FY 2020 Results

EBM: Maisons du Monde, European leader in inspirational and affordable furniture and homewares, reports full-year results for 2020. Julie Walbaum, Hello. 
 
Julie Walbaum: Hello, Adrian. 
 
EBM: You are the CEO of Maisons du Monde. Let me ask you first, what are some of your takeaways from 2020 and what does it say about your model? 
 
Julie Walbaum: Well, this year, Adrian was unprecedented, obviously, but it also attested to the strength of a model which relies on several assets. 
First of all, we can rely on highly committed teams who demonstrated their dedication and agility throughout the year. I am very proud of them and I would like to thank them warmly.
Second, we have very loyal customers, on the web and in-store: I was in store at every store reopening and I could witness our customers' enthusiasm every time. And we did see peak store sales at every store reopening, having in mind that our web recorded a very strong performance in the previous weeks. 
This year, our customers clearly demonstrated their attachment to our brand, which stands for inspiration, affordability and sustainability. 
On social media, we managed to engage with them in frequent conversations and this proved to be successful. Our new online customers have increased by 38% over the year, and our customers, who used to be store only and converted to e-commerce this year, have increased by 53%. 
Our Instagram community grew by almost half, and now exceeds 4 million subscribers. Our offering is also a key differentiating asset. 
This year we have substantially reinforced our creative team and raised our product quality and sustainability standards. For instance, we have launched our first OEKO-TEX collection that represents 25% of our global textile offer already. 
And last, we have reaped the fruits of our omnichannel strategy, that we’ve been implementing for several years, and which further ramped up with the launch of our curated marketplace on our French website in November 2020. 
Responding to our ambition to become the preferred lifestyle partner of our customers, fulfilling all of their home decoration needs, our marketplace includes more than 300 brands, carefully curated by our teams for their style, affordability, quality, and sustainability. 
Our store network is pivotal to this omnichannel approach. It is the place for inspiration, it is a place for advice. It reinforces proximity with our customers. And it is also a key logistic asset for digital, as proved by the success of click and collect during the second lockdown. 
Overall, one third of our online customers chose in-store delivery in 2020 for the decoration orders.
So, to sum up, our : 
1) Committed teams
2) Loyal customers
3) Strong brand
4) Differentiated offering
5) And omnichannel model
Were the 5 key assets that steered us through the crisis.
 
EBM: What are the highlights of your 2020 financial results?
 
Julie Walbaum: We are very pleased with our results, which demonstrate the agility and resilience of our model, in an unprecedented pandemic context. Our sales came in at nearly 1.2 billion euros, despite a total of three months of lockdowns. Our second-half performance was very strong, with sales up 4.8%, compared to last year. 
Our online sales accelerated, reaching one third of our 2020 total sales. Our EBITDA reached €241 million in 2020, resulting in a resilient EBITDA margin of 20.4%, thanks to cost containment throughout the year.
Our EBIT was €86 million with a margin of 7.3%– the decrease in EBIT was stronger this year due to the increase of amortization costs, mainly due to important investments in 2019. 
Let me remind that our store Capex which account for more than half of our total Capex, have a depreciation period over a certain number of years. Thus, the deceleration in store openings we have experienced in 2020 will only translate into EBIT a few years down the road.
Our cash generation was also robust, with a Free Cash Flow coming at €54 million, thanks to our reinforced cash management. Our cash position at year end was €297 million. 
All in all, a solid financial performance for Maisons du Monde in 2020.
 
EBM: What does the 2021 current activity look like? 
 
