUARTER DESPITE DEMANDING
COMPARISON
- Sales: €1,915m, +3.4% vs record-high 1st quarter 2021 (+31%
LFL)
- Organic growth of +0.4% including effects for ca. - 4 points
stemming from Russia-Ukraine and from variations of Loyalty
Programs
- Operating Result from Activity (ORFA): €140m, €172m LFL
(€198m in Q1 2021)
- Net debt: €1,850m, +€385m vs 03/31/2021
- Ambition for 2022 maintained: growth in sales and increase
in Operating Result from Activity
Regulatory News:
Statement by T. de La Tour d’Artaise, Chairman and CEO of
Groupe SEB (Paris:SK)
“We have started 2022 with a solid first quarter against high
comparatives and in a more uncertain environment, with the conflict
in Ukraine and recent COVID restrictions in China. These results
reflect the strength of our model and the Group continued to
outperform the market and reinforce its positions. The Consumer
business is trending positively, with revenue on the rise in most
countries. The Professional business posted a nice double-digit
growth in the first quarter, confirming its gradual recovery and
the resumption of several major contracts.
While remaining highly vigilant as to the global geopolitical
and sanitary situation, we continue to invest in innovation and our
brands to sustain growth and maintain a favorable price mix. Our
ambition for 2022 - growth in sales and increase in Operating
Result from Activity- remains unchanged.”
* LFL = organic: at constant exchange rates and scope
GENERAL COMMENTS ON GROUP SALES
With sales of €1,915m, up 3.4% against demanding comparatives
in 2021, Groupe SEB got off to a good start in 2022 in an
environment marked by the conflict in Ukraine, the resurgence of
COVID-19 in China and Japan, persisting supply chain issues and
inflation.
The 3.4% increase includes organic growth of +0.4% and a
currency effect of +3.0%. The scope effect was zero.
These performances should be seen in the light of an extremely
demanding comparison basis in first quarter 2021, which combined
exceptional business momentum and extensive loyalty programs
accounting for approximately €50m. As a result:
- organic growth in the first-quarter includes effects for ca.
- 4 points stemming from Russia-Ukraine and from variations of
Loyalty Programs;
- Group sales grew by 11% (as reported) vs the first quarter
of 2019, the last “normal” basis of comparison.
The Group’s growth trajectory is healthy and consistent with our
expectations.
The Consumer business achieved sales of €1,760m, up 2.2% and
down slightly like-for-like (-0.8%) against extremely high
comparatives in 2021. Sales were also up 14% (as reported) from
2019.
Business activity trended positively overall, despite persistent
supply-chain disruptions, with revenue rising in most countries and
a favorable price-mix effect. The Group continued to outperform the
market and reinforce its positions.
In terms of products, brisk business in floor care (vacuum
cleaners) was confirmed, on the strength of its broad range and
product dynamic. The XÔ launch proved a major success at retailers
and sell-out has been highly satisfactory. Linen care sales
were back to growth as social lives returned to normal. However,
cookware and electrical cooking demand was moderate relative
to a very strong previous-year period including the loyalty
programs mentioned above.
Professional sales totaled €156m in the first quarter for
an increase of over 20%, including organic growth of 16.8%. Despite
undemanding comparison with first-quarter 2021 (when most of the
hospitality and catering sector was shut down), this performance
confirms the recovery in core business, driven both by equipment
and services.
