La Plaine Saint Denis, July 28, 2022 - Showroomprivé (SRP Group), a European group specializing in smart shopping, has published its results for the first half-year ended June 30, 2022.
Decline in business activity amid a challenging market environment
Very active first-half: continued adaptation of the model to market changes
Preservation of profitability and financial robustness thanks to continuous improvement of the model
EBITDA2 of €11.2 million vs. €33.0 million in H1 2021 and €7 million in H1 2020
Net income of €1.6 million, vs €20.6 million in H1 2021 and €-6,6 million in H1 2020
Sound financial structure
Outlook for the end of 2022
H1 2022 KEY FIGURES
(€ in millions) | H1 2020 | H1 2021 | H1 2022 | Change 21-22 |
Change (%) 21-22 |
Net revenue | 302,7 | 388,3 | 305,4 | -82,9 | -21,3% |
Total Internet revenues | 298,2 | 385,1 | 301,3 | -83,8 | -21,8% |
Gross margin | 112,4 | 157,6 | 119,5 | -38,1 | -24,2% |
as % of revenues | 37,1% | 40,6% | 39,1% | - | -1,5pts |
Operating expenses | 114,0 | 132,6 | 116,1 | -16,5 | -12,4% |
as % of revenues | 37,7% | 34,2% | 38,0% | - | 3,8pt |
EBITDA | 7,0 | 33,0 | 11,2 | -21,8 | -66.1% |
EBITDA margin as % of revenues | 2,3% | 8,5% | 3,7% | - | -4,8pts |
Net result | -6,6 | 20,6 | 1,6 | -19,0 | N.A |
François de Castelnau, Group Deputy CEO and Chief Financial Officer, said:
“Amid a difficult market environment for the e-commerce sector, net revenue declined by 21.3%. Thanks to the focus on operational efficiency over the last few months and years, our business model has become more agile, thus enabling us to adapt quickly to market changes and generate a positive EBITDA of €11.2m over the H1 2022, which represents a margin of 3.7%. Certain indicators, such as the size of the average basket, are on the rise, reflecting our enhanced offering and continued premiumization. Our financial position is also very solid, with €207.1 million in equity and net cash of €20.3 million.”
Commenting on the results and outlook, David Dayan, co-founder and CEO of Showroomprivé, said:
“The first half of the year was marked by a challenging market environment, in line with the trend observed at the end of last year. This environment is persistently uncertain. As we expected a recovery in the second half of the year, the long-awaited rebound seems to require more time and effort. In such context, it currently would be unwise to put forth precise objectives for the end of 2022, whether in terms of activity or profitability. Our motivation on a daily basis lies in our commitment to protect our profitability by keeping a tight control over our operating costs and optimization of our logistics, two parameters on which we can act amid the drop in business activity. In addition, we are continuing to grow the most profitable businesses, including SRP Media, and to strengthen our value proposition, as we have done with the acquisition of The Bradery and the launch of the Village.”
DETAILED COMMENTS BY INDICATOR TYPE
Revenues
(€ thousands) | H1 2020 | H1 2021 | H1 2022 | Change (%) 21-22 |
Internet revenues | ||||
France | 252 749 | 322,262 | 245,881 | -23.7% |
International | 45 433 | 62,865 | 55,408 | -11.9% |
Total Internet revenues | 298 181 | 385,127 | 301,288 | -21.8% |
Other revenues | 4 552 | 3,145 | 4,142 | +31.7% |
Net revenues | 302 733 | 388,272 | 305,433 | -21.3% |
Net revenues for the first half of 2022 came to €305.4 million, down -21.3% compared with the first half of 2021 but is slightly up compared to H1 2019 (€302.0 million, a growth of 1.1%) and H1 2020 (€302.7 million, a growth of 0.9%). After a sharp decline in the first quarter, the Group's activity continued on the same trend in Q2, thus confirming a challenging and uncertain market environment. The macroeconomic and geopolitical context is marked by a growing strain on household purchasing power and supply chain issues that has further exacerbated inflation. The decline in revenue takes into account an unfavorable comparison basis that continued until mid-May 2021, driven by pandemic-related market conditions and shop closures. This decline, although disappointing, is in line with the evolution of the retail sector as a whole.