Julie Walbaum: We are approaching 2021 with confidence and caution at the same time. In 2020, we did demonstrate the adaptability and robustness of our fundamentals. However 2021 will still be complex, with a limited visibility, and important operational constraints, for our stores and also our supply chain between Asia and Europe. 
Currently, about 1/3 of our store network is either fully or partially closed, limiting our in-store commercial activity. 
On the other hand, online activity in January and February was significantly above its 2020 level, benefiting from the encouraging performance of our marketplace. Hence, our cautious confidence for the start of the year.
EBM: So what is your outlook for 2021? 
Julie Walbaum: As I said, we will still face challenges in 2021. But if the current trend continues, we could expect a solid performance in the first half of the year, benefiting from a positive comparable base.  Over the full year, visibility remains limited. And I can only refer to the current context we are experiencing today. 
As a result, under current sanitary and supply chain conditions, the Group is targeting a high single-digit top line growth for 2021, with a broadly unchanged number of stores at year-end. 
Our EBIT margin should improve up to 50 basis points higher than in 2020. Thanks to a reinforced cash management policy, our free cash flow should be above its 2020 level, while we will continue to rebuild our inventories. 
This performance will derive from the ongoing implementation of our strategic roadmaps, while making realistic choices in the current context. 
In the face of the Covid-19 pandemic impact in the USA, that stopped our expansion strategy there, we have decided to consider all strategic options for Modani, whose underlying fundamentals remain sound, and we decided to book a non-cash impairment charge.
We will come back to the market later in the year with a full update of our 2024 strategic plan. To sum up, 2021 should see us return to profitable growth and deliver stronger cash generation.
In this context, we have decided to restart paying a dividend.
 
EBM: In 2019, you announced a 5-year strategic plan, where do you stand now ? What are your strategic priorities for 2021? 
 
Julie Walbaum: We enter a new world.
We must manage more uncertainty and at the same time make clear choices. It’s also a more digital world. And a world that claims for more sustainability. We are fully in line with these evolutions and we do confirm our ambition to become our customers’ preferred lifestyle partner in the home sector. 
We will continue to invest in our offering, increasing its differentiation and relevance for our customers. 
We will continue to develop our brand, reinforcing its creative, affordable and sustainable positioning.
We will continue to reinforce our omnichannel model, by accelerating our digital growth and further integrating our stores and website ; this will be marked by the launch of our marketplace in-store in France by early 2022 and the digital roll-out outside of France in the course of 2022. 
To support our growth, we will continue the development of our second warehouse in Northern France. And we will also maintain a strict financial discipline, to manage our cost and optimize our cash allocation. Last but not least, we will reinforce our CSR commitments, improving the sustainability of our products and accelerating on circular economy.
As you see, the 2024 strategic orientations remain fully valid, and we are now focused on optimizing our resource allocation for a better shareholders return.
 
EBM: CSR does matter to you and is at the heart of your business strategy. What are your ambitions in this field?
 
Julie Walbaum: It’s been more than 10 years since Maisons du Monde has started to engage in CSR. In 2016, the company defined its first strategic roadmap with compelling KPIs over the next four years. The term of this plan was in 2020 and I am very proud of what the teams achieved.  
We mentioned our achievements on products before. If we look at our energy performance, we managed to reduce our in-store energy consumption by 25%. And 97% of our stores are now supplied with renewable energy. Today, we intend to further reduce this environmental footprint. 
This is a bold challenge, that we are very proud of and that will motivate us to innovate.
 
EBM: To conclude, what are your commitments to the women and men of Maisons du Monde?
 
Julie Walbaum: People are simply the engine of our company. They are our first asset and their commitment is remarkable. To continue to fuel this commitment, we have an ambitious plan for our people, supported by the whole executive committee. 
Our ambition is to become one of the most attractive employers of our sector and to engage our team in sustainable growth.
We have designed three main priorities to achieve Maisons du Monde’s HR project:

• the First one is to create a differentiating employee experience, by attracting new talents and reinforcing our career management policy. 
• the second one is to act as a responsible employer, by promoting well-being at work, providing equal opportunities and fostering diversity. Maisons du Monde is already well positioned in that field: ¾ of store managers and half of our executive committee are women.
• the third one is to support change management. 

 
Our environment changes, our company grows, our jobs evolve. We must support the evolution of our organizations and develop the expertise of our employees, encouraging their employability and their ability to better serve our customers every day. 
In a time where digital has a growing place in our lives, connections between employees and customers, is more essential than ever. We must give meaning to our actions and empower people to take part. That is how Maisons du Monde will stay true to its values and continue to be a unique company. 
 
EBM: Julie Walbaum, CEO of Maisons du Monde, thank you very much.
 
Julie Walbaum: Thank you Adrian.