PRESS RELEASE
MAISONS DU MONDE: THIRD-QUARTER 2019 SALES
Another quarter of solid sales growth
despite a soft trading environment in France
Continued strong momentum in online and international activities
Acceleration of Modani openings
implying higher ramp-up costs than anticipated
Full-year 2019 targets updated
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- Q3 2019 sales up 9.2% at current exchange rates (+8.8% at constant exchange rates) to €283.7m1
- Sales up 8.2% at constant perimeter2 in Q3 2019, of which +3.0% like-for-like, up vs. Q3 2018 (+1.1%) despite a soft trading environment in France
- Continued strong momentum across online (+19.3%) and international (+17.7%) activities in Q3 2019, accounting for c. 26% and c. 47% of sales respectively3
- 9M 2019 sales up 10.5%4 (+8.4%5 at constant perimeter) of which3.9% like-for- like
- 24 gross openings in 9M 2019 (20 Maisons du Monde and 4 Modani), including 9 gross openings in Q3 2019 (7 Maisons du Monde and 2 Modani)
- Acceleration of Modani's development implying higher ramp-up costs than originally planned, leading to an estimated impact of c. €7 million on FY 2019 profitability
- FY 2019 targets updated6:
- Sales growth raised to around 10.5% (vs. around 10%)
- 38-42gross store openings (revised from 35-40) and 13-14 store closures for relocation (vs. around 10)
- EBITDA margin of c. 12.5% of sales, reduced from above 13% to reflect Modani's negative contribution this year
_________________________________________
- Including Modani and Rhinov (sales of €0.5 million in Q3 2019).
- At current exchange rates, excluding Modani and including Rhinov.
- At current exchange rates, including Modani and Rhinov.
- At current exchange rates, including Modani and Rhinov (sales of €0.5 million in 9M 2019).
- At current exchange rates, excluding Modani and including Rhinov.
- Including Modani and Rhinov and pre-IFRS 16 impact.
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Nantes, 30 October 2019
Maisons du Monde(Euronext Paris: MDM, ISIN Code: FR0013153541), a European leader in affordable and inspirational decoration and furniture homeware, today announces its third-quarter 2019 sales.
Julie Walbaum, Chief Executive Officer of Maisons du Monde, commented:
"Maisons du Monde posted another quarter of solid sales performance, with strong double-digit growth in online sales and international business, underscoring the continued robustness of our business model and omnichannel strategy.
Considering our strong sales performance in the first nine months, particularly at Modani, topline growth is likely to exceed our initial guidance and reach around 10.5% this year.
Although we have decided to close down our 4 corners at Debenhams in the UK as part of our active store portfolio management, we are comfortable with our objective of net openings for the year, given that our gross openings will also be higher than anticipated. Modani has accelerated its store expansion, and should, by year-end, count nearly as many store openings since its acquisition 18 months ago as in its previous 11 years of existence.
The core business of Maisons du Monde is expected to deliver full-year profitability in line with our expectations, above 13% of sales, despite a soft trading environment in France.
Modani's profitability will be affected this year by the unprecedented acceleration of its development. Modani's growth challenges, which were not fully anticipated, will have a c. €7M impact on its full-year
EBITDA.
Reflecting this, we are updating our full-year Group EBITDA margin guidance to c. 12.5%.
Maisons du Monde's teams are fully focused on delivering a strong fourth quarter and on paving the way for our 2020-2024 strategy, which will result in double-digit annual sales growth, robust profitability and strong cash flow over the next five years."
***
Q3 2019: Another quarter of solid sales growth
In the third quarter of 2019, Maisons du Monde posted total sales of €283.7 million, up 9.2% year-on- year including Modani and up 8.2% at constant perimeter. Like-for-like sales growth was 3.0% at constant perimeter. The third quarter saw continued strong momentum in online sales, up 19.3% year- on-year to c. 26% of sales, as well as international business, up 17.7% year-on-year to c. 47% of sales, confirming the robustness of the Group's business model and omnichannel strategy.
In the third quarter of 2019, Maisons du Monde continued to implement its business initiatives to lay the foundations for the 2020-2024 plan. In line with our new strategy, we initiated the revamping of our collectioning process. Our Fall-Winter decoration collection, launched at the end of July, proposed more distinctive themes, each composed of a narrower and sharper offer. We have also initiated the localization of our in-store merchandizing, beginning to adapt the display of our furniture offer to local demand. To improve our omnichannel experience, we are rolling out in-store returns of online decoration orders in six countries. To support our ambition to be the leading B2B destination for furniture and decoration in Europe, Maisons du Monde opened in September its first B2B showroom in the Grands Boulevards store in Paris. We are also seeing the results of our reinforced branding efforts as our annual barometer showed that Maisons du Monde's brand awareness has improved in all our countries, with a nine-point increase in Italy and a five-point increase in both France and Spain.
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Furthermore, Maisons du Monde continued to implement its development plan, with 5 net store openings in the quarter (7 gross openings, of which 2 outside France, and 2 closures for relocation in France).