In order to secure a satisfactory inventory levels amid the shortages observed over the first half of the year, Showroomprivé has carried out a higher level of firm purchases and sales, while still continuing to promote dropshipping (32% of sales) rather than conditional sales. This allows faster delivery and better customer satisfaction. However, conditional sales still account for nearly 37% of the sales mix.
Internet sales in France amounted to €245.9 million, down -23.7% over the half-year. While the Travel & Ticketing segment grew strongly, core business activities, particularly Fashion, suffered from the economic situation. Our retail media SRP Media continues to perform well, up 20% despite the very challenging comparison basis, and contributes to the improvement of the profitability.
The Group recently inaugurated its Brand Village, a special area reserved for Showroomprivé's top members that offers a permanent premium offering at accessible prices. The ambition is to digitalize the customer experience in physical outlet stores. The Marketplace continues to develop, and its performance is in line with expectations, but it has not yet been able to produce its full effects in the current economic climate. The contribution of these initiatives to revenue should nevertheless gradually increase over the next few quarters.
Beauté Privée net revenues continue to suffer from the platform migration, but are expected to quickly benefit from the implementation of partnerships with top brands and a more favorable comparison basis.
Internationally, Internet sales also fell by -11.9%, coming to €55.4 million. Saldi Privati fared better than Showroomprivé over the period, as did the Spanish and Moroccan markets, which experienced a much smaller drop in sales than Showroomprivé's French market.
Revenue from other activities (wholesale sales of unsold items or returned items) increased to €4.1 million. The development of this non-strategic revenue stream r continues to reflect effective inventory management.
Key performance indicators
H1 2020 | H1 2021 | H1 2022 | Change (%) 21-22 |
|
Gross Merchandise Volume (GMV)3 | 444,1 | 527.7 | 431.9 | -18.2% |
Cumulative buyers* (in millions)4 | 10,129 | 11.029 | 11.608 | +5.3% |
Buyers** (millions)4 | 2,114 | 2.305 | 1.910 | -17.2% |
o/w loyal buyers*** | 1,7 | 1.9 | 1.6 | -15.6% |
As a % of number of total buyers | 83% | 83% | 84% | - |
Number of orders (in millions)4 | 6,413 | 7.404 | 5.374 | -27.4% |
Revenue per buyer (IFRS)4 | 127.8 | 152.7 | 145.9 | -4.4% |
Average number of orders per buyer | 3,0 | 3.2 | 2.8 | -12.4% |
Average basket size | 42,1 | 47.5 | 51.8 | +9.1% |
* All buyers who have made at least one purchase on the Group's platform since its launch
** Member placing at least one order during the year
*** Member placing at least one order during the year and at least one order in prior years
GMV totaled €439.1 million, down €95.8 million (-18.2%) compared with H1 2021.
The cumulative number of buyers was up +5.3%, reaching 11.6 million. The drop in the number of orders and buyers nonetheless reflects the challenges faced over the period.
The average basket rose €4.3 over one year (+9.1%) to €51.8, thanks to the premiumization strategy and the enhancement of the offering. The Home segment also contributed to this increase. Revenue per buyer nonetheless fell by 4.4% to €145.9, due to the drop in activity and the reduced average number of orders per buyer but increased by 14.2% when compared to H1 2020, demonstrating that the efforts of the late years to restructure the business model have borne fruits.
The Group confirms high levels of customer satisfaction and delivery quality during this period (NPS5 of 54% vs. 49% in H1 2021), maintaining the allegiance of a loyal customer base.
