GROUPE SEB: STRONG PERFORMANCE IN 2023 ACQUISITION PROJECT IN THE PROFESSIONAL SEGMENT
- Annual sales: €8,006m; +0.6%, +5.3% LFL1
-
Operating Result from Activity (ORFA): €726m, +17% vs. 2022
- Operating margin: 9.1% (7.8% in 2022)
- Net profit: €386m, + 22% vs. 2022
- Free cash flow of €805m and leverage ratio of 1.8x EBITDA
- Proposed dividend at the General Meeting: €2.62 per share (+6.9% vs. 2022)
- Medium-term ambition: LFL sales CAGR of at least 5% and operating margin toward 11%
- 2024 outlook: operating margin close to 10%
Statement by
"
In the Professional segment, we continued to make gains and reinforced our position as global leader on coffee machines. Parallel to this, we expanded our reach through targeted acquisitions, furthering our ambition to become a leading player in the Professional Equipment market.
Thanks to a robust sales dynamic, a steadily improving gross margin and disciplined cost control, the Group surpassed its initial target for operating result growth. At the end of 2023, our balance sheet and financial structure are reinforced.
The contemplated acquisition of Sofilac with its flagship brands Charvet and Lacanche confirms the Group's ambition to develop in the professional and semi-professional culinary markets.
We remain committed to our medium-term ambition to deliver a LFL sales CAGR of at least 5% and an operating margin progressing toward 11%. For 2024, we reaffirm our guidance to achieve an operating margin close to 10%.
I want to thank all our employees for their commitment and contribution to these outstanding achievements."
1 LFL: on a like-for-like basis (= organic)
Consolidated results (€m) |
2022 |
2023 |
Change 2022/2023 |
Sales |
7,960 |
8,006 |
+0.6%
|
Operating Result from Activity (ORFA) |
620 |
726 |
+17.0% |
Operating profit |
547 |
667 |
+22.0% |
Profit attributable to owners of the parent |
316 |
386 |
+22.1% |
Adjusted EBITDA |
874 |
985 |
+12.7% |
Net debt at end December |
1,973* |
1,769* |
-10.3% |
Dividend per share |
€2.45 |
€2.62** |
+6.9% |
* o/w €371m and €358m in IFRS16 impact for 2022 and 2023 respectively |
% calculated on non-rounded figures |
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** dividend proposed at the AGM of |
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SALES
Despite an uncertain environment, this solid momentum was driven by:
- the continued recovery of the Consumer business (+3.2% LFL), which saw growth in all regions, and a resilient Small Domestic Equipment market globally;
- the excellent performance of the Professional business (+26.5% LFL), fueled by the continued international expansion of Professional Coffee.
OPERATING RESULT FROM ACTIVITY (ORFA)
The Group's 2023 Operating Result from Activity (ORFA) came out at €726m, up 17.0% from
- a positive volume effect of €134m, with a return to rising volumes in Consumer business and strong growth in the Professional segment;
- a favorable price mix effect (+€160m) reflecting the enriched product mix and the ability to pass along price increases in some emerging markets with an inflationary environment;
- a €102m decrease in the cost of sales, thanks notably to the decline in purchasing costs of raw materials, components, finished products and transportation (sea freight in particular);
- a slight increase of €28m in growth drivers, notably in innovation;
- rising administrative and commercial expenses (up €102m) driven by sustained dynamic sales activation in an inflationary context;
- negative currency effects amounting to €166m, reflecting currency depreciation in certain emerging countries (whose impact is offset by price hikes) and an unfavorable impact in hedging results.
OPERATING PROFIT AND NET PROFIT
At €667m, operating profit was up 22.0%, or an increase of €121m compared to 2022.
This includes a discretionary profit-sharing expense of -€24m (-€18m in 2022). Furthermore, it includes other income and expenses, amounting to -€34m, of which a third is linked to the reorganization plan in
The 2023 net financial result came out at -€81m, stable versus 2022.
Net profit attributable to owners of the parent came to €386m (up 22.1% vs. 2022) factoring in:
- a tax charge of €148 million, representing an effective tax rate of 25% for the 2023 financial year (21% in 2022), with the increase being mainly explained by the fact that prior tax loss carry-forwards recognized in 2022 did not recur in 2023.
-
minority interests (mainly related to
Supor ) of €53m.
Adjusted EBITDA amounted to €985m, up 12.7% from 2022.
BALANCE SHEET
At
At €805M, the free cash flow generated in 2023 substantially improved after an unusual 2022 which led to consumption of €20m. It benefited in particular from the increase in adjusted EBITDA and a sharp decline in operating working capital requirements (WCR) which came in at €1,169m (or 14.6% of sales), versus €1,393m at
This improvement can be explained:
- mostly by Group-led actions to reduce inventories, reaching 18.4% of sales at end-2023, compared to 21.1% a year earlier;
- as well as a seasonality effect on production at year-end.
