MR BRICOLAGE (EPA:ALMRB) - Mr.Bricolage: 2020 first-half earnings

Transparency directive : regulatory news

23/09/2020 18:00

2020 first-half earnings

Orléans, 23 September 2020, 6pm CET - Mr.Bricolage SA, which groups together
local independent home improvement and gardening stores, is reporting its
earnings for the first half of 2020 (1 January to 30 June 2020), which were
approved by the Board of Directors during its meeting on 23 September 2020.

- In a French market that was down -8.5% in value at end-June 2020(1) in the
context of the health crisis, the Group's French networks outperformed the
market by +13 points, up +4.5% (on a like-for- like store basis and on a total
store basis), while attracting a growing number of new entrepreneurs (786
stores vs. 708 at 31 December 2019). Overall, with 855 stores, compared with
778 at 31 December 2019, the volume of business shows +5.6% growth on a
like-for-like store basis and
+5.1% on a total store basis.

- During the first half of this year, the Group completed the plan to divest
its directly-owned stores, launched at the end of 2018, to realign operations
around its core "Network Services" business. Out of the 65 initial
directly-owned stores, 60(2) have been divested, with nearly 85% of them sold
to Mr.Bricolage members, while five stores were closed as it was not possible
to find a sustainable buyout solution (Brive La Gaillarde (19), Orléans (45),
Lexy (54), Montereau-Fault-Yonne (77) and La- Roche-sur-Yon (85)). At the end
of the first half of 2020, the Group is 100% reconfigured around a "Network
Services" business focused on developing the performance of its members and
affiliates. This new beginning is reflected in the +19.6% increase in
consolidated revenues for "Network Services" and the return to profitability,
with a net profit of +EUR6.8m.

"We are on track to complete the REBOND strategic plan, launched at the end of
2016 to modernize the banner and reconfigure the Group. The results that we are
presenting highlight the relevance of our realignment around our core "Network
Services" business, as well as the effectiveness of the ambitious
transformation rolled out at all levels across the Group in the last four
years. The work accomplished by all the teams has been remarkable. And it is
continuing to move forward. Looking beyond the robust development of our
networks, which we can be proud of in a difficult economic context,
Mr.Bricolage's financial position is picking up again: this will enable us to
further develop the competitiveness of our points of sale, while investing in
their development. During this year when we are celebrating our 40th
anniversary, the performance levels achieved at the height of the health crisis
illustrate the responsiveness and agility of a Group that is firmly focused on
the future and dedicated entirely to the success of its members-entrepreneurs
in the buoyant home improvement and gardening market", confirms Christophe
Mistou, Mr.Bricolage Group CEO.

(1) Source: Banque de France
(2) 59 directly-owned stores were sold at 30 June 2020. The Saint-Paul-lès-Dax
store was sold on 20 July 2020, taking the number of directly-owned stores
divested up to 60 out of the 65 stores owned by the Group at 31 December
2018.

I - KEY DEVELOPMENTS FOR THE FIRST HALF OF 2020

1. Business volume growth and network development

At end-June 2020, the member and affiliate networks in France and other
countries comprised 855 stores, compared with 778 at end-December 2019. This
represents a net balance of 77 new points of sale in six months, including 12
stores previously trading under a rival banner in southeast France that joined
Mr.Bricolage in early January. The networks' growth is consolidating the
ambition to reach 1,000 points of sale by 2028, supported by a structured
development strategy, and highlights the increased appeal of a streamlined
banner whose modernization is continuing to move forward. Together, these 855
stores represent a total volume of business of around EUR1,056m, up +4.7% on a
total store basis and +5.6% on a like- for-like store basis.

In a French market that is down -8.5%(1), the Mr.Bricolage Group's networks in
France (786 stores vs. 708 at end-December) outperformed the market by +13
points, with +4.5% growth on a like-for-like store basis and a total store
basis. The process for the 50(3) stores previously owned by the Group to be
bought out by Mr.Bricolage members-entrepreneurs is progressing under good
conditions: the economic and financial indicators (commercial performance,
footfall, etc.) are promising.