Operational profitability
(€ in millions) | H1 2020 | H1 2021 | H1 2022 | Change 21-22 |
Net revenue | 302,7 | 388,3 | 305,4 | -82,9 |
Cost of goods sold | 190,4 | 230,7 | 186,0 | -44,7 |
Gross margin | 112,4 | 157,6 | 119,5 | -38,1 |
as % of revenues | 37,1% | 40,6% | 39,1% | -1,5pt |
Marketing* | 7,7 | 10,9 | 10,6 | -0,2 |
as % of revenues | 2,6% | 2,8% | 3,5% | +0,7pt |
Logistics & fulfillment | 76,0 | 86,5 | 73,9 | -12,6 |
as % of revenues | 25,1% | 22,3% | 24,2% | +1,9pt |
General & administrative expenses | 30,3 | 35,2 | 31,6 | -3,6 |
as % of revenues | 10,0% | 9,1% | 10,4% | +1,3pt |
Total current operating expenses | 114,0 | 132,6 | 116,2 | -16,5 |
as % of revenues | 37,7% | 34,2% | 38,0% | +3,8pts |
Current operating profit | -1,6 | 25,0 | 3,3 | -21,7 |
EBITDA6 | 7,0 | 33,0 | 11,2 | -21,8 |
o/w France | 7,0 | 30,5 | 11,1 | -19,4 |
o/w International | 2.5 | 0.1 | -2.3 | 0 |
* In accordance with AMF recommendations, the amortization of intangible assets recognized during a business combination is presented under ‘Current operating income' as marketing expenditure.
H1 2022 gross margin dropped by €38.1 million to €119.5 million. Gross margin accounted for 39.1% of revenues, versus 40.6% in H1 2021 and 37.1% in H1 2020. The 1.5-point decline year-on-year reflects an unfavorable market environment, with lower sales coupled with more burdensome negotiation conditions due to stock shortages and supply chain disruptions. However, this decline includes other positive factors:
The gross margin is up by 200 basis point compared to H1 2020 induced by a good cost management and the renewed business model.
The gross margin in H1 2022 went along with a slight increase of 3.8 point in operating expenses as a percentage of revenue, i.e. 38.0% compared to 34.2% a year earlier. In absolute terms, these operating expenses were reduced by €16.5 million in order to protect profitability, and the breakdown is as follows:
SRP Group EBITDA came to €11.2 million, compared with €33.0 million in H1 2021, demonstrating the effectiveness of the measures taken to protect the Group's profitability in a challenging market environment. In the first half of 2020, while revenues were roughly equivalent to that published this year on June 30, EBITDA was only €7 million or a margin of 2.3%.
After depreciation, amortization and provisions, operating income before cost of share-based payments and other operating income and expenses amounted to €3.3 million, compared to €25 million at 30 June 2021.
Net result
(€ in millions) | H1 2020 | H1 2021 | H1 2022 | Change 21-22 |
Operating income before cost of share-based payments and other operating income and expenses | -1,6 | 25,0 | 3,3 | -21,7 |
Other operating income and expenses | -3,7 | -2,7 | -0,4 | 2,2 |
Operating income | -5,4 | 22,3 | 2,9 | -19,4 |
Net finance costs | -0,3 | -0,4 | -0,4 | NS |
Profit before tax | -5,7 | 21,9 | 2,5 | -19,4 |
Income tax | -0,9 | -1,3 | -0,9 | +0,4 |
Net result | -6,6 | 20,6 | 1,6 | -19,0 |
Other operating income and expenses (€0.4 million net expense) comprise sundry non-recurring expenses totaling €0.3 million (advisory fees related to the acquisition of The Bradery) and €0.1 million related to donations.
Financial expenses remained stable compared to 2021 at €0.4 million due to the refinancing initiative carried out in December 2021. The Group recorded a tax charge of €0.9 million.
As a result, the Group's net profit was €1.6 million, a drop of €19 million compared with H1 2021, versus a negative net result of -6.6 million in H1 2020.
Cash flow items
(€ in millions) | H1 2021 | H1 2022 |
Cash flows related to operating activities | 23.1 | -13.5 |
Net cash flows from investing activities | -6.6 | -11.0 |
Net cash flows from financing activities | -38.5 | -2.1 |
Net change in cash and cash equivalents | -22.0 | -26.5 |
Cash flow from operating activities was €-13.5 million in H1 2022, following the decline in net profit and the change in WCR. The latter increased significantly over the period due to the decision to take advantage of opportunities regarding high-quality and firm inventories.
Net cash outflows on capital expenditure related mainly to the acquisition of The Bradery. R&D investments, which are inherent to the Group's activity, amounted to €3.1 million over the period, stable compared to previous years. As such, the Group generated a negative free cash flow7 of €24.5 million in H1 2022.
