Groupe SEB: First-quarter 2019 Sales and Financial Data

Groupe SEB: First-quarter 2019 Sales and Financial Data

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An excellent quarter

ECULLY, France–(BUSINESS WIRE)–lt;a href=”” target=”_blank”gt;$SKlt;/agt;–Regulatory News:

Groupe SEB (Paris:SK):

  • Sales: €1,722m, +10.4% and +8.5% LFL**
  • Operating Result from Activity: €138m, +12%
  • Net financial debt (including IFRS 16 debt): €2,214m, vs. €1,578m
    at 12/31/2018

    ** Like-for-like: at constant exchange
    rates and scope of consolidation.


Groupe SEB reported sales of €1,722 million in first quarter 2019, up
10.4%, including organic growth of 8.5%
, a limited positive currency
effect of 0.8% (€13 million) and a scope effect of +1.1% (+€17 million).
The latter notably comprises the consolidation for a two-month period of
the recently acquired US company, Wilbur Curtis, specialized in
professional filter coffee, which contributed €12 million to sales.

Relative to the high comparatives, organic growth of 8.5% stands as a
very robust performance, which can be broken down as follows:

  • Consumer business, +7.0%: growth fueled by all geographies, by
    all product lines (excluding linen care), and by a higher volume of
    loyalty programs than in first-quarter 2018;
  • Professional (coffee machines and hotel equipment), +24.4%:
    growth driven by Professional coffee, with firm momentum in
    “day-to-day” business and a strong boost from major deals in the
    United States and China.

Operating Result from Activity (ORfA) totaled €138 million in the
first quarter, up 12% on first-quarter 2018.
The total includes a
currency effect of -€7 million as well as scope (Wilbur Curtis) and
method (IFRS 16) effects of +€5 million. ORfA was bolstered by brisk
business activity despite the environment of intense competition and
promotional activity. At this point, it does not include the accounting
entries for the initial consolidation of Wilbur Curtis (purchase price

Net financial debt stood at €2,214 million at March 31, 2019, compared
with €1,578 million at end-2018. The increase mainly stems from the
recognition of IFRS 16 debt (€351 million) and the acquisition of Wilbur
Curtis in February.


[graphic omitted]


[graphic omitted ]




In a generally positive market in the region, the Group achieved organic
sales growth of 3%. Growth was driven by robust core business and
includes a higher number of loyalty programs (LPs) than in first-quarter
2018. But it was negatively impacted by the end of Nespresso machine
sales in Nespresso stores (the last quarter of negative impact) and by
the WMF Consumer business which also weighed on performance in the
region: the situation remained difficult in Germany, but activity
trended positively in other countries, including Spain, Belgium and
Scandinavia. E-commerce, several electrical specialist partners, and our
proprietary stores (Group Retail) all stood as powerful growth drivers
in Western Europe.

In France, the Group posted a satisfying first quarter, down slightly
against high comparatives, but positive when excluding the penalizing
impacts of a loyalty program of end-2018. This in particular led to a
decline in our cookware sales in a contracting market, but our small
electrical appliance business grew, in a buoyant market. Sales were
driven in particular by vacuum cleaners (versatile, Clean&Steam, etc.),
automatic espresso machines, the “brunch” ranges (fostered by a
recycling campaign with a retailer), Cookeo, Dolce Gusto, and the Cake
Factory cake maker launched in September 2018. Revenue of irons and
steam generators decreased slightly in a context of bearish demand.

Performance was contrasted in other Western European countries. In
Germany, excluding WMF (for which business remained difficult), the
robust momentum in 2018 continued, fueled by the vast majority of
product categories, including cookware, vacuum cleaners, electrical
cooking, automatic espresso machines and food preparation. The
performance led to further market share gains. In parallel, the Group
confirmed its strong development in the Netherlands, with solid core
business and large-scale LPs. The Group enjoyed the same dynamic in
Spain, where cookware and new listings in personal care bolstered
growth. Day-to-day activity continued to trend favorably in Belgium and
Italy alike. In the UK, the sharp drop in revenue can be attributed to a
complicated economic environment and lackluster demand.


