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spk00: Thank you. Good morning to all of you, and thank you very much for joining this call to present Maison du Monde Full Year 2022 results. I am Carole Alexandre, Head of Investor Relations. I am with our CEO, Julie Valbaume, and our CFO, Régis Mathieu, who will be making today's presentation. It will be followed by a Q&A session. François Melchior de Polignac, Deputy CEO, is also with us and will say a few words about his first weeks at the company. You have no doubt seen the press release we issued this morning. The conference call slide can be downloaded from and viewed on our website, corporate.mesondumont.com. This call is also being audio webcast and a replay will be available on our website later today. All listeners are reminded to read the forward-looking disclaimer on the slide too. I will now turn the call over to Julie Valbon. Thank you, Carole.
spk04: Good morning, everyone. I hope you are all doing well. I am pleased to hold this financial results review with you today for the last time before I hand over to François Melchior de Polignac in a few days. And before I walk you through our presentation, I'd like to give the mic to François Melchior so that he can introduce himself and share his first impressions of Maison du Monde.
spk01: Good morning, everyone. And of course, thank you, Julie, for your warm welcome to Maison du Monde since end January. After these few weeks in the company, I'm sure you're all very eager to hear more about my views on our roadmap. But I am first going to complete my diagnosis before coming back to you in May with greater clarity on Maison du Monde's 2023 priorities and roadmap. What I would like to do today is to briefly introduce myself to you and share with you my first impressions. I've worked 22 years at Carrefour after previous experiences at L'Oréal and at the Boston Consulting Group. At Carrefour, I held a number of positions both at headquarters and country level. On the functional side, these range from M&A associate to leader of cost reduction or FNCG global initiatives, or more recently, group executive in charge of merchandise and procurement. On the operational and general management side, I've notably been in charge of Carrefour supermarket business unit in Poland and CEO of Romania and Belgium. In my last position at Carrefour, I was executive director in charge of Belgium, Romania, and Poland. I'm not saying this to share my resume, but because I feel it gives you a hint of the kind of experiences and know-how I will bring to Maison du Monde from March the 15th. Now about Maison du Monde. Julie told you about the company's many strengths, and I can only agree, this is what attracted me to the company. I have spent my first few weeks meeting our teams across all our markets in Europe, in stores, in our main distribution center, and at headquarters. I was able to appreciate their skills, professionalism, strong commitment to the group's values and raison d'être, and their determination to deliver the company's business and financial agenda. These first weeks have confirmed my enthusiasm for the company's potential and my confidence that Maison du Monde has many strong assets on which to build. They notably include its strong omnichannel model, its ability to develop new avenues of growth, such as the marketplace or B2B, a brand that has strong recognition and enthusiastic followers on social media, and last but not least, highly engaged teams. Over the next few weeks, I will work with the teams and I will further listen to our customers to adapt our roadmap for the year wherever necessary. I very much look forward to our next meeting in May to get a chance to share this and more with you. For now, I will leave you with Julie and Regis to discuss the company's 2022 performance and the current trading. Thank you to all of you for your attention and I look forward to my future exchanges with you And I will be happy to answer a few questions in the Q&A.
spk04: Thank you, François Melchior. Maison du Monde is indeed a great company with plenty of assets and also opportunities. And I wish you again, together with the teams, brilliant success in this new chapter. Now, back to the agenda. As you see on slide four, it will follow the typical sequence. I will begin with an overview of the key business and strategic highlights of last year. Regis will then take you through our numbers and also our 2023 outlook, and we will then open the floor to your questions. So let's begin on slide six with our 2022 business and strategic highlights. Throughout most of last year, we operated, as you know, in a very challenging environment marked by the war in Ukraine and soaring inflation across Europe, which naturally impacted consumer confidence and led to sharp deceleration of spending. from Q2 onwards. Inflation also massively impacted our cost base, with a €90 million impact on EBIT coming from negative externalities, including €65 million for the sole freight component. This means three-quarters of our 2021 EBIT base was swept away because of inflation. Against this, we implemented a forceful action plan to support CERTS and also to protect profit and cash. Thanks to this strict discipline, we reached or exceeded our updated financial targets as I'll detail in the next page. On top of managing the cost and cash equation, we continue to advance our strategic agenda as our vision has always been to create short and long-term value. So let me highlight a few achievements of the year. On the strategic front, After a successful launch in France, we rolled out our curated marketplace in two new markets, Spain and then Italy, with very encouraging initial results. We also launched our second distribution center, which is a key step in improving customer experience and also operational efficiency going forward. Finally, we launched our good is beautiful CSR brand movement, a series of bold commitments that put sustainability at the heart of everything we do. On operations, we made new advances in strengthening our brand with the launch of inspiring high-profile product collaborations and an enhanced omnichannel commerce customer experience. We