SRP Groupe : 2017 H1 Results

H1 2017 RESULTS

GROUP TRANSFORMATION AND SOLID GROWTH

PRESS RELEASE

La Plaine Saint Denis, 25 July 2017 - Showroomprivé, a leading European online retailer, specialising in fashion for the Digital Woman, has published its results for H1 2017, ended 30 June.

 Transformation of the Group with the signing of a strategic partnership with Steinhoff Group and its subsidiary Conforama, European leader in household equipment

• Strengthening in the household sector, our second largest category after fashion.

• Development of a unique omnichannel offer via access to the Conforama network of stores in Europe.

• Access to Steinhoff's sourcing and international presence worldwide.

   Consolidation of our positions in key markets and geographies

• Earlier completion of Saldi Privati integration in Italy to strengthen our positions within our leading market outside France.

• Strengthening of our beauty vertical, with the acquisition of Beauteprivee (French leading online flash sales player specialised in cosmetics with 3 million members and 800 brand partners).

   Solid growth in H1 2017 (+27%)

• Revenue of €306 million, up 27% compared to H1 2016.

• Internet revenue of €243 million in France, growing by 18%, higher than the e-commerce market.

• Growth driven by the mobile that now accounts for 81% of traffic and 60% of revenues.

   Acceleration of international growth

• International revenue of €54 million, up 28% like-for-like compared to H1 2016.

• The International segment now represents 18% of the Group's Internet revenue against 12% for H1 2016.

• 377,000 international buyers compared to 282,000 in 2016 (+33%, excluding Saldi Privati).

   EBITDA margin excluding Saldi Privati of 4.5%, punctually impacted by marketing investments anticipated from H2 in H1, and by storage costs related to firm purchase opportunities grasped in H1 in order to prepare for the year-end growth.

  • Retreated from these elements, EBITDA margin was 5.3%.

 Showroomprivé confirms its 2017 revenue targets and expects to achieve an EBITDA margin excluding Saldi Privati of between 5.5% and 6.0%

KEY FIGURES H1 2017

(€ million)	H1 2016	H1 2017	% Growth
Net revenue	240.3	306.2	27.4%
Total Internet revenue	234.4	297.6	26.9%
EBITDA	15.7	10.9	-30.8%
EBITDA as a % of revenue	6.6%	3.6%
Adjusted EBITDA1 excluding Saldi Privati	-	15.2	-
Adjusted EBITDA1 as a % of revenue	-	5.3%	-
Net income excluding Saldi Privati	0.7	3.6	+411,.%

Thierry Petit and David Dayan, co-founders and co-CEOs of Showroomprivé, commenting these results, stated: "The growth of our business in H1 confirms the relevance of our strategic directions, particularly that of international

1 EBITDA retreated from anticipated marketing investments from H2 in H1 (€1.2 million) and storage costs related to firm purchase opportunities grasped in H1 (€1 million)

development. Showroomprivé has changed its scope during this half year with the completion of a strategic partnership with Steinhoff/Conforama that will bring significant value creation, and for which the first synergies will be implemented as early as in the 3rd quarter. This 6-month period will also have been marked by one-off investments to prepare for the end of year, a key period for the Group. All these initiatives allow us to look with confidence towards H2 and to reiterate our revenue targets for the current year and for 2020. "

H1 HIGHLIGHTS In the first half of 2017, Showroomprivé posted solid revenue growth, driven in particular by the acceleration of International operations. Showroomprivé consolidated its strategy aiming to respond to all the needs of digital women by acquiring Beauté Privée and implementing a strategic and commercial partnership with Steinhoff/Conforama.

1. Group transformation with the signing of a strategic partnership with Steinhoff/Conforama

   • A strategic and commercial partnership with Steinhoff / Conforama was announced on May 17th and finalized on July 3rd.

   • This strategic partnership will allow Showroomprivé to accelerate the implementation of its growth ambitions in France and on an international level.

   • Thanks to this partnership, Showroomprivé will: (i) reinforce itself in the household equipment sector; (ii) have access to an exceptional network of physical stores for the click-and-collect of Showroomprivé products, and (iii) benefit from the support in terms of sourcing and the international presence of the Steinhoff group.

   • Operational teams have begun to work more closely while synergies and joint commercial development have just started. First synergies are to be implemented as early as in the 3rd quarter.

2. Earlier integration of Saldi Privati

   • The important integration work undertaken in November 2016 has been successfully completed, allowing the merger of the two platforms Showroomprivé and Saldi Privati, as well as of their infrastructure and member databases.

   • All Group employees now use the same tools, interfaces, and platforms to facilitate interaction and sharing of sales.

   • The completion of this stage, that has had a one-off impact on the EBITDA margin of Saldi Privati in H1, will enable the announced cost and revenue synergies to be implemented as early as in the second half of 2017. Profitability will therefore be achieved in 2018.

3. Continuous improvement in service quality and in customer experience
   • Customer navigation

     • All the digital innovations developed in France (new UX, new mobile website, new search engine) have been rolled out internationally.

