PRESS RELEASE
Maisons du Monde: FULL-YEAR 2016 RESULTS
Excellent 2016 performance
Strong customer sales growth and improved profitability
Growth targets confirmed for 2017-2020
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· Customer sales up 26.1% year-on-year to €881.8 million, with strong like-for-like customer sales growth of 14.7%
· 26 net store openings, including 16 stores outside France
· Successful rollout of omnichannel strategy, with 19% of customer sales online
· EBITDA up 30.0% year-on-year to €122.8 million; EBITDA margin at 13.9%
· Adjusted net income of €39.9 million
· Stronger financial structure; leverage ratio of 1.8 x
· Recommended dividend of €0.31 per share
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Nantes, March 6, 2017,
Maisons du Monde (Euronext Paris: MDM, ISIN Code: FR0013153541), a European leader in affordable and inspirational decoration and furniture homeware, today announces its results for the year ended December 31, 2016.
Gilles Petit, Chief Executive Officer of Maisons du Monde, commented:
"Maisons du Monde delivered an excellent performance in 2016, with double-digit growth in customer sales across all businesses and regions, improved profitability and a record number of new store openings.
These strong results confirm the strength of our business model and omnichannel strategy, based on a regularly renewed selection of furniture and decorative items, selective expansion of our international and French store network, and strong synergies between our store network and our online business.
During the year, we put in place enhanced commercial and operating measures to allow us to further build on our strong fundamentals and reinforce our profitable growth model.
Well positioned for the future, we plan to remain ahead of the plan announced at the time of the IPO and we are confident of meeting our mid-term growth targets".
Continued strong customer sales growth momentum
Customer sales amounted to €881.8 million in 2016, up 26.1% compared to 2015, reflecting well-balanced growth spread across all product categories, retail channels and regions.
Thanks to its unique business model, Maisons du Monde confirmed its ability to gain market share in 2016, recording a 14.7% rise in like-for-like customer sales, significantly outperforming its benchmark market index. The Group also continued to expand its store network, with net openings of 26 stores over the period, including 16 stores outside France. At December 31, 2016, Maisons du Monde operated 288 stores, of which 203 in France and 85 outside France.
2016 also confirmed the success of the Group's collections of decorative items and furniture, and of the omnichannel strategy with the rollout of free in-store delivery and the store digitalization program.
Positive impact of operating leverage on profitability
EBITDA totaled €122.8 million in 2016, up 30.0% compared to 2015, driven by strong customer sales growth over the period. The resulting improvement in operating leverage contributed to a 40-bps increase in the EBITDA margin, up to 13.9% in 2016 from 13.5% in 2015. Margin growth takes account of the initiatives and measures needed to support the growth of the Group's omnichannel business model going forward.
EBIT was up 34.8% year on year to €93.2 million, fueling a 70-bps rise in the EBIT margin for the period, up to 10.6%.
Stronger financial structure
Net debt stood at €225.7 million at December 31, 2016, with a leverage ratio[1] of 1.8 x compared to 2.6 x at December 31, 2015.
The Group's refinancing transactions at the time of its IPO reduced annual finance costs from around €30 million[2] (previous financing structure) to less than €7 million as from June 1, 2016.
In addition, the cost of the Group's financing is set to fall from 2.25% to 1.5% with effect from June 1, 2017.
Dividend
In line with the targets announced at the time of the IPO, the Board of Directors has decided to ask shareholders to approve a cash dividend of €0.31 per share, representing a payout ratio of 35% based on Group adjusted net income of €39.9 million, taking into account:
· Restatement of non-recurring expenses relating to the IPO and to the Group's refinancing transactions, amounting to €47.7 million[3];
· Restatement of the cost of net debt arising on the Group's previous financing structure over the period from January to May 2016, amounting to €29.9 million[4];
· Including 12-month pro forma finance costs relative to the Group's new financing structure;
· Application of a normative corporate income tax rate of 36%.
Outlook
Going forward, Maisons du Monde will leverage its strong fundamentals to pursue its profitable growth momentum:
· A unique range of in-house designed decorative items and furniture, at affordable prices, covering new trends and styles;
· A distinctive business model combining a design-to-cost process with centralized and effective merchandising to ensure a high level of gross margin;
· A systematic omnichannel approach drawing on a winning combination of international stores, online sales and catalogs.
In 2017, the Group intends to step up initiatives focused on customer relationship management and social networks (data and CRM), while maintaining its operational goal of constantly enhancing the customer experience.
Maisons du Monde confirms its 2017-2020 growth targets
· Annual customer sales growth of 12%-14%;
· Above-market like-for-like growth;
· 25-30 net store openings per year;
· EBITDA margin above 13% of customer sales.