further ramped up the digitization of our commercial model, notably through the implementation of a new IT omnichannel authoring platform that allows our teams to further drive store-to-web traffic and sales. Also, the launch of our first retail media solutions, a very promising new avenue. We also accelerated our B2B operations with solid growth across our direct and online sales channels and the deployment of our first business corners in our stores. Finally, we made a major step in improving our sales and operations organization, notably through the strong reinforcement of our purchasing and planning capabilities. On the financial side, we were able to contain the erosion of gross margin through forceful negotiations with our suppliers. doing better than our cost-saving initial objective. We have succeeded our AGM adjustment objectives through strict and continuous discipline at all levels of the organization. Finally, in the context of necessary inventory replenishment, we optimized cash generation through active working capital and capex management. Maison du Monde will be continuing this discipline this year with new initiatives that are already underway. While we do acknowledge the performance in 2022 was below what we initially expected at a time when no one honestly could foresee a war starting in Ukraine and its extensive impact all over the globe, we do want to highlight that the actions we took delivered the aims on the financial side and have laid the foundations for a stronger business looking forward. On slide seven, you can see that our financial performance in 2022 was in line with the edited guidance we provided last May. Our sales were down 5.1%, in line with our guidance of a decrease in the mid-single-digit range. It's worth noting that while they were down year on year, our full-year sales are up 5.1% versus the pre-COVID level in 2019, showing that we emerged strengthened from the crisis. Also, in GMV terms, which more accurately reflects our commercial performance, our revenue amounted to 1,337,000,000, that is down only 1% year-on-year and up 13% versus 2019. Our EBIT margin at 5.5% was in the higher range of our guidance of 5% over both. Indeed, our EBIT neared 69 million euros as we offset about half of the inflation impact of 19 million euros through our cost containment plans and selective price applies. and free cash flow of 32 million euros was above our updated guidance of 10 to 30 million euros. Our performance translated into earnings per share of 0.80 euros, and we will propose to our shareholders a dividend of 30 cents per share at our next AGM, which amounts to a payout ratio of 37%. On slide eight now, we focus on the key commercial initiatives that strengthened Maison du Monde as a direct-to-consumer love brand through three pillars, creativity, inspiration, and engagement. The creativity of our brands and the quality of our in-house design collections was underscored by a 30% increase in press mentions this year. We also launched our first series of desirable and sustainable product collaborations in line with our brand mission. The first was with influencer Lisa Gachet, renowned for being the founder of the creative and inclusive brand called Make My Lemonade. for a collection of decoration products inspired by the Memphis movement. We followed this with a new collaboration with Sakina Amsa, the pioneer of sustainable fashion, who designed an exclusive collection of tableware and home products that celebrate exceptional women such as Camille Claudel or Frida Kahlo. These collaborations have generated a reach of 5 million users with our community, which is big numbers for collapse. The profits from the collections have been donated to La Maison des Femmes, an NGO that fights violence against women in accordance with our good and beautiful CSR brand movement. Second, inspiration. This year, we opened 16 new suits in the Maison du Monde Hotel and Suites in Marseille, one of the three hotels we have opened in partnership with the Vicartem Group to showcase our collection to business customers. We also carried out an innovative collaboration with the Stade de France to revamp several spaces inside the iconic stadium. We also organized and hosted successful influence events, most notably the fourth annual event on interior design trends, which attracted more than 2,000 architects and designers eager to hear our views on home and living. These are all opportunities to raise our brand awareness and profile while connecting with engaged communities. And finally, engagement. Maison du Monde's global social media community grew by 5% year-on-year and by 70% versus 19, reaching 8.6 million followers across Europe. The number of videos seen on Instagram and TikTok rose 8-fold versus 21, translating into an increasing engagement with our communities and social media, with a cumulative reach of over 600 million views. As a result of all this, and thanks to our highly committed teams, we are proud that for the sixth consecutive year, Maison Dumont was recognized as the second favorite home and living brand in France just after IKEA. On slide nine, we focus on the success of our B2B business, which has shown appreciable growth in the context of soft consumption across both. On the left-hand side of the slide, you see how we are structured and how we are generating cross-channel synergies. In addition to a dedicated sales rep team, we are also selling our B2B offering through our web and also our stores. To accelerate B2B growth, we have recruited more sales agents last year on the ground and also boosted online investment. These two channels have shown spectacular growth year on year, respectively of plus 26% and plus 13%. We now want to further boost B2B sales at store levels. This is why we opened at the very end of 2022, a first series of five business corners in selected French and Italian stores. All in, B2B delivered in 2022, GMV of 73 million euros as B2B customers also buy some of our marketplace products. This GMV number is at 6% versus 21 and 9% versus 19. Of the total, 48 million euros were generated by our business sales rep team and also by the web, and another 25 million euros were generated