* Like-for-like: at constant exchange rates and scope of
consolidation
DETAIL OF REVENUE BY REGION
Sales (€m)
First- quarter
2021
First- quarter
2022
Change 2022/2021
Change 2022/2019 reported
As reported
LFL*
EMEA
Western Europe
Other countries
870
599
271
813
582
231
-6.6%
-2.9%
-14.6%
-4.8%
-3.2%
-8.3%
+14.3%
+12.2%
+20.1%
AMERICAS
North America
South America
243
178
65
243
173
70
+0.3%
-2.3%
+7.4%
-6.2%
-9.1%
+1.6%
+44,4%
+69.1%
+5.9%
ASIA
China
Other countries
609
468
142
703
569
134
+15.4%
+21.7%
-5.4%
+7.0%
+10.9%
-5.8%
+6.7%
+5.2%
+13.6%
TOTAL Consumer
1,722
1,760
+2.2%
-0.8%
+14.3%
Professional business
130
156
+20.1%
+16.8%
-15.0%
GROUPE SEB
1,852
1,915
+3.4%
+0.4%
+11.2%
Rounded figures in €m
% calculated in non-rounded
figures
*Like-for-like: at constant exchange rates and scope
COMMENTS ON CONSUMER BUSINESS BY REGION
Sales (€m)
First- quarter
2021
First- quarter
2022
Change 2022/2021
Change 2022/2019 reported
As reported
LFL*
EMEA
Western Europe
Other countries
870
599
271
813
582
231
-6.6%
-2.9%
-14.6%
-4.8%
-3.2%
-8.3%
+14.3%
+12.2%
+20.1%
WESTERN EUROPE
Group revenue in Western Europe decreased 3.2% LFL in
first-quarter 2022. Excluding the impact of loyalty programs,
implemented extensively in 2021, business activity would be up
3.2%. Apart from France, all the large countries in the region
posted growth in the first quarter. The best-selling products were
vacuum cleaners, oil-less fryers, and full-automatic espresso
machines. Linen care also rebounded after two disrupted years. Over
the period, the Group overall strengthened its market shares,
notably in Germany, Belgium, the Netherlands and the United
Kingdom.
In a depressed market, Group revenue in France dropped in the
first three months of the year, the result, also, of record-high
performance in 2021 (+63% growth in Q1 2021) including a major
loyalty program focused primarily on electrical cooking. Versus the
first-quarter of 2019, which can be considered as a “normal” basis
of comparison, sales increased by over 20%. The Group achieved
solid performances in floor care, linen care, and cookware (major
recycling campaign with a retailer customer).
Elsewhere in Western Europe, business trended positively overall
against high comparatives. In Germany, the second-largest country
in the region, the Group consolidated its market share thanks to
robust momentum in electrical cooking, food preparation, and floor
care. The vast majority of the other countries posted as well nice
revenue increases in the first quarter, including Italy, the
Netherlands, Belgium and Spain.
OTHER EMEA COUNTRIES
In an overall environment marked by the war in Ukraine, Group
sales were down 8.3% LFL in the first quarter, compared with an
extremely brisk start to the year in 2021 (with organic growth of
57%). This sharply disrupted context increased currency volatility,
penalizing our quarterly revenue by around 6 points.
Our sales in Ukraine fell by around 40%. As the military
conflict began, business activity virtually ceased but the Group is
in permanent contact with its local teams, supporting and helping
them and their families.
In Russia, our revenue declined by around 20% in the first
quarter. The year had started with a buoyant market environment. As
from the beginning of the war, the Group applied the decisions of
the French authorities and stopped deliveries to customers targeted
by sanctions. Over the weeks, we strongly reduced our operations in
the country and discontinued all investments.
In the other countries, in contrast, the Group achieved solid
performances in Poland, Hungary, Egypt, and Turkey (where
substantial price increases were taken to offset the depreciation
of the Turkish lira). Growth was underpinned in particular by
cookware, full-automatic espresso machines, Optigrill, vacuum
cleaners (versatile and robot), and the introduction of flagship
products such as the Cookeo multi-cooker.
Sales (€m)
First-
quarter
2021
First- quarter
2022
Change 2022/2021
Change 2022/2019 reported
As reported
LFL*
AMERICAS
North America
South America
243
178
65
243
173
70
+0.3%
-2.3%
+7.4%
-6.2%
-9.1%
+1.6%
+44.4%
+69.1%
+5.9%
NORTH AMERICA
Our first-quarter sales in North America were slightly down in
euros, while they declined 9% LFL, against an extremely demanding
comparison with first-quarter 2021, bolstered by widespread remote
working and consumption fostered by government incentives in the
United States. The performance gap between reported and organic
terms results from the strengthening of the three currencies in the
region. Compared with 2019, excluding StoreBound, acquired in
mid-2020, first-quarter revenue rose by over 45%.