For international operations, with a volume of business of EUR141.8m, growth
came to +8.7% on a total store basis and +11.5% on a like-for-like store basis:
this is linked primarily to strong sales growth in Belgium (+18.5% on a total
store basis and +19.5% on a like-for-like store basis).

For online sales, the contraction recorded is linked to the closure of the Le
Jardin de Catherine site at the end of 2019, the finalization of the divestment
plan and the closure of the dedicated online warehouses during the lockdown
period. This trend does not reflect the strong progress with click and collect
sales (2h collection) on the www.mr-bricolage.fr site, included in the volume
of business for stores in France. With 95% of the Mr.Bricolage stores connected
to the e-commerce platform, the Group's web-to-store strategy largely
illustrated its benefits during the first half of this year. Throughout this
period, the digital teams worked to support members and scale up the e-commerce
platform in response to the increase in traffic. In-depth work on the 360
Client Vision was also launched during this period and will continue over the
second half of the year.

Volume of business incl. taxes
EURM                  Number of  H1 2020   Change on    Change on
                       stores             total store like-for-like
                                             basis     store basis
In-store sales           855     1,053.8     +5.1%       +5.6%
- France                 786       912.0     +4.5%       +4.5%
- International           69       141.8     +8.7%      +11.5%
Total sales excl.
directly-owned stores    854     1,049.2     +7.7%       +5.6%
Online sales (excluding
click-and-collect)        -          2.1    -59.1%         NA
Total                    855     1,055.9     +4.7%       +5.6%

(3) At 30 June 2020, 49 of the initial 65 directly-owned stores had been bought
out under the Mr.Bricolage banner. The takeover of the Saint-Paul-lès-Dax
store by a member on 20 July took this figure up to 50.

2. Finalization of the plan to divest directly-owned stores and realignment
around the "Network Services" business

At 20 July 2020(4), the Group finalized its realignment around its core
"Network Services" business. Out of the 65 directly-owned stores at 31 December
2018, 60 stores have been taken over, with 50 stores placed with Mr.Bricolage
members who were already part of the network and new entrepreneurs looking to
join the banner. The Brive-la-Gaillarde (19), Lexy (54), Montereau-Fault-Yonne
(77) and La-Roche-sur-Yon (85) stores did not reopen after the lockdown(5).
Whereas it was scheduled to close, the Allonne (60) store was bought out under
the Mr.Bricolage banner.

Alongside this realignment, a major transformation plan launched two years ago
is being rolled out to support head office staff, members and store teams with
the development of their activities and skills. Since the start of the second
half of the year, the work organization for head office staff has been subject
to an in-depth review and now offers more flexibility and independence for
staff to manage and carry out their day-to-day missions.

3. Implementation of the 4 pillars concept

The store concept based around the 4 retail pillars (Collaboration, Delivery,
Inventiv Solutions and Home Fund) is continuing to be put in place across the
network. To date, 21 Mr.Bricolage stores have implemented the 4 pillars
concept, which illustrates Mr.Bricolage's proximity positioning. Around 30
modernization projects are currently planned for the end of 2020 and 2021.

4. Commercial operations rolled out around the Group's 40th anniversary

In line with the REBOND plan roadmap, work to renew the product ranges and
standardize the information systems is moving forward. This is being supported
by stronger communication around the banner's 40th anniversary, with a new
advertising campaign promoting Mr.Bricolage's unique close relationship with
its customers since 1980. Deployed on the television and radio since mid-June,
several sketches use a fun, affectionate approach to show how Mr.Bricolage's
advisors are committed to understanding and listening to their customers each
day.

5. Management of the health crisis linked to the coronavirus

The Mr.Bricolage Group quickly organized itself to adapt to its networks' needs
and support them to put the health measures in place. The vast majority of the
members-entrepreneurs mobilized to continue trading and serve their customers'
needs by putting in place solutions to welcome them and/or arrange for orders
to be collected. Supported by the Group's very regular communications on the
legislative context and the latest health guidelines, and by the continuity of
the essential procurement, logistics and support services, the Mr.Bricolage
networks' stores clearly outperformed the market during the first half of this
year. The Group is continuing to monitor changes in the health context very
closely and will continue to implement the measures required to protect its
employees and customers.