in-store. We believe B2B is a promising growth avenue, building on a strong value proposition. Indeed, we have a dedicated offering of over 500 products exclusively designed to address business customer needs. We can also offer them a distinctive end-to-end experience, from interior design service, to all the delivery and assembly. The marketplace is an additional benefit as it allows us to offer some specific products that our own catalog person has, which increases basket size and profitability. Our MCM hotels and suites in partnership with the Carlson Group are a great living showroom for our B2B products and did boost our hotel's customer base. A great driver to increase B2B sales is to raise awareness of the service. We did that through active presence on PR, influence in social media, or also high-profile partnerships such as the one with Standard France. And this is working, as shown by the threefold increase in unaided awareness versus 2019 in our interior designer segment. Our B2B position is a great asset to Maison du Monde and a promising growth driver for the group. On slide 10 now. We have a look at our industry-leading digital first on internal model. In 22, over half of our sales and 55% of our GMV was digitally driven. Of that total, 29% of group sales came from online purchases, and another 23% were digital sales carried out install, what we call click install sales, for a combined share of 52%. Both the share of online and the share of click install are way ahead of our industry, which underlines our capacity to win in an increasingly digital retail economy. Now talking about our customers, our active customer base of 7.2 million people was down 4% year-on-year due to the soft consumption environment, but it was at 4% versus 2019. And our active customer base included 3 million new customers in 2022, which shows the capacity of our brand and product to attract new buyers, even in the context of constrained purchasing power and item competition. Finally, the number of initial customers was up 8% year-on-year and 50% versus 2019. On slide 11, we zoom in on the performance of our marketplace, a key part of our digital first omnichannel strategy, which demonstrated its success abroad as much as it did in France. In 22, marketplace GMV was 112 billion euros, doubling versus 21. Since its launch in November 20, the marketplace cumulative GMV reached 175 million euros. As you see on the chart, marketplace GMV has strong momentum rising steady quarter after quarter since Q2 of 21. Growth is still driven by France with marketplace GMB of 93 million euros, which is up 80% year-on-year. But we are also seeing very solid growth at our Spanish marketplace, which was launched at the end of March and met with immediate success. Over nine months, it's already delivered 15 million euros in GMB. And similarly, we are seeing the same encouraging numbers from Italy, where we launched At the end of Q3, after a few months of operation, the Italian marketplace posted GMV of 4 million euros. Overall, the marketplace accounted for 25% of Group's total online GMV in 2022. The continued success of our selective and omnichannel marketplace demonstrates our ability to maintain our competitive edge on digital. Indeed, the marketplace has a number of benefits. First, it drives incremental sales, and we've observed that in 20 numbers. When we have product shortages in our own MDM catalog, the marketplace offers adequate substitutes. And in periods where consumers are particularly price and promotion sensitive, the marketplace offers a high share of discounts compared to our own offering, which is, as you know, a low-discount model. In those cases, the marketplace attracts traffic and customers we otherwise would have lost. and some of these customers end up buying Maison Duvent products. Thanks to this complementary offering, we have been able to protect and even improve in the second half our online market share in 2022, despite a lower product availability and discount levels. Second, as you well know, it is a creative margin, especially so at international level. Indeed, we have a European-wide South Commission margin, and our transportation costs are higher when we ship goods to customers far away from our warehouses, So it's excellent news that our marketplace is at least as successful outside of France as it is on our domestic market, as it should materially enhance our omnichannel profitability once ramp-up is complete. Third, it is a key success factor in our customer acquisition strategy. Indeed, our marketplace, through its vast catalog, drives much more than its fair share in new customers to the group. Finally, it drives a very high number of organic, that is free, visits, which improves our overall online marketing ROI. This is a key asset overall on which to build going forward. On slide 12 now, we turn on our store network, which we continue to optimize through a highly disciplined and pragmatic approach. At the end of 22, we operate 357 stores, which is 5 more than at the end of Q3, and the same number as at the end of 2021. This is the result of 13 openings during the year, of which 7 in France and 6 in the rest of Europe, and the same number of store closures, of which 9 in France and 4 in the rest of Europe. As a result, on a net basis, we had 2 fewer stores in France and 2 additional ones in the rest of Europe at the end of the year. We continue to see tools as a key part of our omnichannel strategy, but in the current context, we continue to be very cautious and disciplined in the pace of developing our network and remain very attentive to the evolution of our category. On slide 12, we focus on the progress made during the year on our EAG journey and notably on our Good is Beautiful CSR brand movement through our five commitments. On the E part of ESG, we continued to develop our sustainable product offering with 30% of our 23 collections now labeled Good is Beautiful, which is a 10-point gain year-on-year, which is ahead of our 25 trajectory. And the number of furniture items repaired or repackaged grew by 42% to 25,000 products. Overall, we achieved a 20% reduction in carbon intensity across Scopes 1, 2, and 3, also