Maisons du Monde: FY2023 results and Medium-Term Transformation
Plan 2024-2026
PRESS RELEASENantes, 12 March
2024
FY2023 Results: Adjusted guidance fully
met across all criteria
- 3C plan produced tangible
results
- Customer focus
initiatives allowing for sales sequential improvement H2 vs
H1
- Cost reduction
resulting in circa €35 million in gross
savings on SG&A and logistics costs
- Strict Cash control
streamlining Capex by 50% and reducing inventory
by €43 million whilst improving product
availability
- Significant progress on our
ESG roadmap
- Reduction of our carbon
intensity1 by 18% vs
2018
- 36% of the Good is
beautiful selection in Maisons du Monde's offering in 2023
- Selected Climate Change “A
List” company by CDP (Carbon Disclosure Project)
- FY 2023 adjusted guidance
fully met across all criteria
- Group Sales: -9.3% yoy at
€1,125 million vs c. -10% adjusted guidance
- EBIT: €45.8
million vs adjusted guidance €40m-€50m
- FCF: €27.4 million
vs adjusted guidance €20m-€30m
- Payout ratio of 30% consistent
with range announced in October,amounting to €0.06
dividend per share, to be submitted at the General Meeting on 21
June
Inspire
everyday2024-2026 Transformation Plan
François-Melchior de Polignac, CEO of Maisons du Monde
commented:
"Maisons du Monde’s 2024-2026 transformation
plan, ‘Inspire everyday’ is backed by an enriched
and highly engaged Board, and is being undertaken by a renewed
executive team, and our committed associates. By focusing on
customer needs and operational excellence, we are laying the
groundwork for sustainable profitable growth. With a strong focus
on simplification and financial discipline, we are increasing cash
returns. Over this three-year journey, Maisons du Monde will
transition into a more asset-light operator and evolve further into
a lifestyle brand. This shift will improve returns on capital
employed and enhance shareholder value.”
- A pragmatic
transformation already under way, leveraging Maisons du Monde’s
unique assets, fixing customer centricity and execution challenges,
and resolutely focusing on cash returns with a shift towards an
asset-light approach
- Structurally
optimizing our commercial model to better meet customer
needs:Net reduction of assortment by 25%
- Simplifying
our operating model to unlock value creation:
Streamline supplier portfolio by 50%
- Challenging
100% of our costs to reinvest in our
development:€85 million gross cost
savings2 over 3
years
- Reducing
capital intensity with a more balanced and optimized
footprint: 40-50 store closures/transfers and circa 30% of
the network under affiliation/franchise by 2026
- 2024-2026
financial trajectory
- 2024: a
pivotal year to transform the commercial model and lay the
foundations for growth
- Progressive return to topline
growth in 2025-2026
- Cumulative FCF above €100
million over 3 years
VIDEO WEBCAST FOR
INVESTORS AND
ANALYSTS
Presentation in English. Questions by chat from the
webcast platform
Date: 12 March 2024 at 9:30 am CET
Speakers: François-Melchior de Polignac, CEO / Denis Lamoureux,
CFO / Gilles Lemaire, Deputy CFOConnection details: Webcast
link :
https://edge.media-server.com/mmc/p/tvsty332
***
FY 2023 RESULTS
FY 2023 SALES
FY 2023 Group sales reached
€1,125.4 million, reflecting a year-on-year decline of -9.3%,
amidst a low cycle in the Home & furniture market, intensified
by macro headwinds (geopolitical uncertainties, unprecedented
inflation, deteriorated consumer confidence).
|
FY 2023 |
FY 2022 |
%Change |
(in EUR million) |
Group GMV |
1 263.9 |
1 337.1 |
-5.5% |
Sales |
1 125.4 |
1 240.4 |
-9.3% |
Sales by product
category |
|
|
|
Decoration |
648.2 |
719.8 |
-9.9% |
% of sales |
57.6% |
58.0% |
|
Furniture |
477.2 |
520.6 |
-8.4% |
% of sales |
42.4% |
42.0% |
|
Sales by
channel |
|
|
|
Stores |
815.7 |
880.9 |
-7.4% |
% of sales |
72.5% |
71.0% |
|
Online |
309.6 |
359.6 |
-13.9% |
% of sales |
27.5% |
29.0% |
|
Sales by
geography |
|
|
|
France |
622.9 |
663.8 |
-6.2% |
% of sales |
55.3% |
53.5% |
|
International |
502.5 |
576.6 |
-12.9% |
% of sales |
44.7% |
46.5% |
|
The Group continued its proactive store
portfolio management. At the end of December 2023, the store
portfolio reached 340 own stores following 18 net closures o/w 5
transfers to affiliates, as anticipated.