The solid organic growth in other EMEA countries in the first quarter
should be measured in the light of high comparatives in 2018 (+18.5%).
It was fueled by the continued strong development of core business and
heightened by a higher number of LPs than in 2018. As in 2018, most
countries contributed to the sales rise and, overall, the Group
continued to reinforce its positions in the region. Activity continued
to trend positively in Central Europe, supported by almost all countries
and product families, as well as LPs. Despite a fiercely competitive
environment, the Group also pursued its strong momentum in Russia,
thanks to flagship products such as cookware, meat mincers, kettles and
blenders, with a further reinforcement of its positions, and also thanks
to major loyalty programs. In parallel, the Group continued to expand in
Ukraine, substantially outperforming the market.

In Turkey, in a complicated economic environment, consumer purchasing
power, and, hence, demand, are under pressure, which is exacerbating
competition and promotional activity. Following the major price
increases made in 2018 to offset the collapse of the Turkish lira, our
sales dipped slightly on a like-for-like basis and were contrasted
according to product category.

In Egypt, our cookware-expanded joint venture has made a highly
promising start, whereas we confirmed our headway in small electrical
appliances, especially in food preparation devices (notably blenders).



The Group achieved first-quarter sales growth of 3.8% like-for-like,
driven by a positive contribution from 3 region countries. However, the
retail environment remained tense, with physical retailers continuing to
suffer from the sharp rise of e-commerce. The latter has resulted in
destocking, a highly promotion-focused environment, reorganization and
the closure of stores. These structural challenges are particularly
prevalent in the United States and Canada, where they have weighed on

In the United States, first-quarter activity was mixed between our two
main product categories. In cookware, our robust sales were fueled by
All-Clad’s solid dynamic (premium retail and e-commerce), favorable
momentum from T-fal – accelerated by the renewal of a major deal with a
client – in addition to ongoing steady development from Imusa,
particularly through expanded retail. Business was more difficult in
linen care, against a background of a bear market and of retailers
downsizing their shelf space for irons in particular.

The situation was very similar in Canada at the start of this year, with
revenue growth driven by cookware (All-Clad et T-fal) whereas small
electrical appliances (ironing, electrical cooking) lagged behind in a
sluggish market.

In Mexico, our sales were up slightly on the back of a high
first-quarter 2018 base. Nevertheless, performance varied by product
line, with a decline in ironing but solid growth in cookware and kitchen
utensils, as well as fans, thanks to highly favorable weather conditions.


Down softly on a reported basis owing to currency depreciations, our
turnover in South America increased in the first three months of the
year on a like-for-like basis, by nearly 5%. This organic growth was
driven largely by Brazil.

The economic environment in the country was slightly more positive in
the first quarter, though still fragile pending the implementation of
reform. As in 2018, the Group’s business environment was extremely
competitive and marked by strong promotional activity, stemming from
both the small electrical appliance market and the retail industry,
where heterogeneous situations prevail. Nevertheless, our sales for the
period rose 8.3% like-for-like, thanks in particular to an excellent
high season for fans, a strong pick-up in Dolce Gusto coffee machine
sales and a good start to the year in electrical cooking (grills and
Easy Fry “oil-less” fryer). Business was more difficult in linen care
and food preparation. The positive momentum in small electrical
appliances was supplemented by signs of a recovery in cookware, with an
improvement in industrial performance at the Itatiaia site.

In Colombia, our sales dipped slightly in the first quarter.
Performances were mixed according to retail channel (traditional
circuits being under pressure but modern distribution and Group Retail
proving successful). Business was stable in fans and trended extremely
positively in cookware (recently launched ranges off to a good start),
while blender sales occasionally decreased.


As expected, growth in Supor sales normalized over the first three
months of 2019, amounting to +13.4%, consistent with the trend in
fourth-quarter 2018. All product lines contributed to continued solid
development, largely exceeding market performance, and e-commerce was
the main driver of this momentum.

In cookware and kitchen utensils, growth was healthy and across the
categories, with special mention for the flagship product families,
where Supor continued to significantly outperform the market: woks,
frying and saucepans, sets (all products), thermal mugs and bottles.