Cash flows related to financing activities totaled €-2.1 million (vs €-38.5 million in H1 2021), and include €1.5 million debt.
Balance sheet
ASSETS (€ million) | 12/31/2021 | 6/30/2022 | LIABILITIES (€ million) | 12/31/2021 | 6/30/2022 | |
Total non-current assets | 216.5 | 225.7 | Total shareholders' equity | 205.1 | 207.1 | |
Total current assets | 220.4 | 221.4 | Total non-current liabilities | 54.6 | 54.1 | |
o/w Inventory | 62.5 | 85.0 | o/w Financial debt | 54.3 | 53.8 | |
o/w Cash and cash equivalents | 99.6 | 73.0 | Total current liabilities | 177.2 | 186.0 | |
o/w Financial debt | 12.9 | 15.3 | ||||
Total assets | 436.9 | 447.1 | Total equity and liabilities | 436.9 | 447.1 |
Shareholders' equity stands €207.1 million as of June 30, 2022
As at 30 June 2022, the Group had a solid gross cash and cash equivalents of €73.0 million and a positive net cash position of €3.9 million.
Net financial debt included €18.3 million of other debt (lease liabilities (IFRS 16) and financial debt related to the acquisition transaction) as of June 30, 2022. Without this accounting item, the net cash position would be €22.2 million.
The Group is continuing to reduce its debt and enjoy a sound financial position. As such, it is looking to the future with serenity.
OUTLOOK
Activity in the first half of the year, and in particular Q2, is consistent with the downward trend observed at the end of 2021, in line with developments observed among other players in the sector. In this very uncertain and challenging market environment, SRP Groupe is continuing its efforts to protect profitability by controlling costs and optimizing logistics, while continuing to adapt its value proposition.
While the Group forecasted a recovery in the second half of the year, this rebound is likely to be more difficult than anticipated and will probably take longer to materialize considering the nature of the economic environment in the coming months. It would therefore be unreasonable at this stage to set revenue and profitability targets for the end of 2022.
For the second half of the year, we expect to launch several attractive offerings that are liable to appeal to new members as well as loyal customers. It should be noted, however, that Q3 is traditionally the weakest quarter of the year in terms of volumes.
In addition, the Group's objectives include:
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UPCOMING INFORMATION
Q3 2022 revenue: October 20, 2022
FORWARD-LOOKING STATEMENTS
This press release contains only summary information and is not intended to be comprehensive.
This press release may contain forward-looking information and statements about the Group and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "goal" or similar expressions. Although the Group appreciates that the expectations reflected in such forward-looking statements are reasonable, investors and the Group's shareholders are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Group,
which could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in filings with the Autorité des Marchés Financiers (France's financial markets authority) made or to be made by the Group (particularly those detailed in Chapter 4 of the Company's registration document). The Group makes no commitment to publicly update its forward-looking statements, whether as a result of new information, future events or otherwise.
ABOUT SHOWROOMPRIVE
Showroomprivé is an innovative European player in the online private sales industry, specialized in fashion. Showroomprivé offers a daily selection of more than 3000 brand partners via its mobile apps or website in France and six other countries. Since its launch in 2006, the company has enjoyed quick growth.
Showroomprivé is listed on Euronext Paris (code: SRP) and reported gross revenue of almost €1 billion incl. VAT8 in 2021, and net revenue of €724 million. The Group is headed by David Dayan, the co-founder, and employs over 950 people.