ahead of a 25 trajectory, and an 8% reduction of our carbon footprint, well in line with our SBTI-approved target of minus 15% by 2030. I would also highlight that the vast relamping program we undertook a couple of years ago across the entire network to move from halogen lamps to LED lighting not only contributed to the carbon footprint reduction, but also mitigated the cost impact of rising energy prices last year. and this program was complemented by a comprehensive energy savings plan across Europe. Finally, the Maison du Monde Foundation donated 1.3 million euros to NGOs in 2022 to preserve trees and forests, both from its own funds and also from Maison du Monde customers, through the Running Up at the Teal system. On the S, that is social, part, Maison du Monde continued to progress on its diversity and inclusion program, First, in the highly inflationary context, we granted exceptional allowances to support employees purchasing power, representing an average cumulative amount of 800 euros per employee across headquarters and stores in Europe. We also continue to promote equal opportunities, notably through apprenticeship programs for young employees at our stores and headquarters. We also doubled the number of disabled people in our teams, combined with training sessions to raise awareness among panachers. Furthermore, Maison du Monde actively promoted equal opportunities for women. 50% of our top positions are now occupied by women, and through a forceful action plan, we reached a gender equality index of 91%, up from 82% one year ago, which puts us among the best in class. In December 2022, we signed a new three-year gender equality agreement with ambitious measures in favor of parenthood, work-life balance, and women's leadership. Finally, on the GPAR, the board's dedicated CSR committee started operating, concerning Maison du Monde's ambition on the environmental and social fronts, and ESG objectives have been included in the variable pay of all our managers. Our ESG performance has been recognized once again by a number of leading non-financial agencies. MSCI has granted us, this year again, an A grade. CDP gives us a B grade, also stable year-on-year, and better than the average C grade of discretionary retail. Finally, System Analytics keeps us among the top 5% in global retail, and this year they've nominated us Industry Top Rated ESG Company. With this, let me hand over to Régis for the financial section and our 2023 outlook.
spk02: Thank you, Julie, and good morning to everyone. I'm really happy to be with you again to give you more color on our full year performance and update you on our action plans. I will start on slide 15 with our sales bridge, a classic. As you see on the slide, our sales in 2022 stood at 1.24 billion euros. They are down 5% versus the previous year as a result of a combination of sub-category sales post-pandemic and low consumer confidence. This is in line with the updated guidance we communicated last May. They come on the back of a robust, comparable base as 2021 had benefited from a rebound in activity after a tough 2020 which had been marked by COVID-related lockdowns. However, As described by Julie and compared to 2019, our sales are actually up by 5% versus pre-pandemic levels, which attests to the strength of our omnichannel model and the attractiveness of our author. The slide shows you the different building blocks of our 2022 performance. The main component of our lower sales in the period is a drop of 87 million euros in like-for-like sales due to the challenging comps and soft consumption patterns. This drop was partly offset by a contribution of 21 million euros on a net basis from stores opened in 2021 and 2022. Let's move on slide 16. We look at the sales performance here in greater granularity by breaking it down by quarter to allow you to visualize the sequence of our sales as COVID created a complex reading on a year-on-year basis. Again, the graph shows a dual trend, with a year-on-year drop in each quarter of 2022 owing to tough comps and consumption trends, in line with our revised projections, but a better performance in each of these three quarters versus the same period in 2019. In more details, the graph illustrates the downward trends in home and furniture sales we saw beginning in Q2, and more specifically as of May. We also observed changing sales dynamics. On the one hand, in-store, traffic was 7% down in H2 versus 2021, and web sales normalized after the pandemic-related surge. On the other hand, within our online sales, we saw a strong acceleration of the marketplace, and in terms of segments, we saw strong growth in B2B, as Julie just described. Recent performance, confirms a soft trend of consumption at the moment and still a low consumer confidence in an environment that remains strongly impacted by a very high level of inflation. I will come back later in this presentation on our current trading. Stepping back to take a longer term view, our full year performance in 2022 is well above the pre-pandemic level with group GMV of 1.34 billion euros, up 13% versus 2019, demonstrating that we have strengthened our business while navigating in a highly challenging environment. Moving now to slide 17, which breaks down ourselves by category, channel, and geography. Here, too, there is a contrasting picture between a tossier New York comparison and different picture when comparing with pre-pandemic levels. I will start with category. Both furniture and decoration sales were down year on year, with furniture drop more pronounced at minus 7%, while decoration was down by 4%. Furniture sales reflect product availability issues that we saw at the start of the year in certain product families, including some best seller products. These were particularly apparent in Q2, when furniture sales were down 14%. However, our team's effort to rebuild inventory led to significant progress in inventory replenishment, with an immediate availability ratio of around 80% at year-end versus 72% at the end of September and 58% at the end of June. Through these efforts to ensure better supply, we managed to reduce the year-on-year drop in furniture sales to minus 8% in Q3 and minus 1% in