In the United States, the sales contraction stemmed from
cookware and electrical cooking amid a market downtrend,
contrasting with the exceptional sharp dynamic seen in early 2021
(+64% organic growth). Oppositely, in the high-end segment,
All-Clad’s momentum remained favorable. Simultaneously, the
resumption of more normal social lives out of home was reflected in
a recovery in our linen care sales, including irons and handheld
garment steamers.
Our first-quarter business activity in Canada was negatively
impacted by tense market conditions and supply-chain
disruptions.
In contrast, Group sales grew robustly in Mexico on solid
demand. The trend was driven by all product lines, enhanced by the
launch of new products and by the continued expansion of
distribution.
SOUTH AMERICA
The environment continued to fluctuate considerably in the first
quarter. Currencies remained volatile but the Brazilian real and
Colombian peso appreciated substantially against the euro during
the period. Against this backdrop, Group sales for the quarter grew
by 1.6% like-for-like (vs growth of +55% LFL in Q1 2021) but 7% as
reported.
In Colombia, despite occasional supply disruptions in cookware,
business momentum has been strong, materializing in a double-digit
growth, even against high comparatives in 2021. During the quarter,
new government support measures such a VAT Free Day bolstered
demand on a temporary basis. As such, our sales trended positively
in most categories, especially food preparation and fans. The Group
continued to gain market shares in small electrical appliances.
The beginning of the year in Brazil was marked by a highly
competitive environment, significant inventory levels, and
unfavorable weather in January. The situation improved gradually
over the quarter and the Group posted solid performances in food
preparation and fans, reinforcing its market positions in these
categories.
Sales (€m)
First-
quarter
2021
First- quarter
2022
Change 2022/2021
Change 2022/2019 reported
As reported
LFL*
ASIA
China
Other countries
609
468
142
703
569
134
+15.4%
+21.7%
-5.4%
+7.0%
+10.9%
-5.8%
+6.7%
+5.2%
+13.6%
CHINA
Consistent with fourth-quarter 2021, the Group posted a solid
start to the year in China, which reflected in organic revenue
growth of nearly 11%, including a favorable price-mix effect. The
Covid upsurge from mid-March did not impact significantly the
Group’s performance during the first quarter.
Sales dynamic was fueled by all product lines, and in
particular:
- continued positive momentum in cookware, with a special
mention going to woks, the largest category in the market. Supor
consolidated its leadership in cookware and kitchen tools; - a
solid increase in kitchen electrics sales across almost all product
families, from rice cookers and electrical pressure cookers to
blenders, baking pans and portable induction hobs notably; fresh
progress was also made in more “Western” product families such as
oil-less fryers, ovens, and breakfast appliances; - continued and
robust in the Large Kitchen Appliance business (extractor hoods and
built-in stoves); - confirmed strong dynamic in floor care thanks
in particular to the extension of the vacuum cleaner range.
In a market driven by e-commerce, Supor’s expanded presence on
fast-growing platforms, including in a direct-to-consumer mode, and
the continuous optimization of online execution stand as major
strengths. Along with innovation, which is vital to differentiation
and upscaling, Supor is harnessing these assets to outperform the
market and reinforce its positions in China.
OTHER COUNTRIES IN ASIA
In Asia excluding China, the decrease in sales in first-quarter
2022 should be seen in the light of the very strong performances
posted in first-quarter 2021 (+25% LFL) with double-digit growth in
all markets in the region. At the start of 2022, the emergence of
the Omicron variant in Asia led to new restrictions on movement and
decreased footfall in stores.
This was particularly true in Japan, where the reintroduction of
a near state of emergency in March hit our business in the offline
retail, including our own store network. First-quarter sales dipped
accordingly.
In South Korea, in a less restrictive environment than in Japan,
our sales for the quarter decreased moderately against demanding
comparatives in 2021. Activity was mixed, with growth in cookware
(accelerating for WMF products) but a slight contraction in small
electrical appliances.
In Australia, strong sell-in for the launch of the new G6
cookware range in first-quarter 2021 made comparison with the first
three months of 2022 difficult. However, the Group continues to
make inroads and is broadening its product offering.