For more information: http://showroomprivegroup.com
CONTACTS
Investor Relations | Communication |
Sylvie Chan Diaz, Investor Relations investor.relations@showroomprive.net |
Anne Charlotte Neau-Juillard, Communication anne-charlotte.neau-juillard@showroomprive.net |
Taddeo presse.showroomprive@taddeo.fr +33 1 83 97 41 48 |
APPENDICES
INCOME STATEMENT
(€ thousands) | H1 2021 | H1 2022 | Change |
Net revenues | 388 272 | 305 426 | -21,3% |
Cost of goods sold | -230 670 | -185 972 | -19,4% |
Gross margin | 157 602 | 119 454 | -24,2% |
Gross margin as % of revenues | 40,6% | 39,1% | -1,5pt |
Marketing1 | -10 868 | -10 672 | -1,8% |
as % of revenues | 2,8% | 3,5% | +0,7pt |
Logistics & fulfillment | -86 511 | -73 823 | -14,6% |
as % of revenues | 22,3% | 24,2% | +1,9pt |
General & administrative expenses | -35 234 | -31 615 | -10,3% |
as % of revenues | 9,1% | 10,4% | +1,3pt |
Total Opex | -132 614 | -116 150 | -12,4% |
as % of revenues | 34,2% | 38,0% | +3,9pts |
Current operating profit | 24 989 | 3 304 | -86,9% |
Other operating income and expenses | -2 669 | -422 | -84,2% |
Operating income | 22 319 | 2 882 | -87,1% |
Net finance costs | -581 | -381 | -34,4% |
Other financial income and expenses | 139 | -32 | NS |
Profit before tax | 21 878 | 2 469 | -88,7% |
Income tax | -1 317 | -908 | -31,1% |
Net income | 20 560 | 1 561 | -88,7% |
EBITDA | 32 981 | 11 221 | -66,0% |
EBITDA as % of revenues | 8,5% | 3,7% | -4,8pts |
1In accordance with AMF recommendations, the amortization of intangible assets recognized in relation to a business combination is presented under "current operating income" within marketing expenses.
KEY PERFORMANCE INDICATORS1
H1 2021 | H1 2022 | Change | |
CUSTOMERS METRICS | |||
Cumulative buyers (in thousands) | 11 029 | 11,608 | +5.3% |
France | 8 598 | 9,109 | +5.9% |
International | 2 431 | 2,500 | +2.8% |
Buyers (in thousands) | 2,305 | 1,910 | -17.2% |
France | 1,868 | 1,518 | -18.8% |
International | 437 | 392 | -10.3% |
Revenue per Buyers (€) | 152.7 | 145.9 | -4.4% |
France | 155.1 | 147.0 | -5.2% |
International | 142.2 | 141.4 | -0.6% |
ORDERS | |||
Total orders (in thousands) | 7,404 | 5,374 | -27.4% |
France | 6,000 | 4,190 | -30.2% |
International | 1,404 | 1,184 | 15.6% |
Average number of orders per buyer | 3.2 | 2.8 | -12.4% |
France | 3.2 | 2.8 | -14.0% |
International | 3.2 | 3.0 | -5.9% |
Average Basket Size | 47.5 | 51.8 | +9.1% |
France | 48.3 | 53.3 | +10.3% |
International | 44.2 | 46.8 | +5.7% |
1 Excluding Beauté Privée
BALANCE SHEET
(€ thousands) | 12/31/2021 | 6/30/2022 |
NON-CURRENT ASSETS | ||
Goodwill | 123 685 | 135 683 |
Other intangible assets | 49 155 | 48 287 |
Tangible assets | 36 905 | 35 583 |
Other non-current assets | 6 755 | 6 184 |
Total non-current assets | 216 500 | 225 737 |
CURRENT ASSETS | ||
Inventory | 62 564 | 85 026 |
Accounts receivable | 20 311 | 24 921 |
Deferred tax assets | 928 | 2 177 |
Other current assets | 37 039 | 36 241 |
Cash and cash equivalents | 99 551 | 72 998 |
Total current assets | 220 394 | 221 364 |
Total assets | 436 894 | 447 101 |
Long term financial debt | 54 317 | 53 799 |
Obligations to personnel | 206 | 206 |
Other provisions | 57 | 70 |
Deferred taxes | 29 | 12 |
Total non-current liabilities | 54 609 | 54 088 |
Short-term financial debt | 12 946 | 15 315 |
Accounts payable | 119 722 | 128 419 |
Other current liabilities | 44 496 | 42 225 |
Total current liabilities | 177 164 | 185 958 |
Total liabilities | 231 773 | 240 046 |
Total shareholders' equity | 205 121 | 207 055 |
Total liabilities and shareholders' equity | 436 894 | 447 101 |
CASH FLOWS
(€ thousands) | H1 2021 | H1 2022 |
Net income for the period | 20 560 | 1 561 |
Adjustments for non-cash items | 9 227 | 7 050 |
Cash flow from operations before finance costs and income tax | 29 787 | 8 611 |
Elim of accrued income tax expense | 1 317 | 908 |
Elim of cost of net financial debt | 581 | 381 |
Impact of change in working capital | - 7 828 | - 20 048 |
Cash flow from operating activities before tax | 23 857 | - 10 147 |
