Toupargel Groupe : Full-year 2018 results

Civrieux d'Azergues, 23 May 2019

FULL-YEAR 2018 RESULTS (12 months)

The Group steps up its transformation with its "All Foods" campaign Growth is accelerating in online sales and fresh foods & groceries Fixed costs reduced by €10 million

Shareholders' commitment to provide €20 million confirmed;

€13 million already injected in 2018

Negotiations continue under judicial proceedings

initiated on 1 February 2019

The Toupargel SA Board of Directors met on 22 May 2019 and approved the financial statements for 2018.

Key Figures (audited)

The Statutory Auditors have performed their audit on the parent-company and consolidated financial statements. The Statutory Auditors' reports will be issued once the procedures necessary for the publication of the annual financial report have been finalised. The reports conclude that the Auditors are unable to certify the parent-company and consolidated financial statements because of the uncertainty surrounding the continuity of operations in the context of the collective procedures underway with regard to Toupargel Groupe SA and its two subsidiaries Toupargel SASU and Eismann SAS. These reports include not reservations on other aspects of the parent-company or consolidated financial statements.

• Consolidated income statement

(in € m)	2018	2017
	(12 months)	(12 months)
Sales	244.2	271.4
Gross profit	139.6	153.7
EBITDA*	(7.8)	(1.1)
Income from ordinary activities	(14.3)	(10.6)
Current operating margin	(5.9 %)	(3.9 %)
Exceptional expenses	(3.9)
Operating profit/loss	(18.2)	(10.6)
Net profit/loss (Group share)	(25.3)	(7.6)

*EBITDA: income from ordinary activities - gains (+ losses) on divestment of non-current assets - reversals of provisions + depreciation, amortisation and provisions for the year

In 2018, the transformation of the Group from telephone-based sales of frozen foods to multi-channel sales of food products accelerated. Fresh foods & groceries have been available throughout France via the Group's e- commerce site since the fourth quarter of 2017, and via telephone since June 2018.

In 2018, consolidated sales were down 10.0% to €244.2 million. This decline derived from the following factors:

• there was an unfavourable calendar effect with one fewer selling day;
• the historical business (telephone sales of frozen foods, 84% of total sales) declined by 14% with an acceleration in November and December because of social environment in France;
• telephone sales of fresh foods & groceries rose by 22%;
• e-commercesales rose by 29%, and within that category, fresh foods & groceries surged 84%;
• the partnership signed in October with Naturalia will increase sales in 2019.

In 2018, the Group took the necessary steps to successfully transform itself by reducing its fixed costs by €10.4 million. Payroll costs were reduced by €11.3 million principally by shifting emphasis in the recruiting of new customers to online methods. Similar savings have been identified for 2019 with the help of a consulting firm.

External costs increased by €3.3 million, in particular because the fresh foods & groceries line was deployed nationwide, a media campaign was launched at the end of the year and new financing was obtained.

The loss from ordinary activities totalled €14.3 million, vs. a loss of €10.6 million in 2017. The competitiveness and employment tax credit (CICE) diminished by €1.1 million, because the rate declined from 7% to 6%.

The Group suffered an operating loss of €18.2 million, reflecting goodwill impairment of €2.2 million and provisions for risks of €1.7 million.

• Shareholders' equity - Debt



(in €m)	31/12/2018	31/12/2017
Restated shareholders' equity (1)	42.5	54.6
Restated Net debt (2)	22.0	15.5
Restated Net debt / restated Equity	52 %	28 %
Cash flow	(10.4)	(3.1)

1. Including a €10 million contribution from Toupargel's principal shareholders
2. excl. pre-financing of "CICE" tax credit and a €10 million contribution from Toupargel's principal shareholders

At the end of December 2018, the shareholders advanced €13 million and confirmed their commitment to provide an additional €7 million.

Financial debt, net of €9.4 million in available cash, totalled €51.2 million as of 31 December 2018. After restatement to account for the pre-financing of the CICE (€16.2 million), offset on the balance sheet by assets of €17.0 million, and after reclassification of the increase in shareholder loans (€13.0 million) as near equity, restated net debt stood at €22.0 million. The ratio of restated net debt to restated shareholders' equity stood at 52% compared with 28% as of 31 December 2017.

Dividends on 2018 earnings

The Board of Directors will not propose a dividend to shareholders at the General Meeting of 27 June 2019.

2019 Outlook

Since 1 February 2019, the judicial proceedings involving Toupargel Groupe SA, Toupargel SASU and Eismann SAS have opened a single, circumscribed and secure negotiation space for Toupargel Groupe. The Court will reexamine the case in chambers on 2 July 2019 so as to decide whether the observation period should be extended. These proceedings are making it possible for all stakeholders to reach an agreement on the financing efforts to be pursued to ensure the Group's long-term recovery. In this context, and under the supervision of the procedural bodies, Management today announced a reorganisation plan to the Works Council of Toupargel SASU. The plan calls for 265 jobs to be eliminated, out of a total of more than 2,300, and for an employment protection plan to be implemented.

The plan aims to give Toupargel the financial resources it needs to focus on its operational recovery. To do this, the Group needs to accelerate the Oxygen plan by stepping up its ambitious "All Foods" campaign. This campaign consists in offering loyal frozen-foods customers a new array of 4,000 fresh food & grocery products, including 1,500 organic foods deriving from the partnership recently signed with Naturalia.

New services and a strengthened, multi-channel approach will soon complement this offering. Leveraging its existing partnerships and projects underway, Toupargel aims to grow its B2B activity, by offering its expertise in food products and home delivery.

Groupe Toupargel will continue to keep the market informed of the progress and results of judicial proceedings.

Upcoming events

• General Meeting of Shareholders in Civrieux d'Azergues (Lyon) on 27 June 2019 at 5:00 pm,
• Publication of sales and earnings for the first half of 2019 on 19 September 2019 (after stock market closing) and conference call at 5:30 pm.

ABOUT THE TOUPARGEL GROUP

Founded in 1947, Toupargel is France's leading food home delivery company. Headed by Romain Tchénio, the Group has nearly 2,600 employees throughout France and generated annual sales of €244 million in 2018. Toupargel delivers to 700,000 customers and has a catalogue of over 4,000 fresh and groceries products and 1,200 frozen food products, including 700 own-brand items. Its products are adapted to the needs of all consumers and all dietary requirements. 80% of Toupargel's own-brand recipes are made in France. Toupargel provides local service by telephone, online at www.toupargel.fr and via its new mobile application.

Toupargel, the specialist in home delivery of food products to individual customers

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Isin FR 0000039240 - Bloomberg: TOU - Reuters: TPGEL.PA

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