The free cash flow generation allowed the Group to finance the acquisitions made in 2023 (including
Against this backdrop, net debt at
DIVIDEND
Meeting on
For shareholders having held registered shares for more than two years, the dividend will be increased by a loyalty premium of 10%, taking the total dividend to €2.88 per share (for holdings below 0.5% of the capital for a single shareholder).
With the Annual General Meeting scheduled for
ACQUISITION PROJECT
Today,
Sofilac is a family-owned French group, majority-held by the members of the Augagneur family. With €62m in sales posted in 2023, it designs, manufactures and distributes premium cooking equipments targeting the semi-professional (Lacanche brand) and professional (especially with the Charvet brand) markets.
This acquisition would enable
This transaction, expected to be completed in
OUTLOOK
At mid-term, the Group reaffirms its ambitions announced in
- an LFL sales compound annual growth rate (CAGR) of at least 5%;
- an operating margin progressing toward 11%;
- continued substantial generation of free cash flow.
In 2024, in a still uncertain macroeconomic and geopolitical environment, with a slow economic recovery – especially in
Consumer business should return to more widespread growth in 2024 in mature countries, with a gradual year-round recovery in
CONSOLIDATED INCOME STATEMENT
(€ million) |
|
|
|
Revenue |
8,006.0 |
7,959.7 |
8,058.8 |
Operating expenses |
(7,280.4) |
(7,339.4) |
(7,245.5) |
OPERATING RESULT FROM ACTIVITY |
725.6 |
620.3 |
813.3 |
Statutory and discretionary employee profit-sharing |
(23.8) |
(17.6) |
(39.4) |
RECURRING OPERATING PROFIT |
701.8 |
602.7 |
773.9 |
Other operating income and expense |
(34.3) |
(55.7) |
(59.1) |
OPERATING PROFIT |
667.5 |
547.0 |
714.8 |
Finance costs |
(42.9) |
(35.1) |
(43.1) |
Other financial income and expense |
(37.6) |
(45.6) |
(21.4) |
PROFIT BEFORE TAX |
587.0 |
466.3 |
650.3 |
Income tax expense |
(147.6) |
(98.0) |
(142.7) |
PROFIT FOR THE PERIOD |
439.4 |
368.3 |
507.6 |
Non-controlling interests |
(53.2) |
(52.1) |
(53.8) |
PROFIT ATTRIBUTABLE TO OWNERS OF THE PARENT |
386.2 |
316.2 |
453.8 |
PROFIT ATTRIBUTABLE TO OWNERS OF THE PARENT PER SHARE (in units) |
|||
Basic earnings per share |
7.01 |
5.74 |
8.42 |
Diluted earnings per share |
6.97 |
5.71 |
8.36 |
CONSOLIDATED BALANCE SHEET
ASSETS (in € millions) |
|
|
|
|
1,868.4 |
1,767.9 |
1,707.8 |
Other intangible assets |
1,347.5 |
1,305.1 |
1,289.9 |
Property, plant and equipment |
1,292.2 |
1,338.8 |
1,265.6 |
Other investments |
210.6 |
218.3 |
162.0 |
Other non-current financial assets |
16.6 |
18.2 |
16.3 |
Deferred tax liabilities |
151.6 |
135.2 |
129.8 |
Other non-current assets |
65.5 |
58.3 |
52.9 |
Long-term derivative instruments - assets |
17.9 |
26.3 |
11.6 |
NON-CURRENT ASSETS |
4,970.3 |
4,868.1 |
4,635.9 |
Inventories |
1,474.8 |
1,682.1 |
1,839.6 |
Customers |
1,018.0 |
891.5 |
934.6 |
Other receivables |
185.0 |
217.1 |
232.4 |
Current tax assets |
36.8 |
53.2 |
38.9 |
Short-term derivative instruments - assets |
40.8 |
76.8 |
115.7 |
Financial investments and other current financial assets |
94.7 |
102.0 |
60.6 |
Cash and cash equivalents |
1,432.1 |
1,237.0 |
2,266.5 |
CURRENT ASSETS |
4,282.2 |
4,259.7 |
5,488.3 |
TOTAL ASSETS |
9,252.5 |
9,127.8 |
10,124.2 |
EQUITY & LIABILITIES (in € millions) |
|
|
|
Share capital |
55.3 |
55.3 |
55.3 |
Reserves and retained earnings |
3,170.8 |
3,146.8 |
2,969.1 |
|
(27.7) |
(33.3) |
(34.3) |
Equity attributable to owners of the parent |
3,198.4 |
3,168.8 |
2,990.1 |
Non-controlling interests |
262.3 |
280.1 |
300.6 |
CONSOLIDATED SHAREHOLDERS’ EQUITY |
3,460.7 |
3,448.9 |
3,290.7 |
Deferred tax liabilities |
198.6 |
212.6 |
234.0 |
Employee benefits and other long-term provisions |
210.4 |
213.4 |
298.9 |