In small electrical appliances, Supor’s ongoing and fast breakthroughs
were driven by both kitchen electrics and by the Home and Personal Care
(HPC) segment. In kitchen electrics, innovation continued to play its
full part as a catalyst for most of the product families, which
benefitted from a good start for new models: rice cookers, electric
pressure cookers, mobile induction hobs, health pot kettles, classic and
high-speed blenders. At the same time, momentum remained robust for HPC
activity, particularly owing to linen care (especially garment steamers
where Supor has forged strong positions in China) and vacuum cleaners,
for which the Group has significantly strengthened its market share. The
latter is complemented by good performances in Large Kitchen Appliances
(LKA) including extractor hoods.


Excluding China, Group sales increased 2.5% in the first quarter on a
like-for-like basis, with great performances in several countries as
well as more difficult situations in others, for example in Vietnam.

In Japan, as in 2018, business momentum remained vigorous, fueled by our
champion products (Ingenio cookware, kettles…) and the development of
new categories, particularly the Cook4me multicooker. Our proprietary
stores also proved powerful growth drivers, and the network continues to
expand, with the opening of two new points of sale at the start of the

In South Korea, in a tenser overall environment, Group sales fell
slightly like-for-like, as they remained negatively impacted by
overstocks of WMF products at a distributor’s. Excluding this effect,
business rose, yet was contrasted, holding firm in cookware (mainly
frying and sauce pans) while posting brisk growth in vacuum cleaners
(Air Force 360) and ironing (Freemove model and garment steamers) and
slowing down in food and beverage preparation.

The trend failed to change in Australia in the first quarter, with sales
remaining in negative territory, though new listings bode well for the
coming months. Growth was rapid in Thailand, mainly due to the success
of our flagship products (cookware and steam generators) and the
expansion of our product offering, notably with high-speed blenders and
vacuum cleaners. Activity was also robust in other markets, including
Malaysia, Hong Kong, Taiwan and Singapore, but remained difficult in


In first-quarter 2019, revenue of the Professional business (coffee
machines and hotel equipment) totaled €183 million, including a €12
million contribution from Wilbur Curtis, a US company specialized in
professional filter coffee acquired in early February and consolidated
for two months. On a like-for-like basis, sales grew 24.4%, driven by
particularly powerful momentum in Professional Coffee (WMF and Schaerer
brands). This impressive trend, consistent with that in second-half
2018, reflects solid growth in ordinary activity (where international
development continues) and the extremely favorable effect of the
delivery of major deals in China and the United States. This remarkable
performance should nevertheless be put into perspective with a modest
first quarter in 2018 owing to an absence of significant contracts over
the period. Comparatives will become more demanding starting in the
second half of the year.

Regarding hotel equipment, sales at end-March were up slightly on last


Operating Result from Activity (ORfA) totaled €138 million in the
first quarter, up 12% on first-quarter 2018.
The total includes a
currency effect of -€7 million as well as scope (Wilbur Curtis) and
method (IFRS 16) effects of +€5 million. ORfA was bolstered by brisk
business activity despite an overall market environment of intense
competition and promotional activity. At this point, it does not include
the accounting entries for the initial consolidation of Wilbur Curtis
(purchase price allocation).

DEBT AT MARCH 31, 2019

Net financial debt amounted to €2,214 million at March 31, 2019,
compared with €1,578 million at end-December 2018. The increase can be
attributed to the recognition of IFRS 16 debt (€351 million), the
acquisition of assets in Wilbur Curtis and an increase in the working
capital requirement stemming from a high-performing March (customer
receivables) and anticipation for a dynamic second quarter (stocks).


As a reminder, for Groupe SEB, the first quarter is not representative
of the full fiscal year. However, the strong traction in sales growth,
against demanding comparatives, and the increase in Operating Result
from Activity reflect an excellent start to the year.

These performances were achieved in a market environment that remained
difficult and volatile overall, with specific challenges in some
markets, requiring our agility and responsiveness. The Group
nevertheless remains confident in its ability to maintain sustained
development of its small domestic equipment business and to pursue its
progress in Professional Coffee Machines (PCM), including notably the
integration of Wilbur Curtis in the United States. However, the
excellent organic PCM sales growth achieved in first-quarter 2019 should
be put into perspective with the modest comparatives and should not be
extrapolated to the second half of the year.