Events after the reporting period
On March 1, 2017, Maisons du Monde signed a new revolving credit facility for €75 million with the same terms and conditions as those negotiated at the time of its May 2016 refinancing. This gives the Group added financial flexibility and ensures that it will be able to leverage opportunities to accelerate the expansion of its store network.
Additional information
The Board of Directors of Maisons du Monde met on Friday March 3, 2017 to approve the Group's consolidated results for 2016. The audit procedures are being finalized.
Fourth-quarter 2016 customer sales[5]
| Three months ended December 31 | |||
| In € millions | Q4 2015 | Q4 2016 | % change |
| Customer sales by geography | |||
| France | 152.4 | 179.9 | +18.1% |
| International | 79.6 | 108.2 | +35.9% |
| Total | 232.0 | 288.1 | +24.2% |
| Customer sales by product category | |||
| Decoration | 150.2 | 189.6 | +26.2% |
| Furniture | 81.8 | 98.6 | +20.5% |
| Total | 232.0 | 288.1 | +24.2% |
| Customer sales by distribution channel | |||
| Stores | 197.2 | 238.7 | +21.0% |
| Online | 34.8 | 49.4 | +42.1% |
| Total | 232.0 | 288.1 | +24.2% |
Full-year 2016 customer sales5
| Year ended December 31 | |||
| In € millions | 2015 | 2016 | % change |
| Customer sales by geography | |||
| France | 460.2 | 563.7 | +22.5% |
| International | 239.2 | 318.1 | +33.0% |
| Total | 699.4 | 881.8 | +26.1% |
| Customer sales by product category | |||
| Decoration | 394.5 | 499.8 | +26.7% |
| Furniture | 304.9 | 382.1 | +25.3% |
| Total | 699.4 | 881.8 | +26.1% |
| Customer sales by distribution channel | |||
| Stores | 578.8 | 712.7 | +23.1% |
| Online | 120.6 | 169.1 | +40.2% |
| Total | 699.4 | 881.8 | +26.1% |
Key full-year 2016 financial metrics5
| Year ended December 31 | |||
| In € millions | 2015 | 2016 | % change |
| Customer sales | 699.4 | 881.8 | +26.1% |
| % like-for-like change | +8.7% | +14.7% | - |
| Gross margin | 474.1 | 591.7 | +24.8% |
| As a % of customer sales | 67.8% | 67.1% | (70)bps |
| EBITDA | 94.5 | 122.8 | +30.0% |
| As a % of customer sales | 13.5% | 13.9% | +40bps |
| EBIT | 69.1 | 93.2 | +34.8% |
| As a % of customer sales | 9.9% | 10.6% | +70bps |
| Net income | (13.9) | (12.0) | +14.0% |
| Adjusted net income | n/a | 39.9 | - |
| Net debt | 246.8 | 225.7 | (8.5)% |
| Leverage ratio (x) | 2.6 x | 1.8 x | (0.8) |
Simplified consolidated income statement5
| Year ended December 31 | ||
| In € millions | 2015 | 2016 |
| Customer sales | 699.4 | 881.8 |
| Current operating profit before other operating income and expenses | 65.5 | 68.5 |
| Other operating income and expenses | (0.6) | (22.5) |
| Operating profit / (loss) | 64.8 | 46.0 |
| Financial profit / (loss) | (70.7) | (71.8) |
| Share of profit / (loss) of equity-accounted investees | 0.1 | 0.9 |
| Profit / (loss) before income tax | (5.8) | (24.8) |
| Income tax | (8.2) | 12.8 |
| Profit / (loss) for the period | (13.9) | (12.0) |
| Adjusted profit / (loss) for the period | n/a | 39.9 |
Reconciliation of EBITDA5
| Year ended December 31 | |||
| In € millions | 2015 | 2016 | |
| Current operating profit before other operating income and expenses | 65.5 | 68.5 | |
| Depreciation, amortization and allowance for provisions | 25.4 | 29.7 | |
| Fair value - derivative financial instruments | (2.7) | 20.6 | |
| Management fees | 2.9 | 0.8 | |
| | |||
| EBITDA before pre-opening expenses | 91.1 | 119.6 | |
| Pre-opening expenses | 3.4 | 3.2 | |
| EBITDA | 94.5 | 122.8 | |
Reconciliation of adjusted net income5
| Year ended | ||
| In € millions | Dec-31, 2016 | |
| Profit / (loss) for the period | (12.0) | |
| Fees related to IPO and refinancing | 47.7 | |
| Cost of former financing from Jan. to May 2016 | Interest on high yield bond | 13.3 |
| Interest on loans, including RCF | 0.8 | |
| Interest on PECs | 15.8 | |
| Total | 29.9 | |
| Cost of new financing from Jan. to May 2016 | Interest on term loan | (2.6) |
| Interest on loans, including RCF | (0.4) | |
| Total | (3.0) | |
| Others | (0.3) | |
| Adjusted profit / (loss) before income tax | 62.3 | |
| Income tax (normative tax rate: 36%) | (22.4) | |
| Adjusted profit / (loss) for the period | 39.9 | |
| Dividend | Payout ratio (%) | 35% |
| Distributed amount | 14.0 | |
| Dividend per share (€) | 0.31 | |
Key operating metrics
Besides the financial indicators set out in International Financial Reporting Standards (IFRS), Maisons du Monde's management uses several key metrics to evaluate, monitor and manage its business. The non-IFRS operational and statistical information related to Group's operations included in this press release is unaudited and has been taken from internal reporting systems. Although none of these metrics are measures of financial performance under IFRS, the Group believes that they provide important insight into the operations and strength of its business. These metrics may not be comparable to similar terms used by competitors or other companies.
