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Showroomprive.com
Showroomprive.com: 2018 ANNUAL RESULTS - SHOWROOMPRIVE CONFIRMS ITS GROWTH
AND RECOVERS ITS PROFITABILITY
18-March-2019 / 23:30 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
2018 ANNUAL RESULTS
SHOWROOMPRIVE confirmS ITS GROWTH AND RECOVERS ITS PROFITABILITY
La Plaine Saint Denis, 13th March 2019 - Showroomprivé, a leading European
online retailer specializing in fashion for the Digital Woman, publishes its
annual results for the fiscal year ending 31 December 2018.
· *By means of a more selective approach, Showroomprivé pursues its
strategy of sustainable growth. *
· *Continued growth since the 2ndquarter, with revenues increasing
year-on-year by 3% (+3% in the 4th quarter).*
· *5% growth over the year in internet activity, its core business (+8% in
the 4thquarter).*
· *Net recovery of profitability in the 2ndsemester, led by a gross margin
that increased by 1.7 points to 37.4% and a strengthened control on
operational expenditures. *
· *The Group is focused on the execution of the "Performance 2018-2020"
plan, the first effects of which are materializing one quarter after the
other, this notwithstanding a year-end that exhibits a lacklustre consumer
climate. *
· *These actions all fall within a context of increasing loyalty of the
members and of the partner brands of the Group, which confirm the
relevance of the model. *
· *Speedy and important progress has been achieved in the framework of the
development of the partnership with Carrefour and will ambitiously
continue onward in 2019.*
· *In 2019, the priority of the Group remains that of pursuing its
strategy of selective growth and renewal with profitability more in line
with historical levels. *
KEY FIGURES 2018
(EUR millions) 2017 2018 % Growth H2 2017 H2 2018 % Growth
Net revenues 655.0 672.2 2.6% 348.8 356.8 2.3%
Total Internet 629.9 658.5 4.5% 332.3 351.5 5.8%
revenues
EBITDA 13.1 5.1 -60.8% 2.2 5.9 172.1%
EBITDA as % of 2.0% 0.8% -1.2 pt 0.6% 1.7% 1.1 pt
revenues
Net income -5.2 -4.4 16.8% -5.0 2.1
When commenting on these results, Thierry Petit and David Dayan, Co-founders
and Co-CEO's of Showroomprivé have declared:
"The year 2018 has been a pivotal year for Showroomprivé, since, in line
with our strategic plan launched in the first half of the year, we have
decided to clearly refocus our expansion around two main areas: a selective
growth that is strengthened by focusing on an improved operational
efficiency and the long-term reinforcement of our profitability, with an
overall control of our cost structure and the significant upturn of our
gross margin. Being henceforth backed up by enhanced capital, thanks to the
complete success of the increase in capital supported by the reference
shareholders, amongst which Carrefour, and completed at year end,
Showroomprivé takes on 2019 with confidence and ambition. A new chapter is
being written. We are very determined to carry the business to the utmost of
its wonderful potential".
2018 HIGHLIGHTS
The year 2018 has been fully dedicated to a refocusing on operational
priorities through the execution of the "Performance 2018-2020" plan, the
effects of which, ongoing since the 2nd quarter, confirm the diagnosis
carried out by the management of the Group.
1) Some first effects of the "Performance 2018-2020" plan which are
already visible over the year:
· The business has been able to move forward, in parallel, along two major
axes:
· Improvement of its margin, and
· Pursuit of a solid and lasting growth since the end of the first
quarter of 2018
· The improvement of the margin has been ongoing notwithstanding a higher
degree of commercial selectivity, a reduction in firm sales, and a
financial context at year end disrupted by social unrest which affected
the French economic performance of the last quarter.
· The SRP Group has nonetheless maintained an overall growth over the
year of close to 3%, and even 5% for its internet business, its core
business, thanks to the dynamics launched in the second quarter of 2018.
· Net rebound of the gross margin in the 2nd semester, with an increase of
1.7 points when compared to the same period of last year and of 2.4 points
when compared to the 1st semester.