Q4. Compared to 2019, furniture sales were down 4%, largely, as a result of those supply issues, but also postponing mid-consumption trends. Decoration. Decoration sales on the other hand were up by a strong 12% versus 2019, and were more resilient in the current context of consumption in 2022. With its broad decoration offering, Maison du Monde remains attractive with various price ranges, and our good management of commercial activities enables the company to navigate through a subcategory trend. Decoration sales accounted for 60% of total sales in 2022, up from 54% in 2019. Looking at channels, store sales were broadly stable both year-on-year and versus 2019, illustrating a very soft trend and decreasing traffic. Online showed a mixed picture, with sales decreasing 16% year-on-year as traffic normalized after a massive pandemic-related boost. But compared, to 2019, online sales are still up 21%, showing a lasting change in consumer patterns. It is important to now fully consider the role of the marketplace in those figures, as commented by Julie. If we refer to online GMV to include the consumer value creation of the marketplace, online GMV is only down 5% versus last year, in line with the sector. Online sales are 29% of the total, compared to about 25% in 2019, and online GMV is still a strong 34% of total group GMV. Finally, concerning geographies, sales both in France and in international markets were down by 5% in 2022. If we look at the international picture in greater detail, Italy, Spain perform a bit better than other non-French markets. Compared to 2019, we see that international markets have grown strongly, 14%, to represent today 46% of total sales, while France is broadly stable, down 1%, notably considering a decrease of the network footprint of 16 stores versus end of 2019. Closing on sales, and now going on slide 18, Before entering in detail in the analysis of profitability, I would like to spend some time on what is our permanent approach to manage our equation. At Maison du Monde, our constant focus is to strike a fine balance between driving sales growth through the implementation of strategic initiatives on the one hand and ensuring profitability through cost and cash discipline on the other hand. This means navigating between being agile with short-term tactical moves to adapt to the market and being clear and firm on our mid-term strategic ambitions. In the post-COVID world, this is an increasingly complex balancing act. In a year that was marked by weak consumption and an extraordinary inflation that impacting the specialized retail, the home and decoration category, In a context of consumer uncertainty concerning the evolution of purchasing power, we are implementing, as of May, a strict cost containment plan to protect cash generation and gross margin, without losing sight of our medium-term aims. On the following two slides, we will see how this translates on the EBIT and cash flow lines of our P&L and metal chips. Let's start then on slide 19 with our EBIT margin that landed at 5.5, fully in line with our updated guidance of 5 or above. The waterfall on the slide shows you how we achieved this despite strong inflationary headwinds. I think it is important to pause and to flag the overall effect of inflation in 2022. If we combine all elements in gross margin, logistics, SG&A, The full impact of inflation on our equation was around 90 million, i.e. around 700 bps in a context of sales decrease, out of which 65 million coming from freight. If we consider the 12 million of 2021 COVID one-off not repeating in 2022, we come to a total of 100 million of externalities. In reaction to this unprecedented adjustment, we managed to largely offset this through our action plan on pricing, operational efficiencies across the board, and strict cost containment for a total of more than 550 basis points. Let's start more in detail with growth margin, which was resilient at 64.7%, down 180 bps year-on-year, but higher than we planned at the end of H1. We succeeded in managing well higher freight and raw material costs through efficient, firm negotiation with key suppliers and freight forwarders, reviewing contracts, and negotiating rebates. We also managed very well euro-dollar exposure, folks, thanks to our aging approach to mitigate fluctuation. Your-on-your effect is not material in 2022. It could have been much worse on this aspect, considering the effects context. We put in place as well a dynamic pricing strategy to gradually pass on rising costs and increase discount activities, limited this increase of discount to a level comparable to pre-COVID, with the objective to remain agile regarding consumer trends. We'll also manage our mixed wealth, focusing on higher margin decoration products. Altogether, this enables us to contain the decrease in relation to inflation costs and makes us confident we can return in the medium term to our historical level on gross margin. On logistics, we continue to implement measures to increase efficiencies on transport and warehousing, to adjust efficiently operations to changes in our channel dynamics, and also to adapt our organization to enhance flexibility and be as variable as possible in a context of negative sales trend. This helps absorb the cost of the opening of our second distribution center that remains very important for our mid-term agenda. On SG&A, we managed to keep our costs stable through significant cost savings to offset inflation, notably surging energy prices, a make-up for the absence of one of COVID-related subsidies on unemployment and rentals that we benefited from in 2021 for a total of 12 million euros. The forceful initiatives put in place as of the end of Q1 in reaction to strong category trend adjustments delivered fully above our initial ambition. We have decided to maintain and complement those measures to make sure we keep the right agility in our resource allocation approach. Awards and energy cost. This was obviously a major issue for all companies, but we were able to largely mitigate this thanks to our efforts in the past to become much more energy efficient for a lead relamping program in our stores. We have reduced our consumption by 