Continued strong online and international momentum in 9M 2019
In the first nine months of 2019, Maisons du Monde posted total sales of €847.7 million, up 10.5% year- on-year including Modani and up 8.4% at constant perimeter. Like-for-like sales growth reached 3.9% at constant perimeter. Growth momentum remained strong in online sales, up 21.9% year-on-year, and international business, up 21.5% year-on-year. Online and international represented 26% and 46% of the Group sales respectively over the nine-month period.
In the first nine months, Maisons du Monde recorded 12 net store openings, reflecting 20 gross openings (of which 9 outside France) and 8 closures for relocation (of which 5 in France). As of 30 September 2019, Maisons du Monde operated 348 stores across 10 different markets.
In the first nine months, Modani recorded 3 net store openings, with 4 gross openings and 1 closure in San Francisco due to the impact on traffic of long-term public works in the area around the showroom. Modani had 16 showrooms in the USA as of 30 September 2019.
Rapid expansion at Modani, short-term impact on profitability
Modani's quantum leap in expansion (8 gross store openings since its acquisition 18 months ago vs. 11 in total between 2007 and mid-2018) has had a very positive impact on topline growth, with sales up 31.2% at constant exchange rates in the third quarter and up 23.1% on a pro forma basis in the first nine months of 2019.
However, openings were more back-end loaded than planned. In addition, the rapid expansion pace at Modani led to higher costs in logistics, as well as greater investments in marketing and support functions than anticipated. Profitability was also impacted to a lesser extent by the effect on gross margin of the new US tariffs policy. As a result, Modani's profitability should be lower than initially forecast by c. €7 million.
We expect Modani's profitability to improve in 2020 thanks to the continuing good sales performance of the newly-opened stores and the normalization of the cost base. We remain fully confident in the strength of Modani's business model and its medium-term growth prospects.
FY 2019 guidance updated7
Maisons du Monde updates its full-year 2019 guidance, reflecting both the strong sales and store opening momentum, and the greater costs and investments at Modani. We now expect:
- Sales growth raised to around 10.5% (vs. around 10%);
- 38-42gross store openings (revised from 35-40) and 13-14 store closures for relocation (vs. around 10);
- EBITDA margin of c. 12.5% of sales, reduced from above 13% to reflect Modani's negative contribution this year.
***
7 Including Modani and Rhinov and pre-IFRS 16 impact.
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APPENDIX
Summary of Q3 2019 sales8
Three months ended 30 September | |||
In € million | 2018 | 2019 | % change |
Sales | 259.8 | 283.7 | +9.2% |
% change at constant exchange rates | +8.8% | ||
% like-for-like change | +1.1% | +3.0% | - |
Sales by geography | |||
France | 147.6 | 151.5 | +2.7% |
International | 112.2 | 132.2 | +17.7% |
Total | 259.8 | 283.7 | +9.2% |
France (%) | 56.8% | 53.4% | - |
International (%) | 43.2% | 46.6% | - |
Total (%) | 100.0% | 100.0% | - |
Sales by distribution channel | |||
Stores | 198.7 | 210.8 | +6.1% |
Online | 61.1 | 72.9 | +19.3% |
Total | 259.8 | 283.7 | +9.2% |
Stores (%) | 76.5% | 74.3% | - |
Online (%) | 23.5% | 25.7% | - |
Total (%) | 100.0% | 100.0% | - |
Sales by product category | |||
Decoration | 135.6 | 143.9 | +6.1% |
Furniture | 124.2 | 139.8 | +12.6% |
Total | 259.8 | 283.7 | +9.2% |
Decoration (%) | 52.2% | 50.7% | - |
Furniture (%) | 47.8% | 49.3% | - |
Total (%) | 100.0% | 100.0% | - |
8 Including Modani and Rhinov (sales of €0.5 million in Q3 2019).
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Summary of Q3 2019 sales at constant perimeter9
Three months ended 30 September | |||
In € million | 2018 | 2019 | % change |
Sales | 251.2 | 271.8 | +8.2% |
% change at constant exchange rates | +8.1% | ||
% like-for-like change | +1.1% | +3.0% | - |
Sales by geography | |||
France | 147.6 | 151.5 | +2.7% |
International | 103.6 | 120.3 | +16.1% |
Total | 251.2 | 271.8 | +8.2% |
France (%) | 58.8% | 55.7% | - |
International (%) | 41.2% | 44.3% | - |
Total (%) | 100.0% | 100.0% | - |
Sales by distribution channel | |||
Stores | 190.9 | 200.1 | +4.8% |
Online | 60.2 | 71.8 | +19.1% |
Total | 251.2 | 271.8 | +8.2% |
Stores (%) | 76.0% | 73.6% | - |
Online (%) | 24.0% | 26.4% | - |
Total (%) | 100.0% | 100.0% | - |
Sales by product category | |||
Decoration | 135.6 | 143.8 | +6.0% |
Furniture | 115.6 | 128.1 | +10.8% |
Total | 251.2 | 271.8 | +8.2% |
Decoration (%) | 54.0% | 52.9% | - |
Furniture (%) | 46.0% | 47.1% | - |
Total (%) | 100.0% | 100.0% | - |
9 Excluding Modani and including Rhinov (sales of €0.5 million in Q3 2019).
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Maisons du Monde SA published this content on 30 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2019 17:21:07 UTC