6. Transfer to Euronext Growth Paris

Following the General Meeting's approval on 22 January 2020, the Board of
Directors' decision on the same day and the Euronext Listing Board's approval
on 24 February 2020, Mr.Bricolage's ordinary shares were admitted to Euronext
Growth Paris on 24 March 2020 under the same ISIN (FR0004034320) and the same
ticker code (ALMRB).

(4) 59 directly-owned stores were sold at 30 June 2020. The Saint-Paul-lès-Dax
store was sold on 20 July 2020, taking the number of directly-owned stores sold
up to 60 out of the 65 owned by the Group at 31 December 2018.
(5) The Orléans store was also closed at the start of 2020.

II - 2020 FIRST-HALF EARNINGS

Following the transfer to Euronext Growth Paris at the end of March 2020, the
first-half financial statements are no longer audited by the statutory
auditors.

Accounting standards
Following the application of IFRS 5 "Non-current Assets Held for Sale and
Discontinued Operations", the "Retail" sector is no longer presented from 2020.
Continuing operations therefore exclusively comprise the "Network Services"
business. The comparison of the total figure for "consolidated revenues" is
therefore not representative of the Group's performance. Only the change in
consolidated revenues for the "Network Services" business, detailed below, is
relevant.

Condensed consolidated accounts (EURm)
                          30 June 2020    30 June 2019      Change
                        IFRS 5 reported  IFRS 5 reported Like-for-like
Consolidated turnover        134.5             145.7         -7.7%
- Network Services           134.5             112.5        +19.6%
- Retail                       0.0              33.2       -100.0%
EBITDA                        16.9              10.4        +63.4%
Current operating profit      11.4               1.0     +1,053.0%
- Network Services            11.4               6.7        +68.7%
- Retail                       0.0              (5.7)      -100.0%
Other non-current operating
income and expenses           (0.1)             (3.3)       +95.8%
Operating profit              11.2              (2.3)      +587.6%
Financial income (expense)    (2.5)             (2.0)       -24.9%
Contribution from associates   0.0              (0.1)      +121.1%
Corporate income tax          (2.7)             (0.8)         -
Profit after tax from
continuing operations          6.0              (5.3)      +214.0%
Profit after tax from
discontinued operations        0.8              (3.4)         -
Profit (loss) for the period   6.8              (8.7)         -
- Group share                  6.8              (8.7)         -
- Minority interests           NS                 NS          -

Consolidated turnover

                          30 June 2020    30 June 2019      Change
                        IFRS 5 reported  IFRS 5 reported Like-for-like
EURm
Network Services turnover     134.5            112.5       +19.6%
Sales of goods                 97.5             77.7       +25.5%
Sales of services              36.9             34.8        +6.2%
Retail (business discontinued
from 2020)                      0.0             33.2      -100.0%
Total consolidated turnover   134.5            145.7        -7.7%

Consolidated revenues for continuing operations, the longstanding core "Network
Services" business, climbed to EUR134.5m for the first half of 2020. The 19.6%
growth achieved compared with June 30, 2019 reflects:

- the EUR19.8m (+25.5%) increase in sales of goods linked to the networks'
growth, the range changes, the development of the own-brand Inventiv, which is
proving popular with customers, and the opening up of the warehouses to the
Briconautes and affiliate points of sale;
- the EUR2.1m (+6.2%) growth in services linked to the increase in the volume
of business and purchases for the networks' points of sale.

Current operating profit / operating profit

In line with the improvements recorded since the second half of 2019,
benefiting from the REBOND plan and the acceleration of the divestment plan,
the current operating profit came to EUR11.4m, compared with EUR1.0m for the
first half of 2019.