In contrast, the Group achieved growth in revenue in South-East
Asia. Vietnam, notably, stood out with extremely strong business
momentum. The performance was generated mainly by e-commerce and
driven in particular by cookware (with significant upscaling),
electrical cooking (rice cookers, oil-less fryers) and fans.
COMMENTS ON PROFESSIONAL BUSINESS ACTIVITY
Sales (€m)
First-
quarter
2021
First- quarter
2022
Change 2022/2021
Change 2022/2019 reported
As reported
LFL*
Professional business
130
156
+20.1%
+16.8%
-15.0%
With growth of 20% as reported and of nearly 17% like-for-like,
the Professional business continued its recovery in the first
quarter. The performance compares with a start to the year in 2021
that was still highly impacted by lockdowns and shutdowns in the
hospitality and catering sector, notably in Germany.
In Professional Coffee, accounting for over 90% of Professional
sales, momentum continued to be fueled by the core business,
particularly in the EMEA region. Activity is underpinned by a solid
and diversified customer portfolio and by the Services business,
back to standard levels since the second half of 2021.
At the same time, while not returning to the exceptional highs
of 2019, the Group continued to sign major contracts. Thus,
first-quarter sales were bolstered by the resumption of deliveries
of Schaerer machines to Luckin Coffee in China.
The Hotel equipment business, which has a lesser impact on
revenue, also achieved a significant rebound in revenue in the
first quarter.
OPERATING RESULT FROM ACTIVITY (ORfA)
It is worth mentioning that the first quarter is not
representative of the full-year performance, primarily due to the
seasonal nature of the business.
The Group reported Operating Result from Activity (ORFA) of
€140m in first-quarter 2022, including a currency effect of
-€32m. Hence, on a like-for-like basis, ORFA stood at €172m for the
three months, vs a record-high €198m at end-March 2021. As a
reminder, ORFA in first-quarter 2020 was an extremely low €18m.
This three-year trend in operating profitability reflects the very
unusual nature of business activity over the period.
Operating margin for the quarter stood at 7.3% (9.2% LFL) and
stemmed primarily from:
- gross margin holding up firm, as the price increases
implemented in late 2021 and a constantly improved product mix
served to offset additional costs for raw materials and freight,
which were still limited in first-quarter 2021;
- A €50m increase in investments in growth drivers
(innovation, marketing and advertising) and commercial expenses,
accounting in total for 260 basis points.
DEBT AT MARCH 31, 2022
At March 31, 2022, the Group’s financial debt amounted to
€1,845m (of which €339m in IFRS 16 debt) compared with €1,465m
at March 31, 2021 (with IFRS 16 debt of €332m).
The change in net debt came to a very large extent from the
increase in the working capital requirement resulting from the
policy of high inventories rolled out by the Group to address
persistent supply-chain issues and bring its customers the best
possible service.
The Group’s medium-long term debt is essentially at fixed
rates.
Our financial situation is healthy and based on a
well-balanced financial structure in terms of instruments and
maturities. In this respect, the Group issued a new Schuldschein in
December 2021 for €350m and renewed its syndicated credit line for
€990m. These transactions have lengthened the average maturity of
the Group’s debt, enabling it to benefit from highly attractive
financing conditions.
OUTLOOK
The Group is highly cautious regarding the geopolitical and
sanitary situation. It is implementing all the measures required to
adapt to the evolution of the international economic climate.
In this context, Groupe SEB maintains for 2022 its ambition of
growth in sales and increase in Operating Result from Activity,
with the assumption of a gradually improving environment and the
leveraging of our innovation dynamic and commercial strength.
Convinced of the structurally promising nature of our Consumer
and Professional markets, we are confident in our capacity to
continue reinforcing our positions worldwide.
GLOSSARY
On a like-for-like basis (LFL) – Organic
The amounts and growth rates at constant exchange rates and
consolidation scope in a given year compared with the previous year
are calculated:
- using the average exchange rates of the previous year for the
period in consideration (year, half-year, quarter)
- on the basis of the scope of consolidation of the previous
year.
This calculation is made primarily for sales and Operating
Result from Activity.