FY 2023 FINANCIAL
PERFORMANCE
EBIT
In € million |
2023 |
2022 |
%Change |
Sales |
1,125.4 |
1,240.4 |
-9.3% |
Cost of goods sold |
(399.6) |
(437.9) |
-8.7% |
Gross margin |
725.8 |
802.5 |
-9.6% |
As a % of Sales |
64.5% |
64.7% |
|
Store operating and central costs |
(382.8) |
(415.9) |
-8.0% |
Logistics costs |
(135.5) |
(159.6) |
-15.1% |
Operating Costs |
(518.3) |
(575.5) |
-10.0% |
EBITDA |
207.6 |
227.0 |
-8.6% |
As a % of Sales |
18.4% |
18.3% |
Depreciation, amortization, and allowance for provisions |
(161.8) |
(158.5) |
2.1% |
As a % of Sales |
14.4% |
12.8% |
|
EBIT |
45.8 |
68.5 |
-33.1% |
As a % of Sales |
4.1% |
5.5% |
|
While EBIT was impacted by sales decline,
Gross margin rate remained relatively stable at
64.5%, thanks to savings from normalized freight costs and the
positive contribution from the Marketplace, which were reinvested
in promotional activities, improving price accessibility, and
clearing old inventories.
Store operating and central
costs decreased by 8.0%. 3C plan initiatives on costs have
more than compensated inflation with a €25 million gross savings on
SG&A. Additional savings were driven by lower volumes and
one-time items (e.g. expired gift cards write-off).
Logistics costs decreased by
15.1% as a result of €10 million 3C plan cost optimization
measures. Additional savings were driven notably by efficiently
leveraging lower volumes.
EBITDA margin remained stable
at 18.4% despite loss of volumes, notably as a result of cost
initiatives undertaken within the 3C plan.
Slight increase in Depreciation and
Amortization (D&A) mainly due to the start of
amortization of our second distribution center in Northern
France.
EBIT margin decreased from 5.5%
to 4.1%, impacted by D&A slight increase in a context of sales
decline.
Net income amounted to €8.8
million vs €34.2 million in 2022. EPS was €0.21, compared to €0.80
in 2022.It included:
-
Other operating income and expenses, at €(8.9) million, mainly
related to store closure costs.
-
Net financial result at €(22.3) million vs €(18.2) million in 2022,
mainly due to higher interests on lease debt (€13.5 million vs
€12.4 million in 2022), as well as €0.9 million losses on currency
transactions vs a gain of €1.9 million in 2022.
-
Income tax, representing €5.2 million vs €18.4 million in
2022.
Free Cash
Flow3: Streamlined Capex and
tight inventory management nearly offsetting volume
impact
In € million |
31 Dec. 2023 |
|
31 Dec. 2022 |
EBITDA |
|
207.6 |
227.0 |
Change in working capital |
0.2 |
(2.8) |
Change in other operating items |
(19.1) |
(12.2) |
Net cash
generated by operating
activities |
188.7 |
212.0 |
Capital expenditures (Capex) |
(33.0) |
(66.6) |
Change in debt on fixed assets |
(2.5) |
5.3 |
Proceeds from sale of non-current assets |
1.9 |
0.8 |
Decrease in lease debt |
(114.4) |
(107.3) |
Decrease in lease debt/Lease interest paid |
(13.3) |
(11.8) |
Free cash
flow |
27.4 |
32.3 |
In 2023, Capex reached €33 million representing
a 50% decrease from last year. The implementation of a rigorous
payback approach, coupled with reduced Capex on the second
distribution center, has enabled Maisons du Monde to align with
market standards. Capex on sales ratio decreased from 5.4% in 2022
to 2.9% in 2023.
In terms of working capital requirements,
Maisons du Monde improved its inventory levels, decreasing from
€245.7 million in December 2022 to €202.2 million. This reflects
tight monitoring and old inventory liquidation, with DIO4 lowered
by half a month compared to last year, whilst improving product
availability. Working capital effects were limited due to reduced
purchases.
Thanks to these actions, Free Cash
Flow demonstrated strong resilience, amounting to €27.4
million compared to €32.3 million in December 2022.