Income tax paid | -746 | -3 354 |
Cash flows from operating activities | 23 111 | -13 502 |
Impact of changes in perimeter | - | -6 422 |
Acquisitions of property plant & equipment and intangible assets | - 6 620 | - 4 814 |
Changes in loans and advances | -338 | 237 |
Acquisition (disposal) of financial assets | - | - |
Sale of tangible and intangible assets | 312 | 39 |
Net cash flows from investing activities | -6 646 | -10 960 |
Capital increase | 72 | - |
Transaction on own shares | -159 | -160 |
Increase in share capital and share premium reserves | - | |
Issuance of indebtedness | - | 24 |
Repayment of borrowings | - 37 821 | - 1 517 |
Net interest expense | - 638 | - 382 |
Other flows from financing activities | ||
Net cash flows from financing activities | - 38 546 | - 2 059 |
Impact of change in foreign exchange rate | 88 | -33 |
Net change in cash | - 21 993 | - 26 554 |
EBITDA RECONCILIATION
(€ thousands) | H1 2021 | H1 2022 |
Net result | 20,560 | 1,562 |
Am. and dep. fixed assets | 7,992 | 7,917 |
of which depreciation in Logistics and order processing | 3,373 | 3,262 |
of which depreciation in General and administrative expenses | 4,619 | 4,656 |
Cost of financial debt | 441 | 413 |
Other financial income and expenses | 2,669 | 422 |
Income tax | 1,317 | 908 |
EBITDA | 32,981 | 11,221 |
GMV RECONCILIATION
(€ thousands) | H1 2021 | H1 2022 |
Gross Internet Sales | 515,391 | 417,277 |
VAT | -82,123 | -64,407 |
Revenue Recognition Impact | -55,275 | -59,634 |
Non-Internet Revenue & Other | 10,279 | 12,150 |
Net Revenues IFRS | 388,272 | 305,404 |
(€ thousands) | H1 2021 | H1 2022 |
Gross Internet Sales | 515,391 | 417,277 |
Other Services and Other Revenues | 12,334 | 14,579 |
Gross Merchandise Volume | 527,725 | 431,857 |
1 Gross Merchandise Volume (GMV) is the total amount transactions invoiced, inclusive of all taxes. It therefore includes gross online sales, including sales on the Marketplace, other services and other income. The revenue reconciliation table is appended
*Individually and trough his limited liability holding company TP Invest Holding
2 EBITDA, according to the definition used by the Company, is obtained by deducting from net income: the amortization of assets recognized following a business combination; amortization and depreciation of intangible assets and property, plant and equipment; the costs of share-based payments, including the expense arising from expensing the fair value of bonus shares and stock options granted to employees over the vesting period; other non-recurring operating income or expenses, net cost of debt and other financial income and expenses, and the tax expense for the year
3 Gross Merchandise Volume (GMV) is the total amount of transactions invoiced, including all taxes. It therefore comprises gross online sales, including sales on the Marketplace, other services and other revenues.
4 Excl. Beauté Privée and The Bradery
5 Net promoter score - indicator of customer loyalty
6 EBITDA, according to the definition used by the Company, is obtained by deducting from net income: the amortization of assets recognized following a business combination; amortization and depreciation of intangible assets and property, plant and equipment; the costs of share-based payments, including the expense arising from expensing the fair value of bonus shares and stock options granted to employees over the vesting period; other non-recurring operating income or expenses, net cost of debt and other financial income and expenses, and the tax expense for the year.
7 Free cash flow is obtained by the sum of cash flow from operating activities and cash flow from investing activities
8 Gross Merchandise Volume (GMV) is the total amount transactions invoiced, including all taxes. It therefore includes gross online sales, including sales on the Marketplace, other services and other income
Regulated information:
Inside Information:
- News release on accounts, results
Full and original press release in PDF: https://www.actusnews.com/news/75790-en-2022.07.28-press-release_vdef.pdf