30%. And with the combination of well-anticipated negotiations with energy suppliers in each country, we limited the effect of energy to 5 million euros. In 2022, we also managed our marketing expenses with great discipline, reducing them overall by 7%. while focusing them on strategic priorities and notably the ramp-up and internationalization of our marketplace. Concerning DNA, as you see on the waterfall, DNA increased due to higher amortization, depreciation and effect of IFRS 16 treatment on higher rents for a total of 3 million euros and accounts for a negative 90 bits approximately due to sales decrease. So overall, While we lost operating leverage due to the negative performance in sales and faced again an extraordinary level of inflation, we managed to contain our costs and will continue this effort in 2023 in order to return sequentially to higher profitability levels. Let's now turn on slide 20 to free cash flow. As shown on the slide, it was down by 58 million euros in the year to 32 million euros. but this is slightly above the high end of the range we guided to in May of between 10 to 30 million euros. Cash flow was mechanically impacted by euro sales and EBITDA and the need to replenish inventory that ended below 250 million euros. This is lower level versus June, 270, thanks to good management of inventory in H2 via sourcing and commercial activities. but still up versus end of 2021. It led to a slightly higher working cap to total sales ratio of 1.3%, but we succeeded in limiting this impact through more favorable payment terms with key suppliers, adjustment to working capital requirements, and very disciplined allocation of resources. In relation to this, CAPEX amounted to 67 million euros. This is up 15 million, compared to 2021, but it's below our initial estimate of €90 million, while preserving investments in key strategic projects such as the marketplace or the second warehouse that we opened in 2022. If we exclude the opening of the second warehouse, CAPEX as a percentage of total sales was at 3.7%, stable versus 2021. On slide 21, you see that our earnings per share in 2022 stood then at 80 cents compared to 1.52 in 2021, excluding modernity proceeds. The main effect is in relation to the sales evolution and the margin adjustments that I commented on. At our shareholders' assembly to be held on June 29th, we will propose a dividend of 30 cents per share. This represents a payout ratio of 37%, which is in line with our policy of paying out between 30% and 40%. We believe, indeed, it is very important to wear out our shareholders in today's challenging context, and we consider that this dividend illustrates as well our trust in our capacity to sustain positive cash generation and a solid balance sheet. Let me take the opportunity to give you a quick update on the second share buyback program launched in 2022 to buy up to 10% of our outstanding shares. At the end of January, we had completed about 54% of the program. The board of directors yesterday decided to cancel 2.3 million of the shares Maison du Monde has repurchased and that are held at the moment as treasury shares. This closes the financial part of this presentation. Let's now turn to our outlook on slide 22 with a trading update on the first quarter of this year. We continue to face headwinds with continued soft consumption from persistently high inflation, geopolitical tension, and social unrest in France amid further normalization of the home and furniture category after the atypical COVID period. If Christmas season and January sales delivered on expectations, the overall context remains complex, and we observed a soft level of demand, notably on high price points. Indicators of traffic or conversion show consumers' concern. At the same time, and it's a very important point, we are also facing a tough comparable base in Q1, as the drop in the category market began in Q2 of last year. In this context, Q1 has gotten off to a slow start. We expect Q1 to be the low point of the year, with sales down in the low double digits. That said, as of May, the comparable base will start to ease, and this will be even more the case in H2. In this environment of persistently soft trading conditions, we are very attentive to consumer behavior, and March-April will be important indicators to more precisely forecast the year direction. Maison du Monde is accordingly developing forceful initiatives to reinforce cost and cash protection in the continuity of what we put in place in 2022. We will continue to enforce a strict iron freeze at our headquarters, restrict discretionary spending to offset inflation, and continue to prioritize essential CapEx. The growth model I described previously is our framework to operate. When we next meet with you in May, we will specify our 2023 guidance with the benefit of a clearer view on how the year is shaping up and greater insights on consumption patterns. What I can say clearly at this stage is that the company is fully focused on 2023 priorities, further strengthening Maison du Monde's balanced growth model while improving store operations, customer service, to return to a higher level of profitability and cash generation. With that, Julie, Francois Melker, and myself are now happy to take your questions.
spk05: As a reminder, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Once again, to ask a question via the phone, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question again, please press star 1 and 1 again. If you wish to ask a question via the webcast, please type it in the question box and click submit. We are now going to proceed with our first question. And the questions come from the line of Clément Jeuneleau from Brian Garnier. Please ask your question.
spk03: Thanks, and good morning to all of you. Maybe two on my side. So the first one was margin. I understand that mix and promotions remain quite unclear. But could you give us the H1 and all your impacts of threat and ethics along the gross margin? And then just to come back on the Q1 itself, so where does the pressure come from? I mean, is it only France-driven or maybe all over Europe? Is it furniture? Is it in stores or maybe also online? Thank you.
