2017 RESULTS March 21 st , 2018 Daniel Lalonde, CEO Philippe - - PowerPoint PPT Presentation

FULL YEAR 2017 RESULTS

March 21st, 2018

Daniel Lalonde, CEO Philippe Gautier, CFO & Operations Director

DISCLAIMER

The financial figures included in this presentation are extracted from the consolidated financial statements of SMCP for the 20-month financial year ending December 31, 2017, which include, for comparison purposes, information on the 12-month period ending December 31, 2017. *** Certain information contained in this document may include projections and forecasts. These projections and forecasts are based on SMCP management's current views and assumptions. Such statements are not guarantees of future performance of the Group. Actual results or performances may differ materially from those in such projections and forecasts as a result of numerous factors, risks and uncertainties. This document has not been independently verified. SMCP makes no representation or undertaking as to the accuracy or completeness of such

• information. None of the SMCP or any of its affiliates representatives shall bear any liability (in negligence or otherwise) for any loss arising from any use of

this presentation or its contents or otherwise arising in connection with this presentation. For more information regarding these factors, risks and uncertainties, please refer to the information contained in the documents filed with the French Financial Markets Authority (Autorité des Marchés Financiers - AMF) as part of the regulated information disclosure requirements and available on SMCP's website (www.smcp.com).

2

Daniel Lalonde, CEO

#1

€912m 16.8% 1.9x

OUTSTANDING 2017 RESULTS - EXCEEDED GUIDANCE

Guidance Actual



Sales

• c. €900m

Adjusted1 EBITDA margin (%)

16.5%

Net leverage

< 2.25x at IPO

 

(1) Excluding LTIP

€49m

Capex

€50–53m



4

ANOTHER YEAR OF STRONG GROWTH

Sales (€m)

54% 50% 42% 34% 28% 59% % international:

2010 sales are a pro-forma consolidation from the 3 sub-group consolidated accounts of Sandro Andy SA, Maje SAS, and Claudie Pierlot SAS 2010 and 2011 sales in French GAAP Change of accounting method to IFRS from 2012 onward 5

2017 sales growth:

+16.0% reported +17.5% at constant currency

107 130 154 2015 2016 2017

15.8% 16.5% 16.8% Adj.1EBITDA margin

Adjusted1 EBITDA (€m)

(1) Excluding LTIP impact for -€1.9m in FY 2017

CREATING VALUE THROUGH PROFITABLE GROWTH

6

LEVERAGING ALL OUR GROWTH DRIVERS

7

I / PURSUE ORGANIC GROWTH

II / GAIN MARKET SHARE IN FRANCE BUILD ON THE CORE EXPAND ACCESSORIES DEVELOP MEN’S GROW DIGITAL

III / DEVELOP FOOTPRINT IN STRATEGIC MARKETS

France

(1) Includes Mainland China, Hong Kong, Macau and Taiwan (2) Includes UAE, Saudi Arabia, Kuwait and Qatar

Directly operated stores Key partnerships

Greater China1 UK Spain Germany Italy North America South Korea Australia Middle East2

BRAND AWARENESS ACROSS THE WORLD

BUILD ON THE CORE

2017 LFL sales

growth: +7.8%

DESIRABLE ON-TREND RTW COLLECTIONS INNOVATIVE IN-STORE CUSTOMER EXPERIENCE

8

ORIGINAL SOCIAL MEDIA CAMPAIGNS #TRUEPARISIANCHIC

Sales growth: +46%

STORE TO WEB

2017 Digital penetration: 12.1%

E-RESERVATION

Roll-out omni-channel services Drive e-commerce business

Strong CRM, reaching

5 million customers

(+c.30%)

STRONG DIGITAL ACCELERATION DRIVEN BY SUCCESSFUL INITIATIVES

CLIK & COLLECT

9

STRONG SUCCESS OF SANDRO MEN

2017 Sales growth: +17%

STRONG VISIBILITY STRENGTHENING AWARENESS

10 10

URBAN CHIC DESIRABLE COLLECTION

Sandro Taikoo Li Sanlitun, Beijing

ROLLING OUT MEN FOOPRINT

Sandro Paseo de Gracia, Barcelona

PRE-LAUNCH OF SANDRO AND MAJE EYEWEAR COLLECTIONS

STRONG MOMENTUM ON ACCESSORIES

2017 Sales growth: +18%

EXTENSION OF THE “M” BAG “M WALK” SUCCESSFUL LAUNCH OF "ANOUCK" LINE (CP)