Against this backdrop, Groupe SEB is confirming its guidance for 2019,
targeting further organic sales growth and an increase in its Operating
Result from Activity.

Groupe SEB strengthens the security of its regulated information

Groupe SEB is adopting the CertiDox solution developed by the Symex
Electronics group to strengthen the security of its press releases. The
new solution ensures readers of the authenticity of press releases in
terms of the following:

  • the releases have indeed been published by the company,
  • their content is compliant with what the company has written.

To that end, readers simply download the CertiDox app at App Store
(Apple) or Google Play (Android) free of charge via their smartphone or
tablet and scan the “CertiDox” QR code displayed in the press release.

The CertiDox app indicates whether the press release is included in the
database and, if such is the case, enables readers to compare the
content with the content displayed on their smartphone or tablet.

[graphic omitted]


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

  • 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

Operating Result from Activity (ORfA)

Operating Result from Activity (ORfA) is Groupe SEB’s main performance
indicator. It corresponds to sales minus operating costs, i.e. the cost
of sales, innovation expenditure (R&D, strategic marketing and design),
advertising, operational marketing as well as commercial and
administrative costs. 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.

Net debt Net indebtedness

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 having a maturity of under one year and easily disposed
of. Net debt may also include short-term investments with no risk of a
substantial change in value but with maturities of over three months.

Operating cash flow

Operating cash flow corresponds to the “net cash from operating
activities / net cash used by operating activities” item in the
consolidated cash flow table, restated from non-recurring transactions
with an impact on the Group’s net debt (for example, cash outflows
related to restructuring) and after taking account of recurring
investments (CAPEX).

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 environment, demand in
the Group
s large markets and the impact of new product launches
by competitors.

As a result of these uncertainties, Groupe SEB cannot be held liable
for potential variance on its current forecasts, which result from
unexpected events or unforeseeable developments.

The factors which could considerably influence Groupe SEBs
economic and financial result are presented in the Annual Financial
Report and Registration Document filed with the
Autorité des Marchés
Financiers, the French financial markets authority.

Listen to the recorded audiocast of the presentation on our website on
April 25, from 9:00 PM CET onwards:
or click

Reminder: Change of date

Please note that, following a change in the Board of Directors’
schedule, the publication date of the 9-month sales and financial
information has been modified. Initially set for October 24th,
it has been postponed to October 29th, 2019.

Below you will find the updated schedule.

Next key dates in 2019

May 22 | 2:30 pm (Paris time) Annual General Meeting
July 24 | before market opens H1 2019 sales and results
October 29 | after market closes 9-month 2019 sales and financial data

Find us

World reference in small domestic equipment, Groupe SEB operates with
a unique portfolio of 30 top brands including Tefal, Seb, Rowenta,
Moulinex, Krups, Lagostina, All-Clad, WMF, Emsa, Supor, marketed through
multi-format retailing. Selling more than 350 million products a year,
it deploys a long-term strategy focused on innovation, international
development, competitiveness and service to clients. With products being
present in over 150 countries, Groupe SEB generated sales of
approximately €6,8 billion in 2018 and had more than 34,000 employees

SEB SA – N° RCS 300 349 636 RCS LYON – with a
share capital of €50,169,049 – Intracommunity VAT: FR 12300349636


Investor/Analyst Relations
Groupe SEB

and Investor Relations
Posth and Raphaël Hoffstetter

Campus SEB 112 chemin
du Moulin Carron

69130 Ecully

[email protected]
+33 (0) 4 72 18 16 04

Media Relations
Groupe SEB
Communication Dept

Cathy Pianon and Anissa Djaadi

[email protected]
+33 (0) 6 33 13 02 00

+33 (0) 6 88 20 90 88

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Caroline Simon
Claire Doligez
Dunoyer de Segonzac

[email protected]
[email protected]
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Phone: +33 (0) 1 53 70 74 70

Angela Fuller

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