Effective management of net financial debt |
In € million |
|
31 Dec. 2023 |
|
31 Dec. 2022 |
Convertible bonds (“OCEANE”) |
- |
195.6 |
Term loan |
100.0 |
(0.5) |
Revolving Credit Facilities (RCFs) |
(1.0) |
(0.7) |
Share buyback |
- |
28.1 |
Other debt |
20.1 |
1.7 |
Gross debt |
119.1 |
224.2 |
Finance leases |
571.0 |
613.1 |
Cash & cash equivalents |
(29.9) |
(121.3) |
Net debt (IFRS
16) |
660.2 |
716.0 |
Less: Lease debt (IFRS 16) |
(571.0) |
(613.1) |
Plus: Lease debt (finance lease) |
1.2 |
2.2 |
Net debt |
90.4 |
105.1 |
LTM (Last twelve months) EBITDA5 |
81.3 |
109.5 |
Leverage |
1.11x |
0.96X |
Maisons du Monde reduced its net debt position
by €15 million compared to 2022. With cash and cash equivalent
totaling €29.9 million, Maisons du Monde’s net debt position as of
31 December 2023 amounted to €90.4 million.
As previously announced, Maisons du Monde repaid
the €200 million “OCEANE” convertible bonds on 6 December 2023.
This repayment was done through a combination of a €100 million
term loan, a €14 million loan from BPI and €86 million in cash.
The Group also increased its RCF credit line
from €150 million to nearly €200 million, with an extended maturity
to April 2028. This credit line is undrawn as of 31 December 2023
and the Group benefits from circa €200 million of liquidity.
GOVERNANCE
As announced on 29 February, 2024, Denis
Lamoureux was appointed Chief Financial Officer. He started his new
role on 4 March and is part of the Executive Committee.Gilles
Lemaire, Group Controlling Director, acting CFO since 1st September
2023, was appointed Deputy Chief Financial Officer.
PROPOSED DIVIDEND
General Meeting is scheduled to be held on 21 June 2024.
Shareholders will be asked to approve the payment of a dividend of
€0.06per share for the 2023 financial year, translating to a 30%
payout ratio. The ex-dividend date is 3 July 2024, with payment on
6 July 2024.
MEDIUM TERM TRANSFORMATION PLAN
Inspire everyday transformation
plan is designed to restore Maisons du Monde’s growth and enhance
FCF generation, leveraging the strong foundations laid by the 3C
Plan, focusing on Customer centricity, and prioritizing operational
excellence (Costs) and financial efficiency (Cash).
This transformation plan is based on two
fundamental pillars that will pave the way for Maison du Monde’s
journey from 2024 to 2026:
-
Driving the transformation of our commercial model to win: rethink
our offer, enhance in-store experience, strengthen growth levers,
notably the Marketplace, and enrich our model with services,
- While
streamlining our operational model: simplify the value chain,
develop “think global/act local” approach to store operations, and
reduce capital intensity.
Over the 2024–2026 period, the Group is
expected to generate a cumulative Free Cash Flow above €100
million.
The FCF generation should increase over the
duration of the plan. We expect positive FCF to continue in 2024,
despite a significant portion of our FCF being reinvested into the
transformation of the Group, and seizing opportunities to
accelerate this transformation.
To secure FCF generation, Maisons du Monde will notably focus
on:
-
Delivering €85 million gross cost savings over 3
years, building upon the €25 million and €35 million plans
of 2022 and 2023
- Reducing capital intensity
with:
- a more standardized Capex on
sales ratio of circa 3%, already achieved in 2023,
representing a notable reduction compared to 2019-2022 period
- further optimizing inventory,
with 1 month reduction of MoH6
- a more balanced and optimized
retail store network:40-50 store closures/transfers and
circa 30% of the network under affiliation/franchise by 2026
Over the three-year period, the Group will maintain its 30%-40%
dividend payout ratio.
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.
Financial calendar
15 May
2024 Q1
2024 Sales
21 June
2024 Annual
General Meeting
29 July
2024 Half-Year
2024 Results
23 October
2024 Q3
2024 Sales
About Maisons du Monde
Maisons du Monde is the leading player in
inspiring, accessible, and sustainable home and decoration. The
Brand offers a rich and constantly refreshed range of furniture and
decorative items in a multitude of styles. Leveraging a highly
efficient omnichannel model and direct access to consumers, the
Group generates over 50% of its sales through its online platform
and operates in 10 European countries.
corporate.maisonsdumonde.com
Contacts
Investor Relations |
Press Relations |
Carole Alexandre Tel: (+33) 6 30 85 12 78 |
Pierre Barbe Tel: (+33) 6 23 23 08 51 |
calexandre@maisonsdumonde.com |
pbarbe@maisonsdumonde.com |
1 In tCO2 by million euros sales2 €145 million gross cost
savings over a five-year span (2022-2026) 3 Free-Cash Flow defined
as Operational cash flow generation after Capex, consistent with
historical financial communication4 Days Inventory Outstanding – in
months of COGS5 EBITDA of €207.6 million is restated in accordance
with the senior credit facility agreement dated April 22, 2022
6 Months of Inventory on Hand
- 2024.03.12 MdM Presse Release_FY23 results and Mid-Term
transformation plan_FOR RELEASE
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