Groupe SEB: 2013 Consolidated Results

  Groupe SEB: 2013 Consolidated Results

Business Wire

ECULLY, France -- February 27, 2014

RegulatoryNews:

Groupe SEB (Paris:SK):

                 Solid performance in line with expectations

  *Solid organic revenue growth of 5.4%
  *Operating result from activity up 7.2% at constant exchange rates
  *Operating result from activity of €410million, almost flat compared with
    2012 despite a €35million negative currency effect
  *Attributable profit up 3% to €200million
  *Solid cash generation, strengthening an already very healthy balance sheet
  *Recommended dividend of €1.39 per share, up 5.3%

                                                       
Consolidated Financial Results       2012        2013     Change
(in €m)
Revenue                              4,060       4,161    + 2.5%
Growth at constant exchange rates                            + 5.4%
Operating result from activity        415          410       - 1.2%
Growth at constant exchange rates                            + 7.2%
Operating profit                      368          364       - 1.0%
Profit attributable to equity         194          200       + 2.9%
holders of the parent
                                                             
Net debt at 31 December (in €m)      556         416      - €140m
Diluted earnings per share (in €)     4,01         4,08
Dividend (in €)                      1.32        1.39*    
*To be submitted for shareholder                             Percentages based
approval at the Annual General       Rounded figures in €  on non-rounded
Meeting on 15 May 2014                millions               figures
Figures exclude Maharaja Whiteline

Commenting on the 2013 results, Thierry de La Tour d’Artaise, Chairman and
Chief Executive Officer of Groupe SEB, said:

“In a highly heterogeneous market that has been more difficult since last
summer in particular because of the sharp decline in a number of currencies
against the euro and a slowdown in certain emerging markets, Groupe SEB
achieved a very satisfactory year: innovative products, marketing vitality,
the rapid development of e-commerce and local successes drove a solid growth
dynamic and supported results that were adversely affected by currency rates.

“Thanks to our robust sales, Operating result from activity amounted to
€410million, a 7.2% increase at constant exchange rates and virtually
unchanged from 2012 as reported because of a €35million negative currency
effect. Attributable profit totalled €200million and strong cash generation
further reinforced our balance sheet. This good performance illustrates the
validity of our business model, which, without freeing us totally from the
current environment, enables us to weather periods of instability while
maintaining our long-term course. It also reflects the remarkable commitment
of our employees who are contributing to the Group’s growth and success. I
would like to extend to them my warmest thanks.

“The beginning of 2014 has been shaped by economic uncertainty that we will
manage rigorously without sacrificing our long-term strategy to short-term
gain considerations. I am confident in the Group’s ability to once again drive
sustained organic growth in revenue and operating result from activity in
2014, led by an even richer product portfolio, new advances in our markets and
strong spending on growth drivers.”

Solid organic revenue growth

The strained and uncertain overall economic environment that prevailed
throughout 2013 affected consumer spending in many countries. Demand was
fragile or volatile, markets were highly competitive and promotion-driven, and
retailers drew down their inventories or kept them at low level. The small
domestic equipment segment, through inherently rather resilient, was impacted
by fluctuating or sluggish demand and performed unevenly across geographies as
well as product categories. In addition, the sharp fall in several of Groupe
SEB’s major operating currencies – most notably the Brazilian real, the
Russian rouble and the Turkish lira – disrupted business in the countries
concerned.

Nevertheless, in this difficult environment, the Group generated revenue of
€4,161 million for the year, up 2.5% on a reported basis and 5.4% at constant
scope of consolidation and exchange rates (like-for-like). Led by volumes,
this solid organic growth reflected a sharp 7.1% rebound in the second half
following a 3.1% rise in the first half.

Sales in euros were severely impacted by a €116million negative currency
effect (of which €106million in the second half), diametrically opposed to
the €112million positive currency effect observed in 2012. In recent years,
sharp currency fluctuations have become a volatility factor for reported
revenue and results and a major challenge for the Group.

As in 2012, demand varied from one country to another in 2013. On one hand,
growth was driven by Europe, the Americas and Asia-Pacific, with a very strong
momentum in China. On the other hand, revenue was down in France, due mainly
to the non-renewal of a major loyalty program with a retailer. Sales declined
in Turkey and have slowed substantially in Russia since last summer, in an
environment shaped by sluggish consumer spending. In this contrasted
environment, Group revenue rose by 4% in mature markets (which accounted for
54% of 2013 revenue) and by 7% in emerging economies (46% of the total).

Operating result from activity on a par with 2012

At €410million, operating result from activity was very close to the figure
reported in 2012, in line with expectations, despite a €35million negative
currency effect due mainly to the decline in the Brazilian real, the Russian
rouble and the Turkish lira against the euro. The impact was felt mainly in
the second half. At constant exchange rates, operating result from activity
amounted to €445million, an increase of 7.2%.