In the absence of non-current operations (EUR0.1m), the operating profit came
to EUR11.2m, compared with

EUR(2.3)m for the first half of 2019. The Mr.Bricolage Group's workforce
(excluding directly-owned stores) has been scaled to align with the needs of
the "Network Services" business, with 493 staff at end-June 2020 (head office
and warehouses). Following several difficult years, the Group recorded an
operating margin of 8.3% for the first half of this year. The significant
improvement in management balances linked to the Group discontinuing the
"Retail" business and its efforts to adapt the organization for its new
dimension and optimize operations is in line with the Group's expectations. It
will make it possible to gradually reduce debt, while continuing to effectively
support the development of its members and networks.

Net profit

Financial income and expenses came to EUR(2.5)m for the first half of 2020,
linked primarily to the change in the interest rate margin for the syndicated
credit agreement set up in 2019. Following a EUR(2.7)m tax expense, the profit
after tax from continuing operations came to EUR6.0m, compared with a EUR(5.3)m
loss for the first half of 2019. After factoring in the profit after tax from
discontinued operations for EUR0.8m, the net profit for the period represents
EUR6.8m, compared with EUR(8.7)m at end-June 2019.

Net debt

At 30 June 2020, the Group used its drawdown capacity under the credit
agreement from 16 October 2019, with net financial debt of EUR94.7m, versus
EUR78.6m at end-2019. This increase is linked primarily to the seasonality of
purchases concentrated over the first half of the year, resulting in an
increase in working capital requirements. This was compounded by the impacts of
the health crisis this year: the significant concentration of sales at the end
of the first half-year period led to deferred receipts in the second half of
2020. In this context, the Group's cash position represents EUR20.1m, including
its use of the EUR3.0m overdraft line, in accordance with the Group's
expectations. Shareholders' equity came to EUR31.9m at end-June 2020, compared
with EUR25.0m at end-December 2019, in line with the improvement in results.

For reference, following the agreement with the banking partners to reschedule
the syndicated credit agreement signed on 16 October 2019, the maturity of all
of Mr.Bricolage SA's bank borrowings was deferred to December 2026 (instead of
December 2023 for the majority of the borrowings). With the exception of the
EUR40m revolving credit, repayable at maturity at end-December 2026, the
repayment schedule for debt will be very gradual from December 2022 and no
covenants will apply before mid-2022.

III - OUTLOOK FOR 2020

The very satisfactory results achieved for the first half of 2020 reflect (1)
the mobilization by the members- entrepreneurs in the context of the health
crisis to fully perform their role as key players for proximity and outstanding
service, and (2) the efforts made to adapt the organization in line with its
new scale and further strengthen the efficiency of operations. They are
consolidating the REBOND plan's success.

The Mr.Bricolage Group has shown its responsiveness and agility during this
uncertain period and is moving forward with its roadmap with confidence:

- Continuing to optimize network services and accelerating the development of
value-creating actions: renewing the product selection and pricing management
tools, standardizing the information systems, maintaining marketing investments
in the Inventiv brand and in-store footfall, transforming the digital strategy
and deploying the new customer services platform;
- Developing the network of branded and affiliate stores to achieve the
ambition for 1,000 points of sale by 2028;
- Rolling out the Transformation and the new work organization, led by the head
office teams;
- Deploying and implementing the 4 pillars concept across the network.

ABOUT THE MR.BRICOLAGE GROUP

The Mr.Bricolage Group, which develops the well-known banners Mr.Bricolage and
Les Briconautes, is the French specialist for local independent home
improvement retail. As of 30 June 2020, the Group has 855 stores operating
under the banners or through affiliates, including 69 international stores
across nine countries. Mr.Bricolage SA is listed on Euronext Growth Paris
(ISIN: FR0004034320 - ALMRB).

PRESS CONTACTS

- Corporate press
  o Anne-Claire Moyer, Mr.Bricolage - anne-claire.moyer@mrbricolage.fr
  o Louise Chaulin - louise.chaulin@gmail.com - +33 (0)7 83 35 96 93
- Financial press and investors
  o Marie Calleux, Calyptus - mrbricolage@calyptus.net - +33 (0)1 53 65 68 68

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MR BRICOLAGE (EPA:ALMRB) - Mr.Bricolage: 2020 first-half earnings

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