· Control of operating expenses with general and administrative expenses
declining by close to half a million euros in the 2nd semester compared to
the 1st semester.
· Almost 6 million euros in EBITDA generated in the 2nd semester.
2) Confirmation of the attractiveness of the value of the Group
· The community of Showroomprivé members is ever more numerous and loyal:
· Continuation of good recruitment dynamics with 1.1 million new buyers
for 2018
· Ever stronger commitment of our members, with 82% of revenue generated
by regular buyers (+4 points vs. 2017) and a revenue per buyer increasing
by close to 4%
· Sustained satisfaction with a repeat purchase intention rate of close to
90%
· A long-term relationship with partner brands:
· 89% of revenues generated by the loyal brands of the Group
· A distribution channel which is growing, borne by the satisfaction of
our partners (revenues generated by the Top 20 increasing by 59% in
2018)
3) Major progress in the framework of the partnership with Carrefour
· Click-and-collect: confirmation of a preferential rate of EUR1.99 for
the year; close to 2000 points were open at year-end 2018; with an
objective of 3000 points for year-end 2019
· Progress in the advancement of our cross-marketing initiatives
· Launch of the first common data campaigns are foreseen in the first
half-year of 2019, in the framework of the increase in power of SRP Media
· Continuation of consideration relating to sourcing (development of the
offering of wines & spirits using drop shipments, considerations
surrounding Carrefour's own brands)
4) The success of the share capital increase, by a net amount of 39.5
million euros, confirms the renewed confidence of the shareholders, in
particular of Carrefour, and allows for the increase in the financial
flexibility of the Group in the framework of implementation of the
"Performance 2018-2020" plan.
· The increase in capital has also permitted financing of the purchase of
40% of the capital of the company Beautéprivée which is not yet held by
Showroomprivé, in view of reinforcing the leadership position of the Group
in the beauty and well-being field, with a strong potential for growth and
complementary to the fashion sector which is the traditional mooring of
the Group.
· This increase has moreover allowed the financing of the remaining part
of the logistics investment announced in March 2018, allowing for the
partial insourcing of logistics and thus the generation of gains in
productivity. The appreciation expected of this logistics plan is
estimated at approximately 4 million euros in EBITDA in 2020.
PERSPECTIVES FOR 2019
The Group reaffirms its desire to prioritise the pursuit of solid growth
that is both sustainable and profitable, particularly by leveraging its
partnerships with brands and its members. This rests on the pursuit for
reinforcement of operational efficiency and the development of new growth
opportunities, initiated within the framework of the "Performance 2018 -
2020" plan.
1) Strong levers for improvement of profitability
The Group thereby confirms the priority given to a speedy renewal with
levels of profitability more in line with historic levels, by acting on the
following levers:
· Improvement of gross margin
· Selectivity and maintained requirements as regards purchase conditions
· Operational improvement of the processing of returns
· Development of SRP Media
· Optimisation of firm purchases
· Concentration of efforts on key geographic areas
· Closing of B2C business in Germany, Poland and multi-currency sites
· Plan for savings and productivity gains of between 8 and 10 million
euros by 2020.
· Strict control of operating expenses
· Simplification of the organisation and productivity gains
· Optimisation of the marketing expenditures
· Finalisation of the logistics investment (allowing for the partial
insourcing of logistics and to thus generate productivity gains and cost
savings, with a positive impact on the EBITDA of approximately 4 million
euros by 2020)
2) New opportunities for growth and margin in the medium term, supported
by the strategic priorities of the Group
The Group will pursue the development of its three strategic medium term
axes which were divulged in the framework of the "Performance 2018-2020"
plan
· Continuation of SRP Media development and strong acceleration of Data
monetisation
· Partnership with Carrefour that is rich in future achievements and
projects
· On-time start-up of the mechanised warehouse in Q3 2019 allowing for the
insourcing of a part of the logistics flows of the Group.
Thomas Kienzi, CFO, has shared his decision to pursue other projects and to
leave the business following the publication of 2018 annual results. SRP
Group and its founders thank him for the quality of the work accomplished
and for his total commitment over the last four years. A recruitment process
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