In addition to the currency effect, the factors of changes in the Operating
result from activity were the following:

  *A positive volume effect due to sustained demand in most markets.
  *A slightly negative price-mix effect, as price increases did not offset
    the impact of promotions in a more competitive environment.
  *Strict control of purchases.
  *An increase in expenses due in particular to higher sales, greater
    spending on growth drivers (R&D, advertising, marketing, etc.), digital
    development actions and a temporary increase in overhead costs.

Operating profit nearly at 2012 level and slight increase in attributable
profit

Operating profit amounted to €364million, down 1% on 2012. This was after
discretionary and non-discretionary profit-sharing of €37million,
considerably lower than last year’s high level, which in particular included
the Group’s matching funds for the “Horizons 2012” employee share ownership
plan. Other operating income and expense, which was negligeable in 2012,
resulted in a net expense of €9million, including limited realignment costs.

Finance costs and other financial income and expense improved to a net expense
of €55million, compared with a net expense of €63million in 2012. It
included €31million in finance costs, virtually unchanged from the previous
year. It also included a €7.5million impairment loss recognized on the
Group’s investment in Maharaja Whiteline, following a difficult, contentious
year with our Indian partner. Finance cost and other financial income and
expense was also adversely affected by €4million in exchange losses -due to
fluctuations in Latin American currencies- versus gains in 2012.

After tax, at an effective rate of 28.2%, compared with 30.9% in 2012, profit
attributable to equity holders of the parent amounted to €200million, versus
€194million in 2012.

A healthy financial position

At 31 December 2013, consolidated equity totalled €1,532million, €70million
more than one year earlier. Net debt stood at €416million, a decline of
€140million from year-end 2012 thanks to a high level of cash generated from
operations, which amounted to €201million.

With debt-to-equity of 27% (versus 39% at 31 December 2012) and debt-to-EBITDA
of 0.87 (1.17 at year-end 2012), Groupe SEB ended the year with an even
stronger balance sheet, backed by a solid, diversified financing structure.

Ordinary dividend

At its meeting on 25 February 2014, the Board of Directors decided to
recommend setting the 2013 dividend at €1.39 per share, an increase of 5.3%
over the previous year. The increase takes into account the Group’s
performance in 2013 and reflects the Board’s confidence in the Group’s future.
The shares will be quoted ex-dividend from 19 May and the dividend will be
paid as from 22 May.

Outlook for 2014

2014 will probably be shaped by a still-contrasted economic environment. The
currency-related challenges that adversely affected Group results in 2013 are
continuing and appear to be having a much more severe impact this year.

In terms of market demand, for 2014, the Group is forecasting a slightly
improved situation in France and continued strong momentum in the Americas and
China. For the rest of Europe, however, the Group is taking a more cautious
approach given that 2013 was an exceptional year that constitutes a high basis
for comparison. It is also much more reserved with regard to Russia, where
consumer spending remains very sluggish.

Although highly competitive and promotion-driven, the worldwide small domestic
equipment market is expected to keep on trending favourably overall and
generally be responsive to innovation. That’s why the Group will maintain a
strong product dynamic, and continue to invest in sales, advertising and
marketing, while ensuring that its operating efficiency is optimised and its
costs are effectively managed.

This firm demand combined with the commitment to pursuing its development with
an extensive portfolio of products should enable the Group to generate
sustained organic revenue growth in 2014. Given the current exchange rate
situation and despite the positive impact of our revenue growth, we will take
the necessary and relevant actions to partially absorb the very high currency
effect that we anticipate on the operating result from activity. Against this
backdrop, the Group aims at ensuring growth in its markets and pursuing to
improve Operating result from activity at constant exchange rates.

Appointment of a new Director

At its meeting on 25 February 2014, SEB SA’s Board of Directors, following the
recommendation of the Nominations and Remunerations Committee (NRC), appointed
the Fonds Stratégique de Participations as a Director. A French investment
fund, FSP acquired a 5.25% stake in SEB SA last June.

FSP will replace Philippe Lenain, who has decided to leave the Board after 14
years of service.

The Board of Directors has also welcomed Mrs Catherine Pourre as the permanent
representative of FSP. Under NCR recommendation, the Board of Directors
considered FSP as an independent director. It appointed Mrs Pourre to the
Audit Committee as its Chairman, replacing Mr Lenain.

A graduate of France’s ESSEC business school, Mrs Pourre, 57, began her career
at PricewaterhouseCoopers, where she was a Partner from 1989 to 1999. She then
joined Cap Gemini Ernst & Young as Executive Director in charge of the High
Growth Middle Market. She was also a member of the Executive Committee France.
In 2002, she was hired by Unibail-Rodamco as Executive Vice-President in
charge of Finance, Information Systems, Human Resources, Organisation and
Property Engineering, prior to serving as Executive Director of Corporate
Functions and as a member of the Management Board from 2007 to September 2013.
Mrs Pourre has been a member of Neopost’s Board of Directors since 2010 and a
member of Bénéteau’s Supervisory Board since January 2014.

The appointment will be submitted to shareholders for ratification at SEB SA’s
Annual General Meeting on 15 May 2014.

Groupe SEB's 2013 consolidated and company financial statements were approved
by the Board of Directors on 25 February 2014.