Long-term borrowings |
1,890.4 |
1,922.6 |
2,230.8 |
Other non-current liabilities |
58.9 |
53.8 |
54.1 |
Long-term derivative instruments - liabilities |
13.9 |
32.9 |
15.3 |
NON-CURRENT LIABILITIES |
2,372.2 |
2,435.3 |
2,833.1 |
Employee benefits and other short-term provisions |
125.3 |
138.4 |
132.0 |
Trade payables/suppliers |
1,160.6 |
1,027.1 |
1,614.7 |
Other current liabilities |
609.8 |
583.8 |
546.7 |
Current tax liabilities |
58.8 |
52.6 |
51.8 |
Short-term derivative instruments - liabilities |
65.0 |
52.2 |
50.0 |
Short-term borrowings |
1,400.1 |
1,389.5 |
1,605.2 |
CURRENT LIABILITIES |
3,419.6 |
3,243.6 |
4,000.4 |
TOTAL CONSOLIDATED EQUITY AND LIABILITIES |
9,252.5 |
9,127.8 |
10,124.2 |
CASH FLOW STATEMENT
(€ million) |
|
|
||||
PROFIT ATTRIBUTABLE TO OWNERS OF THE PARENT |
386.2 |
316.2 |
||||
Depreciation, amortization and impairment losses |
294.0 |
274.3 |
||||
Change in provisions |
(26.9) |
(1.6) |
||||
Unrealized gains and losses on financial instruments |
18.4 |
(3.9) |
||||
Income and expenses related to stock options and bonus shares |
25.4 |
29.2 |
||||
Gains and losses on disposals of assets |
2.6 |
(3.7) |
||||
Other |
0.0 |
(5.2) |
||||
Non-controlling interests |
53.2 |
52.1 |
||||
Current and deferred taxes |
147.6 |
98.0 |
||||
Finance costs |
42.9 |
34.4 |
||||
CASH FLOW (1) (2) |
943.4 |
789.8 |
||||
Change in inventories and work in progress |
193.3 |
172.7 |
||||
Change in trade receivables |
(161.2) |
160.8 |
||||
Change in trade payables |
185.8 |
(618.1) |
||||
Change in other receivables and payables |
50.5 |
(41.0) |
||||
Income tax paid |
(147.9) |
(153.8) |
||||
Net interest paid |
(42.9) |
(34.4) |
||||
NET CASH FROM OPERATING ACTIVITIES |
1,021.0 |
276.0 |
||||
Proceeds from disposals of assets |
5.1 |
13.6 |
||||
Purchases of property, plant and equipment (2) |
(143.2) |
(199.8) |
||||
Purchases of software and other intangible assets (2) |
(32.5) |
(33.0) |
||||
Purchases of financial assets |
(21.5) |
(75,3) |
||||
Acquisitions of subsidiaries, net of cash acquired |
(163.3) |
(71.9) |
||||
NET CASH USED BY INVESTING ACTIVITIES |
(355.4) |
(366.4) |
||||
Increase in borrowings (2) |
1,118.8 |
976.4 |
||||
Decrease in borrowings |
(1,263.6) |
(1,614.0) |
||||
Issue of share capital |
0.0 |
0.0 |
||||
Transactions between owners |
(62.8) |
(33.6) |
||||
Change in treasury stock |
(17.8) |
(34.6) |
||||
Dividends paid, including to non-controlling interests |
(195.4) |
(203.7) |
||||
NET CASH USED BY FINANCING ACTIVITIES |
(420.8) |
(909.5) |
||||
Effect of changes in foreign exchange rates |
(49.7) |
(29.6) |
||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
195.1 |
(1,029.5) |
||||
Cash and cash equivalents at beginning of period |
1,237.0 |
2,266.5 |
||||
Cash and cash equivalents at end of period |
1,432.1 |
1,237.0 |
||||
(1) Before net finance costs and income taxes paid. |
||||||
(2) Excluding IFRS 16 impact |
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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,
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
This press release may contain individually rounded data. The arithmetical calculations based on rounded data may present some differences with the aggregates or subtotals reported.
Conference with management on
Centre de conférence
21 Rue Balzac
75008
Click here to access the webcast live
Replay available on our website
on
Next key dates – 2024 |
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Q12024 sales and financial data |
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Annual General Meeting |
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H1 2024 sales and results |
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9-month 2024 sales and financial data |
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