spk02: Thank you, Clément. I will take those two questions and start perhaps with the second one on the current trading vis-à-vis the indicators we are observing at the moment. Indeed, again, I just want to re-emphasize the fact that the base of points is pretty high. I guess many of you have that. Currently, traffic and conversion are both negative. It's pretty much a European picture. In store, we observe negative low to mid single digit traffic evolution, negative versus last year, again versus last year, with a negative conversion. Again, I think it does reflect the current constraint on purchasing power. On the web as well, it's a negative low to mid single digit, but we have a more resilient conversion. It's notably on the back as well of the good performance of the marketplace. So to your question, it's not really about France. We have obviously different, very local dynamics, but overall the picture is pretty much the same regarding the consumer patent. Vis-à-vis your first question on gross margin for 2023, again, it's a mix of many elements. We all know that we will have a positive track coming from Pret. This is something we have been flagging for a moment. It materially will be visible in H2 because of the timing of time to the purchase. And at the same time, we will have negative Edwin coming from USD and different other elements. So I will not guide precisely on 2023 growth margin yet. I think there will be a two-tier momentum in between H1 and H2. I would like to come back to 2022 growth margin performance. I think we have proven the capability at Maison du Monde to improve growth margin versus our original expectation and to limit the effect of what has been externality coming from FRET. We had very good negotiation with suppliers. I think even if FRET is massive, adverse, negative versus 2021, we never paid what was visible on the spot and probably out of that so it does demonstrate our capability to navigate through this environment very positively so for 2023 I think this will be the moment of momentum obviously always managing our negotiation and then on the positive on the top line contribution of course margin we will manage promotion you mentioned that in your question as an instrument to keep agile vis-à-vis the current dynamic and trend of consumer.
spk07: Thanks, Régis. We are now going to proceed with our next question.
spk05: And the next questions come from the line of Marie-Lyne Faux from the Society General. Please ask your question.
spk06: Yes, good morning. My first question is about the prices. Do you expect to pass more price increase over 2023 and also to maintain your more pushing promotion policies that you implement in 2022? And the second question is about your online performance restated from the marketplace. It looks like you are down significantly. So my questions are, what does it say about the attractiveness of your brand online? And the second question is, are there really synergies between the marketplace and your online businesses? And are there real additional customers for MDM products?
spk04: Thank you, Marilyn. I'll take your second question around the marketplace. So indeed, the online sales were 16% down year on year, but they were 21% up versus 2019. So I think that's a very decent growth. It is true that the share of the marketplace out of total online sales did increase significantly, reaching 25% of online GMVs, about double the share of the year before. That's also because of international rollout. Does that mean that Marketplace is sort of cannibalizing direct online sales of Maison du Monde, which could be another way to put your question? I really don't think so, and figures don't show that. They do show that Marketplace does drive incremental sales. And as I was describing earlier on, this is very much also linked to the current context, well, actually to the context of 22, as we're speaking about that. we could see over the year, quarter after quarter, that the marketplace share out of online sales was going up and down at product family level, depending on the average availability level, meaning like when we had a low availability level on, say, mirrors or sofas, then the marketplace share was going up, but as soon as our products came back in, it was going down. So it was very much playing its role of complementarity, and we have all data demonstrating that. Now, it is true that in the context of very high price and promotion sensitivity, this is not where our Maison du Monde offering is the most competitive, right? It also explains our structurally high cross-margin. We run with low discount. And we don't want to extend them massively because it's not our model. So yes, we do increase that a bit, but it is true that in some contexts, such as the one that we're seeing now, people are very, very discount-driven. So it is true that the share of the marketplace is going up, but this is just out-of-market context. And again, for example, during the sales season in January, the Maison du Monde catalog also performed very well. So really, on the contrary, I do see that marketplace is a perfect tool to complement our Maison du Monde value proposition and to adapt to this changing market. you know consumer context and I trust that when the macro is evolving in a better way you know the shelf is on demand will also go up again with improved availability so this is only at self level now to your question around new customers it does indeed drive new customers to the group actually much more than its fair share we're saying like it's 25% of online GMV It's more than that at new customer acquisition level. And that is logical because it has such a vast catalog of products that people, you know, they often come out of a product ad on Google. So a lot of them come through marketplace products. And at the end of the day, they end up being Maison Du Monde products, either at their first purchase or later on. So it is very true to say that marketplace is not just a sales incremental driver, but it's also a very, very effective tool to optimize our marketing array and to acquire new customers to the group. So it's a very profitable driver for all of that. Not talking about being a creative to margins, but just answering questions here.
spk02: Thank you, Julie. Good morning, Marilyn. Back to your question regarding pricing and promotion for 2023. Both are part of the agenda. We will manage pricing at the rhythm of the launch of the new collection, as we did in the past, there will be some pricing adjustment. We have notably, in January, increased slightly pricing on furniture. And promotion definitely will remain part of the toolbox, I would say, as it was in 2022. But in the range of what we have been doing for a couple of months, just to put figures there, promotion was roughly at the level of 8%. in 2022, it's really close to the pre-COVID level that Maison du Monde applied to its pricing strategy, higher than in 2021, which was very low due to the business trend and product availability. Just to flag and frame what it could be in 2023, we do not envisage to go much higher than the rate of 2022 at this stage. but it remains an important tool to stay agile vis-a-vis the consumer trends and really use promotion as a tool to resume traffic notably in stores. So we will use promotion.
