2018 First quarter
Press release - Paris, April 26, 2018
STRONG start to the year with +15.8% sales growth[1]
Commenting on the report, Daniel Lalonde, SMCP's Chief Executive Officer, stated: "We are very pleased with this strong start to the year, including the outstanding performance in both Asia and the Americas, which demonstrates the relevance of our business model as well as the ever-growing desirability of our brands. Overall, these results have been achieved thanks to the work of our talented and committed teams across the globe. With this strong performance, we are on track to achieve our 2018 full-year guidance."
| € million except % | Q1 2017 | Q1 2018 | Sales growth constant currency | Reported sales growth |
| Sales by region | ||||
| France | 99.1 | 99.8 | +0.7% | +0.7% |
| EMEA[2] | 64.5 | 71.9 | +13.3% | +11.5% |
| Americas | 25.9 | 29.3 | +29.5% | +12.9% |
| APAC[3] | 35.7 | 51.0 | +54.1% | +42.8% |
| Sales by Brand | ||||
| Sandro | 111.7 | 124.7 | +15.9% | +11.7% |
| Maje | 85.5 | 95.6 | +16.0% | +11.8% |
| Claudie Pierlot | 28.0 | 31.7 | +14.1% | +13.1% |
| TOTAL | 225.3 | 252.0 | +15.8% | +11.9% |
2018 FIRST-QUARTER SALES
In the first quarter of 2018, consolidated sales reached €252.0 million, up +15.8% at constant currency. Reported sales were up +11.9%, including a -3.9pts impact of exchange rates, mainly due to the US dollar and the Chinese currencies.
Very strong international growth and meaningful market share gains in France
In France, the Group continued to gain meaningful market share thanks to the strong desirability of the three brands, with sales up +0.7%, in a declining market impacted by adverse weather conditions and a drop in tourism spending.
In EMEA1, the Group posted strong growth across all strategic markets with sales up +13.3% at constant currency despite adverse weather conditions and a drop in tourism spending. The Group continued to achieve strong success in all key strategic markets.
In the Americas, the excellent performance at +29.5% at constant currency across both Sandro and Maje was mainly driven by digital's acceleration and successful in-store activation.
In APAC2, sales growth was outstanding at +54.1% at constant currency thanks to strong domestic demand for all three brands, digital sales acceleration and some shifts in Chinese tourism trends from Europe to Asia.
Double-digit growth across all brands
Sandro generated a strong performance at +15.9% at constant currency reflecting the strong success of the collections, as well as a good momentum on men, Digital and accessories, notably with the launch of the new "flames" sneakers. Over the last twelve months, Sandro opened +45 POS, mostly located in Asia and Europe, such as the recent dual genders Pacific Place store in Hong Kong. Sandro also carried out several key refurbishments such as the Francs Bourgeois store in Paris.
Maje posted a +16.0% growth at constant currency with +37 net openings over the last twelve months, including the prestigious Carrousel du Louvre store in Q1 18 which offers a strategic location in Paris. Maje benefitted from its 20th anniversary to increase its visibility through in-store activation, marketing and press coverage, as well as the continued expansion of Digital.
Lastly, Claudie Pierlot grew by +14.1% at constant currency thanks to growing awareness through successful capsule collections, Ile de Ré and the optimization of Digital Media, as well as accessories' development. Over the last twelve months, the brand opened +15 POS, like a new free-standing store in Palma de Mallorca in Q1 18.
2018 GUIDANCE CONFIRMED
SMCP will continue to roll out its long-term strategy, leveraging all its growth levers. This includes like-for-like growth, growing its core business, accelerating accessories, men and digital as well as store expansion in strategic international markets.
As a retail pure player, supported by a unique execution model blending the codes of luxury and fast fashion, SMCP is well-positioned to capture growth and pursue market share gains.
For 2018, SMCP anticipates another year of profitable growth, targeting a sales growth between +11% and +13% at constant currency. SMCP also foresees a continued expansion of its Adjusted EBITDA margin to around 17%.
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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 at December 31 for the year N in question).
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. These charges were nil in 2016 and amounted to €1.9 million in 2017.
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.
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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.
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ABOUT SMCP
SMCP is a global player in the apparel and accessories market with three distinct contemporary Parisian fashion brands, Sandro, Maje and Claudie Pierlot. End of 2017 SMCP brands are present in more than 1,300 points of sales in 38 countries. 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 was founded in 1984 by Madame Claudie Pierlot, and acquired by SMCP in 2009. SMCP is listed on the regulated market of Euronext Paris (compartment A, ISIN Code FR0013214145, ticker: SMCP).
Investors contact Press contact
celia.deverlange@smcp.com Brunswick - Hugues Boëton
pauline.roubin@smcp.com +33 (0) 1 53 96 83 83
smcp@brunswickgroup.com
DISCLAIMER: FORWARD-LOOKING STATEMENTS
Certain information contained in this document may include projections and forecasts. These projections and forecasts are based on SMCP management's current views and assumptions. Such 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.
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 affiliates representatives shall bear any liability (in negligence or otherwise) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
For more information regarding these factors, risks and uncertainties, please refer to the information contained in the documents filed with the French Financial Markets Authority (Autorité des Marchés Financiers - AMF) as part of the regulated information disclosure requirements and available on SMCP's website (www.smcp.com).
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FINANCIAL CALENDAR
A conference call to investors and analysts will be held 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.
[1] At constant currency
[2] 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).
[3] APAC includes the Group's Asia-Pacific operations (mainly Mainland China, Hong Kong, South Korea, Singapore, Thailand and Australia).
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