     • Launch of a new sponsorship module

     • New functionnality with creation of the Gift Finder that will offer a more convenient experience to our members

   • Delivery and service quality

     • 7,000 new additional pick-up points have been established in Europe and a specific network for delivery of heavy products has also been created.

     • The Group's logistics systems in Belgium, Spain, and Portugal were reorganised, enabling a 30% reduction in delivery times for H1.

     • Launch of Infinity in Belgium and Italy

   • Payment

     • One-click payment and payment in four instalments (in partnership with ONEY) have been widely rolled out to drive and facilitate purchases.

4. Solid growth

   • The Group's revenue increased by 27% from €240.3 million in H1 2016 to €306.2 million.

   • Organic growth was 16.8%.

   • EBITDA margin excluding Saldi Privati was 4.5% (3.6% with Saldi Privati).

   • Group's EBITDA margin excluding Saldi Privati was impacted by marketing investments anticipated from H2 in H1 (+€1.2 million), and by storage costs related to firm purchase opportunities grasped in H1 in order to foster year-end growth.

   • Excluding these exceptional items, the adjusted EBITDA margin excluding Saldi Privati was 5.3%.

5. Acceleration of International growth

   • The Group's international growth was 87% over H1 (28% like-for-like) with a revenue of €54 million.

   • As a result of the multi-local strategy (recruitment of local teams, redesign of logistics for the international segment, and rollout of new functionalities already launched in France) started in 2016, this strong growth has confirmed the acceleration seen within the International segment since Q4 2016.

   • The Group has continued to strengthen its international sourcing teams in order to provide an even better offer adapted to its international customers' expectations.

6. Strengthening of CSR initiatives on innovation

   • Adding value to its fashion-based model and its brand partners, Showroomprivé has stayed a step ahead by continuing to develop its initiatives regarding Fashion Tech.

     • In line with its social involvement, the Showroomprivé Foundation opened the first e-commerce school in Roubaix. Over the next five years, the school will offer more than 4,000 hours of free training to nearly 100 students isolated from the labour market.

   • From June 28th to July 3rd, Showroomprivé organised the 2nd annual "Look Forward Fashion Tech

Festival", bringing together more than 10,000 visitors at the Gaïté Lyrique.

INITIATIVES FOR H2

Showroomprivé will continue to innovate and improve its customer experience during H2 with the rollout of a range of strategic initiatives aimed at boosting members' activity.

• Operational synergies and optimizations

  • Steinhoff / Conforama: the first effects are expected as from the 3rd quarter, thanks to:

     The roll-out of the Click & Collect system in several pilot sites as from September

     The launch of cross-business operations (web exclusives, flash sales with Conforama, traffic sharing, etc.) as from the 3rd quarter.

  • Saldi Privati: implementation of cost and revenue synergies announced as from the second half of 2017.

  • The Group has identified an operational optimization plan of €2 million over H2.

    • International Development

      • Appointment of an international director in charge of development outside France and coordination with the rest of the group;

      • Further strengthening of international sourcing teams, particularly in Italy.

    • Business Development

      o Preparation of an ambitious commercial strategy plan that will be deployed throughout the second half of the year centred around key timings (beginning of the new school year, Halloween, Black Friday and Christmas).

      • Improved customer experience

        • Improvement of the conversion rate: Showroomprivé will offer personalisation of all its purchasing platforms (website, mobile site) to provide its members with an environment adapted to their preferences, as well as a selection of ever more relevant offers.

        • Rationalisation of the purchasing process: The Group will launch a Personal Shopper search engine that will allow customers to refine their searches as they wish. Personal Shopper will be implemented progressively from September.

    • Logistics

    o Showroomprivé will open a new footwear-dedicated warehouse in Q3 in partnership with ADS and will significantly reshape its Saint Witz site, improving delivery timeframes and making significant operating cost reductions.

    GROUP TARGETS FOR 2017 ONWARDS

    Strengthened by the build-up of quality inventories and marketing investments made over H1 to drive growth in H2, by improvement in customer experience and by the first effects of synergies from completion of Saldi Privati integration and of a strategic partnership agreed with Steinhoff Group and its subsidiary Conforama, Showroomprivé confirms its revenue targets for 2017.

• Revenues between €690 million and €720 million (+28% to +33% growth).

  The Group now anticipates an EBITDA margin between 5.5% and 6.0% for 2017, excluding Saldi Privati. Showroomprivé also confirmes its 2020 targets:

• Revenues of c. €1.1 billion by 2020.

• EBITDA margin exceeding 7.5%.

• Ratio of cash flows from operating activities to EBITDA higher than 100%.

DETAILED COMMENTS PER INDICATOR TYPE

Revenues

(€ millions)	H1 2016	H1 2017	% Growth
Internet revenue France	205.5	243.5	+18.5%
International	28.9	54.1	+87.1 %
Total Internet revenues	234.4	297.6	+26.9%
Other revenues	5.9	8.6	+45.5%
Net revenues	240.3	306.2	+27.4%
(€ millions)	Q2 2016	Q2 2017	% Growth
Net revenues	123.0	152.4	+23.9%

The 27.4% increase in Group revenues to more than €306.2 million is driven by France and by the strong performance of the International group activities.