DAMARTEX (EPA:ALDAR) - DAMRTEX / Results for the 2019-2020 Financial Year

Transparency directive : regulatory news

03/08/2020 17:45

PRESS RELEASE - 3 AUGUST 2020

Results for the 2019-2020 Financial Year
Significant Impact of the Health Crisis on Earnings Acceleration of
Transformation
Strengthening of the Financial Structure

CONSOLIDATED DATA AT THE END OF JUNE     2018/19         2019/20     Variance
(in million Euros)                     published       published

Turnover                                 720.0            686.2         -4.7%
Operating EBITDA                          13.9              3.5        -74.8%
EBITDA (including IFRS16) (1)                              18.7
Current operating result                   1.2            (25.5)
Non-current operating items               (4.2)           (12.6)
Assets impairment                        (27.4)           (19.8)
Financial result                          (1.0)            (3.1)
Corporate income tax                      (1.9)             1.6
Net result from continuing operations    (33.4)           (59.4)
Net result from discontinued operations   (1.4)            (0.0)
Net result                               (34.8)           (59.4)            -
Capex                                     17.2             12.6
Net financial debt                       -28.2            -43.8

(1) EBOTDA before Righ of Use amortization, further to IFRS16 1st application
in 2019/2020.

ACTIVITY

The Damartex Group closes the 2019/2020 financial year with a turnover of
EUR686.2 million, down -4.7% at actual exchange rates compared with the
previous financial year. The health crisis thus had a particular impact on the
Fashion division sales in the second half of the year, notably due to the
closure of the Group's stores.

The "Fashion" division thus recorded sales of EUR500.0 million, down -8.8% at
actual exchange rates, while the "Home & Lifestyle" business grew by +7.7% at
actual exchange rates to EUR164.1 million, thanks in particular to a
particularly dynamic second half of the year. The newly created "Healthcare"
division, which includes the Sédagyl and Santéol brands, grew over the
financial year by +13.5% at actual exchange rates for sales of EUR22.1
million.

RESULTS

In the exceptional context of the health crisis, the Group's operating EBITDA
was EUR3.5 Mn, i.e. 0.5% of sales, down -74.8%.

Operating EBITDA for the "Fashion" business was strongly impacted by the
closure of stores and amounted to EUR-7.1 Mn. The "Home & Lifestyle" division
posted an operating EBITDA of EUR+9.6 Mn, while the "Healthcare" division
posted an operating EBITDA of EUR+1.0 Mn.

Current operating result (so-called ROC) was negative at EUR-25.5 Mn over the
financial year due to the Fashion division's underperformance (ROC at
EUR-32.2 Mn).
While the first half of the year posted positive current operating result, the
Group was severely affected by the health crisis in the second half of the
year. While the product margin remained stable, the sharp drop in activity
between March and May 2020 (EUR-39.5 Mn) negatively impacted profitability and
led to a carry-over of inventories to the next financial year. The Group
anticipates a depreciation of the value of these inventories of EUR-12.4 Mn. In
addition, the adaptation of operations, to limit the loss of business as much
as possible while guaranteeing the safety of employees and the continuity of
services to customers, has led to an increase in distribution costs.
Nevertheless, the sharp drop in marketing expenses (EUR-12.2 Mn), due to the
Group's optimization work prior to Covid-19 and to a strong reactivity to limit
expenses, has helped, to a certain extent, offset the impact of the crisis.

The Damartex group thus closes the financial year with a loss of EUR-59.4 Mn,
significantly impacted by the exceptional events related to Covid-19. Among the
measures affecting net income, the Group decided to depreciate EUR 19.8 Mn of
assets at Afibel and Damart. In addition, non-current operating items were
recorded for EUR-12.6 Mn, mainly due to the effects of the organizational
changes planned.

FINANCIAL POSITION

At the end of June 2020, the Group's net financial debt stood at EUR-43.8 Mn,
compared with EUR-28.2 Mn at the end of June 2019.

In an exceptional environment and despite the acquisition of Santéol at the
end of December 2019, the very good performance of the financial debt is to be
noted. The Group continued its efforts to control net working capital, which
amounted to EUR+5.9 Mn at the closing of the financial year, a significant
improvement on last year (EUR+38.3 million as of 30 June 2019). In addition,
the recovery in activity in June 2020 was better than expected.

The agility shown by the Group to adapt during the crisis will help maintain
solid fundamentals and address the future.

DIVIDENDS

Given the heavy impact of the health crisis and the transformation plan, the
Management Board will not propose a dividend distribution at the Annual General
Assembly scheduled for 18 November 2020.

OUTLOOK

Given the uncertainties related to the evolution of the health crisis, the
Group remains cautious about its short-term outlook. Nevertheless, the
Transform to Accelerate 2.0 plan and the strengthening of the Group's financial
structure (in particular via the agreement of the banking partners for the
renegotiation of covenants and the obtaining of a State-Guaranteed Loan in the
amount of EUR80 Mn), help envisage a possible second wave more serenely.

Finally, the Group confirms its ambition to carry out a capital increase with
preferential subscription rights for shareholders of approximately EUR30 Mn by
the end of the year, subject to market conditions. This amount would help
finance the Group's development.

Please note: the Management Board approved the financial statements on 31 July
2020. Audit procedures on the consolidated financial statements have been
performed. The certification report is in the process of being issued.

PROFILE

The Damartex Group, one of the leading European retailers for seniors, aims to
become the European leader in the silver economy. It includes three
divisions:
o "Fashion" - Damart, Afibel, La Maison du Jersey, Xandres;
o "Home & Lifestyle" - 3Pagen, Vitrine Magique, Coopers of Stortford, Jours
  Heureux, Delaby; and
o "Healthcare" - Sedagyl and Santéol.

The Group mainly operates in Europe, including in France, Great Britain,
Belgium and Germany. www.damartex.com

CONTACTS
Damartex: Bruno Defache
Tel: +33 3 20 11 45 30
bdefache@damartex.com

Shan:
Alexandre Daudin
Tel: +33 6 34 92 46 15
alexandre.daudin@shan.fr

Sarah Levy-Quentin
Tel: +33 1 44 50 03 64
sarah.levy-quentin@shan.fr

KEY DATES
* Financial Information Meeting
- 2019/2020 yearly results: 17 September 2020

REGISTERED HEADQUARTER
160 Boulevard de Fourmies - F 59100 Roubaix
Tel: +33 (0)3 20 99 44 00 - Fax: +33 (0)3 20 11 45 24
www.damartex.com

Limited liability company with a Management Board and a Supervisory Board
Capital: EUR 36,820,000
RCS Lille Métropole 441 378 312 - VAT No.: FR 73 441 378 312

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