spk06: Okay, and in terms of pricing, what could be the price impact roughly?
spk02: Well, again, we will specify much more in detail in May. I think it's part of the different elements work still working out for the year. And again, there will be a net price effect this year in 2023 on the back of the carryover of what we have done in the past. But for future pricing approach, let's rediscuss in May once we have completely modeled the trajectory.
spk06: Thank you very much.
spk05: Once again, as a reminder, to ask a question over the phone, please press Star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 1 and 1 again. If you wish to ask a question via the webcast, please type it in the question box and click Submit.
spk02: I think we have a question of Julie Gasser regarding the convertible bond. So I will read the question so it's clear for everybody. I will refinance your convertible bond maturing in December 2023. Back to what we have done in the past, I just remind you that last year we extended and renewed our credit facilities to €150 million. We contracted a term loan, and we have a positive cash flow generation. So all in all, we are ready and ready to refinance the convertible bond by the end of the year. Another question coming from Angie. Angie, can you give some color on the cash flow items in 2023, including net working capital, debt repayment, and share buyback? Again, we will specify the guidance in May. It's valid for the top line for EBIT and cash flow direction. What I can say at this stage is just to rephrase what I said during the call. Our objective is to preserve and improve EBIT and free cash flow this year. So on cash flow, we are working on all elements to keep generating a positive cash flow year-on-year evolution.
spk07: We have another question from the phone line.
spk05: And the questions come from the line of Clay Margin-Lew from Brian's Garnier. Please ask a question.
spk03: Yes, thanks. Hi again. Maybe a last question for François Melchior. What's your first observation after a few weeks within the group? Where do you see the low hanging fruits and the other main challenges? Thank you.
spk01: Thank you for your question, Clément. As I said, I've really been deep diving into all our markets, going to the stores, also the warehouse, and starting to meet with all of the top 50 managers of the company. What I've been finding out is, of course, the strength of the model, as I said at the beginning, and also the very strong commitment of all the teams. So this is, for me, the first thing that I have to highlight when you ask me about what I've been seeing. Now, although hanging through, that could be a little bit too early to speak about them. Again, we said we'd go back to you with more detail in May. But certainly, as I think Hedges mentioned it, we'll be focusing on the very immediate term, very much on the store operations and the customer service and satisfaction. And again, happy to discuss that and much further in May.
spk05: We have no further questions at this time. I would like to hand back the conference to Julie Walbon, CEO, for closing remarks.
spk04: Thank you very much. So as I prepare to step down now after nearly nine years at Maison du Monde, first in charge of digital and marketing before becoming CEO in 2018, I would like to say how proud I am of all that has been achieved over the past few years and how thankful I am to Maison du Monde's fantastic team whom I've had the privilege to work with over the years. Amidst the profound transformation of the retail industry and a series of challenging macroeconomic events, out of which not all companies emerge unscathed, Maison du Monde has shown, in my view, remarkable agility and resilience. Over the past few years, Maison du Monde has successfully established itself as a truly European love brand with a distinctive, omniscient model and highly engaged customers. It has also built exciting and profitable growth avenues, including our marketplace and also our B2B segment. Furthermore, the group has renewed and reinforced its talent team and built, through enhanced processes and data, a more agile and robust organization. Finally, Maison du Monde has embedded its raison d'être into bold ambitions across all ESG dimensions, making CSR a central part of its brand and of its strategy. This unwavering commitment has established the company as a sustainability leader in the home and living industry. And this leadership position has become now a key factor in attracting top talent to our teams. And we know how important that is for long-term company success. These are all great foundations on which to build today. I know that Maison du Monde is in excellent hands to continue its journey with François Melchior. I wish him and the teams every success. And to finish, I would like to extend again my deepest gratitude to Maison du Monde's great teams for driving with me this material transformation over the past five years in what has been a busy environment. And I would like to say a specific thank you to Régis for his remarkable skill sets his tireless commitment and also his admirable ethics and values. Regis, it has been a great pleasure to work with you over the last two years. And finally, thanks to all of you on this call for your interest in the company and for our very interesting exchanges over the past few years. Thank you and goodbye for now.
spk01: Thank you, Julie, for your nice words. I would like as well, in the name of all associates, to thank you. Thank you for your commitment, for all the initiatives under your leadership that shaped Maison du Monde into a leader of its category, a unique and different company with a genuine CSR identity and meaningful raison d'être. On a more personal level, thank you as well very much for a fruitful and thorough handover. To all, let's take time in May to discuss more in detail the 2023 perspectives, and I'm certainly looking forward to meeting you soon in person. As usual, Carole and Régis are obviously available today and in the coming days. Thank you and have a good day.
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