· Customer sales: Represent the revenue from sales of decorative products and furniture through stores, mobile applications and websites, as well as B2B activities. They mainly exclude delivery charges and revenue for logistics services provided to third parties. The Group uses the concept of "customer sales" rather than total revenue to calculate like-for-like growth, gross margin, EBITDA margin and EBIT margin.
· Like-for-like customer sales growth: Represents the percentage change in customer sales from the Group's retail stores, online sales platforms and B2B activities, net of product returns between one financial period (n) and the comparable preceding financial period (n-1), excluding changes in customer sales attributable to stores that opened or were closed during either of the comparable periods. Customer sales attributable to stores that closed temporarily for refurbishment during any of the periods are included.
· Gross margin: Is defined as customer sales minus cost of sales. Gross margin is also expressed as a percentage of customer sales.
· EBITDA: Is defined as current operating profit before other operating income and expenses, excluding (i) depreciation, amortization and allowance for provisions, (ii) the change in the fair value of derivative financial instruments, (iii) pre-IPO management fees paid to the controlling shareholders, and (iv) store pre-opening expenses.
· EBIT: Is defined as EBITDA after depreciation, amortization and allowance for provisions.
· Net debt: Is defined as the Group's tem loan, revolving credit facility, finance lease debt, deposits and bank borrowings, net of cash and cash equivalents.
· Leverage ratio: Is defined as net debt divided by EBITDA.
2017 financial calendar[6]
May 2, 2017 - First-quarter 2017 customer sales (after market close)
May 19, 2017 - Annual general meeting
July 27, 2017 - First-half 2017 results (after market close)
October 26, 2017 - Third-quarter 2017 customer sales (after market close)
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Disclaimer: Forward Looking Statement
This press release contains certain statements that constitute "forward-looking statements", including but not limited to statements that are predictions of or indicate future events, trends, plans or objectives, based on certain assumptions or which do not directly relate to historical or current facts. Such forward-looking statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the future results expressed, forecasted or implied by such forward-looking statements. Accordingly, no representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Any forward-looking statements included in this press release speak only as of the date hereof, and will not give rise to updates or revision. For a more complete list and description of such risks and uncertainties, refer to Maisons du Monde's filings with the French Autorité des marchés financiers.
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About Maisons du Monde
Maisons du Monde is a creator of inspirational lifestyle universes in the homeware industry, offering distinctive and affordable decoration and furniture collections that showcase multiple styles. The Group develops its business through an integrated and complementary omnichannel approach, leveraging its international network of stores, websites and catalogs. The Group was founded in France in 1996 and has profitably expanded across Europe since 2003. The Group reported customer sales of €882 million and EBITDA of €123 million for the year ended December 31, 2016. In 2016, the Group operated 288 stores in seven countries including France, Italy, Spain, Belgium, Switzerland, Germany, and Luxembourg, and derived over 36% of its sales from outside France. The Group has also built a successful complementary and comprehensive online shopping website, sales from which grew 37% per year on average between 2010 and 2016. The website is available in eleven countries: the seven countries where the Group operates stores plus Austria, the Netherlands, Portugal and the United Kingdom. In 2016, online sales represented 19% of the Group's customer sales.
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Contacts
| Investor Relations | Press Relations |
| Laurent Sfaxi - +33 2 51 71 52 07 | Eloi Perrin (Publicis Consultants) - +33 1 44 82 46 36 |
| lsfaxi@maisonsdumonde.com | eloi.perrin@consultants.publicis.fr |
[1] Net debt divided by EBITDA.
[2] Excluding interest on preferred equity certificates
[3] Including cost of the IPO (€11.4m), early repayment fees on the former high yield bond (€19.6 million) and residual issuance fees on the former high yield bond and revolving credit facility (€16.7 million).
[4] Including interest on preferred equity certificates (€15.8 million).
[5] The audit procedures are being finalized.
[6] Indicative timetable.