Operating Result from Activity (ORFA)
Operating Result from Activity (ORFA) is Groupe SEB’s main
performance indicator. It corresponds to sales minus operating
expenses, i.e. the cost of sales, innovation expenditure (R&D,
strategic marketing and design), advertising, operational marketing
as well as sales and marketing expenses. ORFA does not include
discretionary and non-discretionary profit-sharing or other
non-recurring operating income and expense.
Adjusted EBITDA
Adjusted EBITDA is equal to Operating Result from Activity minus
discretionary and non-discretionary profit-sharing, to which are
added operating depreciation and amortization.
Free cash flow
Free cash flow corresponds to adjusted EBITDA, after accounting
for the change in the operating capital requirement, recurring
investments (CAPEX), taxes and financial expense, as well as other
non-operational items.
Net financial debt
This term refers to all recurring and non-recurring financial
debt minus cash and cash equivalents, as well as derivative
instruments linked to Group financing. It also includes debt from
application of the IFRS 16 standard “Lease contracts” in addition
to short-term investments with no risk of a substantial change in
value but with maturities of over three months.
Loyalty program (LP)
These programs, run by distribution retailers, consist in
offering promotional offers on a product category to loyal
consumers who have made a series of purchases within a short period
of time. These promotional programs allow distributors to boost
footfall in their stores and our consumers to access our products
at preferential prices.
This press release may contain certain forward-looking
statements regarding Groupe SEB’s activity, results and financial
situation. These forecasts are based on assumptions which seem
reasonable at this stage, but which depend on external factors
including trends in commodity prices, exchange rates, the economic
climate, demand in the Group’s large markets and the impact of new
product launches by competitors. As a result of these
uncertainties, Groupe SEB cannot be held liable for potential
variance on its current forecasts, which result from unexpected
events or unforeseeable developments. The factors which could
considerably influence Groupe SEB’s economic and financial result
are presented in the Annual Financial Report and Universal
Registration Document filed with the Autorité des Marchés
Financiers, the French financial markets authority. The balance
sheet and income statement included in this press release are
excerpted from financial statements consolidated as of December 31,
2021, examined by SEB SA’s Statutory Auditors and approved by the
Group’s Board of Directors, dated February 24, 2022. The audit
procedures on these consolidated financial statements have been
performed. The certification report is currently being issued
Conference with management on April 28, 6:00
p.m. CET
Click here
to access the live webcast (in English)
Replay available on our website on April 28
from 8:00 p.m. CET at www.groupeseb.com
Access (audio only): From France: +33 (0)1 7037
7166 – Password: SEB From abroad: +44 (0) 33 0551 0200 – Password:
SEB
Upcoming events – 2022
May 19 | 3:00 p.m.
Annual General Meeting
July 21 | before market opens
H1 2022 sales and results
October 24 | after market closes
9-month 2022 sales and financial
data
Find us on www.groupeseb.com
World reference in small domestic equipment, Groupe SEB operates
with a unique portfolio of 30 top brands including Tefal, Seb,
Rowenta, Moulinex, Krups, Lagostina, All-Clad, WMF, Emsa, Supor,
marketed through multi-format retailing. Selling more than 360
million products a year, it deploys a long-term strategy focused on
innovation, international development, competitiveness, and client
service. Present in over 150 countries, Groupe SEB generated sales
of €8 billion in 2021 and has more than 34,000 employees
worldwide.
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Investor/Analyst Relations
Groupe SEB Financial Communication and IR Dept
Isabelle Posth Raphaël Hoffstetter
comfin@groupeseb.com
Tel.: +33 (0) 4 72 18 16 04
Media Relations
Groupe SEB Corporate Communication Dept
Cathy Pianon Anissa Djaadi
com@groupeseb.com
Tel. + 33 (0) 6 33 13 02 00 Tel. + 33 (0) 6 88 20 90
88
Image Sept Caroline Simon Claire Doligez
Isabelle Dunoyer de Segonzac
caroline.simon@image7.fr cdoligez@image7.fr
isegonzac@image7.fr
Tel.: +33 (0) 1 53 70 74 70
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