The Registration Document will be filed with the AMF on 31 March 2014. The
Annual General Meeting will be held on 15 May in Paris.

The world leader in small domestic equipment, Groupe SEB operates in nearly
150 countries with a unique portfolio of top brands including Tefal, Rowenta,
Moulinex, Krups, Lagostina, All-Clad, and Supor, marketed through multi-format
retailing. Selling some 200 million products a year, it deploys a long-term
strategy focused on innovation, international development, competitiveness and
service to clients. Groupe SEB has nearly 25,000 employees worldwide.

                                       
Consolidated Income Statement

Year ended 31 December
                                                                
(in € millions)                          31/12/2013  31/12/2012  31/12/2011
                                                                    (a)
Revenue                                   4,161.3      4,059.7      3,963.3
Operating expenses                        (3,750.9)    (3,644.3)    (3,508.9)
OPERATING RESULT FROM ACTIVITY (a)        410.4        415.4        455.0
Discretionary and non-discretionary       (37.2)       (48.2)       (43.9)
profit-sharing
RECURRING OPERATING PROFIT                373.2        367.2        411.1
Other operating income and expense        (9.5)        0.4          (8.9)
OPERATING PROFIT                          363.8        367.6        402.2
Finance costs                             (31.0)       (29.3)       (19.1)
Other financial income and expense        (23.9)       (33.4)       (7.8)
Share of profits/(losses) of associates   -            -            -
PROFIT BEFORE TAX                         308.9        304.9        375.5
Income tax expense                        (87.2)       (94.2)       (113.1)
PROFIT FOR THE PERIOD                     221.7        210.7        262.4
Minority interests                        (22.0)       (16.5)       (26.4)
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS     199.8        194.2        236.1
EARNINGS PER SHARE (in €)
Basic earnings per share                  4.13         4.07         4.93
Diluted earnings per share               4.08        4.01        4.81
                                                              
(a) Adjusted for the retrospective application of IAS 19R


Consolidated Balance Sheet

At 31 December
ASSETS                                                        
(in € millions)                        31/12/2013  31/12/2012  31/12/2011
                                                                  (a)
Goodwill                                448.2        461.7        464.5
Other intangible assets                 411.8        434.0        445.7
Property, plant and equipment           485.9        491.0        475.5
Investments in associates
Other investments                       57.4         38.0         57.4
Other non-current financial assets      9.5          9.1          9.5
Deferred tax assets                     52.0         47.9         48.3
Other non-current assets                6.0          9.0          7.7
Long-term derivative instruments        -            -            0.3
NON-CURRENT ASSETS                      1,470.8      1,490.8      1,508.8
Inventories                             731.0        681.0        702.2
Trade receivables                       740.2        835.8        828.4
Other receivables                       116.7        83.8         71.6
Current tax assets                      33.3         41.0         57.6
Short-term derivative instruments       2.8          14.9         7.8
Cash and cash equivalents               426.3        398.7        196.0
CURRENT ASSETS                          2,050.4      2,055.1      1,863.5
TOTAL ASSETS                            3,521.2      3,545.9      3,372.3
                                                            
EQUITY & LIABILITIES                   31/12/2013  31/12/2012  31/12/2011
(in € millions)                                                   (a)
Share capital                           50.2         50.2         50.0
Reserves and retained earnings          1,414.2      1,372.7      1,261.6
Treasury stock                          (74.7)       (91.1)       (93.3)
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS   1,389.7      1,331.8      1,218.3
MINORITY INTERESTS                      142.6        130.3        123.4
EQUITY                                  1,532.3      1,462.1      1,341.8
Deferred tax liabilities                71.3         82.0         79.0
Long-term provisions                    180.9        179.7        157.8
Long-term borrowings                    627.0        653.6        534.1
Other non-current liabilities           33.3         30.8         26.8
Long-term derivative instruments        -            -            1.5
NON-CURRENT LIABILITIES                 912.5        946.1        799.3
Short-term provisions                   45.6         50.6         62.1
Trade payables                          524.8        508.0        515.6
Other current liabilities               251.3        239.7        238.7
Current tax liabilities                 26.6         31.4         66.7
Short-term derivative instruments       13.5         9.5          16.1
Short-term borrowings                   214.6        298.6        332.1
CURRENT LIABILITIES                     1,076.4      1,137.7      1,231.3
TOTAL EQUITY AND LIABILITIES           3,521.2     3,545.9     3,372.3
                                                                  
(a)Adjusted for the retrospective application of IAS 19R

Contact:

Investors / Analysts
Groupe SEB
Investor Relations
33 (0) 4 72 18 16 40
comfin@groupeseb.com
Isabelle Posth, Vice President Financial Communication and Investor Relations
Emmanuel Fourret, Investor Relations Manager
or
Media Relations
Image Sept
Estelle Guillot-Tantay
Caroline Simon
+33 (0) 1 53 70 74 93
Fax: +33 (0) 1 53 70 74 80
www.groupeseb.com
 
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