11 11

130 130 149 149 73 73 70 70 46 46 33 33 France Greater China North America Spain UK Germany Italy

2017 net openings across the world Significant White Space potential

WHITE SPACE OPPORTUNITIES

2017 Sales International growth: +27%

(+30% at constant FX)

475 475

DEVELOP FOOTPRINT, CAPTURING HUGE GROWTH OPPORTUNITIES

+15

+50 +48

AMERICAS EMEA APAC

• 4

FRANCE

+109 POS in 2017

TOTAL POS: 1,332

# P POS

12 12

KEY OPENINGS IN 2017 IN PRESTIGIOUS LOCATIONS

Claudie Pierlot via Manzoni in Milan, Italy Maje Guangzhou IGC, China Sandro Shenzen MixC World, China Sandro Regent street in London, UK Claudie Pierlot Taikooli in Beijing, China Sandro Yorkdale, Toronto, Canada Maje Champs Elysées in Paris, France 13 13

Philippe Gautier, CFO

#2

EXCELLENT 2017 RESULTS; EXCEEDED GUIDANCE

(1) Adjusted from LTIP impact of -€1.9m in FY 2017 (2) IPO related cash-out : -€15m

/ +17.5% at constant FX / +7.8% LFL growth / POS: 1,332 (+109)

SALES

+16.0% growth

€912.4m

Adj.1 EBITDA

16.8% margin

€153.7m (+18.6%)

FCF

€60.7m

• excl. IPO related costs2

15 15

50% 38% 12%

Sandro Maje Claudie Pierlot France EMEA APAC Americas

41% 30% 17% 12%

Sales by region Sales by brand

(€m)

VERY STRONG GROWTH, WELL-BALANCED ACROSS BRANDS AND REGIONS

786.3 912.4 +12.0 +53.6 +16.5 +44.0 Sales FY 2016 France EMEA Americas APAC Sales FY 2017 +3% +24% +18% +40% +16.0% 786.3 912.4 +80.5 +30.0 +15.6

Sales FY 2016 Sandro Maje Claudie Pierlot Sales FY 2017 +21% +10% +16% +16.0%

(€m)

16 16

€ 129.6m € 153.7m € 20.8m € 3.3m

FY16 EBITDA (Pro forma) Sales Margin FY17 adj. EBITDA

16.5% 16.8%

+18.6%

/

Adj.1 EBITDA stands at €153.7m in 2017, up +18.6% vs. LY

/

Adj.1 EBITDA margin stands at 16.8%, up +0.3pt vs. LY driven by strong retail margin

/

Retail margin is supported by growing share of e-commerce and Asia, our most profitable channel and region

(€m) x % % of sales

Adj.1 EBITDA UP 18.6%, MARGIN REACHING 16.8%

Adj.1 EBITDA Margin bridge

(1) FY 2017 EBITDA adjusted from LTIP impact for -€1.9m (2) Based on management accounts – Management accounts include minor differences compared to audited IFRS accounts; Gross Margin defined as net sales after cost of goods sold before concession fees (3) Retail margin defined as EBITDA before SG&A (selling, general and administrative costs incurred at a central or corporate level and not allocated to point of sales or regional partnered retail) (4) SG&A defined as selling, general and administrative costs incurred at a central or corporate level and not allocated to point of sales or regional partnered retail. SG&A as % of sales calculated based on total net sales as per management accounts (5) Net sales based on consolidated accounts

(% of sales5) 76.9% 37.1% 16.8%

• 39.7%
• 20.3%

Gross margin Store costs Retail margin SG&A

• Adj. EBITDA

margin

(2) 3 4

1 1

17 17

STRONG NET INCOME EXCLUDING ONE-OFF COSTS

Net income excluding one-off costs /

Strong net income excluding one-off costs of €44.9m

/

Net income standing at €6.3m after the impacts of -€38.6m of one-off costs including:

/

• €41.9m of other income and expenses, out of which -€31.6.m related to FPS and -€10.3m IPO related costs

/

• €40.5m financial charges related to the early redemption of bonds for -€20.8m and shareholder loan non-cash interests

for -€19.5m (extinguished at IPO)

/

+€43.8m favourable tax impact due to the deduction of one-off costs as well as non-cash tax gains related to the change in French long term tax rate

€ 6.3m € 44.9m +€ 38.6m

Net income One-off costs Net income

• excl. one-off costs

18 18

€m 2017(2) Adjusted EBITDA(3) 153.7 D&A & LTIP charges (36.9) Operating income before other incomes and expenses 116.8 Other income and expenses (46.7) Operating profit 70.1 Financial result (69.9) Profit before tax from continuing operations 0.2 Income tax expense 6.1 Net income 6.3

(1) Adjusted pro forma condensed consolidated audited accounts to reflect the

acquisition of the Group by Shandong Ruyi as if it had taken place on January 1, 2016

(2) 12-month period ending December 31, 2017 (4) FY 2017 adjusted from LTIP impact for (€1.9m)

€153.7m €60.7m €45.4m

• €44.0m
• €49.0m
• €15.3m

FY17 Adj. EBITDA Change in WC (excl. IPO related costs) Capex FY17 FCF

• excl. IPO related costs

IPO related costs FY17 FCF

SOLID FCF GENERATION

/

Solid free cash flow generation of €60.7m in FY 2017 excluding IPO related costs

/

Strong level of EBITDA at €153.7m

/

Working capital impacted by timing effects

/

Sustained investments with -€49.0m of capex, of which -€28m dedicated to store expansion (57% of total capex)

/

Including IPO related costs for -€15.3m, reported FCF stands at €45.4m

(1) Adjusted from LTIP impact for -€1.9m, non-cash

1

19 19

€397.1m €390.4m €292.0m €54.0m

• €60.7m
• €98.5m

Dec-16 Net debt FCF Taxes & Financial charges Dec-17 Net debt after operational deleveraging IPO & refinancing Dec-17 Net debt

3.1x 1.9x 2.5x

SIGNIFICANT DELEVERAGING

Leverage Organic deleveraging: -0.6x Total deleveraging: -1.2x

1

/ Significant deleveraging to 1.9x coming from both operations and IPO

/

Partial repayments of the High yield bonds up to €271m, thanks to IPO proceeds and the use of the new RCF line

/

High Yield bonds to be refinanced in May 2019

/

Cost of debt will be gradually reduced from c. 6% to 2.5%

(1) Excluding one-offs related to IPO and refinancing

20 20

OUTLOOK

#3

2018 : GROWTH STORY CONTINUES WITH NEW EXCITING PROJECTS

22 22

PRESTIGIOUS NEW OPENINGS ACROSS WORLD DRIVING E-COMMERCE BUSINESS DEVELOPPING OMNI-CHANNEL SERVICES CELEBRATION OF MAJE 20TH ANNIVERSARY CELEBRATION OF SANDRO MEN 10TH ANNIVERSARY

(1) Excluding LTIP impact

2018 GUIDANCE

SALES GROWTH

+11-13%

at constant currency

Adj.1 EBITDA MARGIN

Around 17%

23 23

MID-TERM GUIDANCE: 2020 OBJECTIVES CONFIRMED

((1) Excluding LTIP impact

Based on: / Average of 80-90 DOS openings per year / Capex of c.4.5%-5.0% of net sales

SALES GROWTH

+11-13% per year

at constant currency

Adj.1 EBITDA MARGIN

+100 bps

by 2020 vs. 2016

LEVERAGE

Intend to refinance High Yield notes by 2019

DIVIDEND

To be considered once mid-term capital structure is fully in place

24 24

OUR AMBITION Become global leader in accessible luxury OUR MISSION Spread Parisian chic across the world

25 25

APPENDIX #4

INCOME STATEMENT

27 27

€m 2016

(pro forma (1))

2017(2) Net sales 786.3 912.4 Commissions (105.2) (117.0) Revenue 681.1 795.4 Purchases and changes in inventories (185.7) (210.3) Gross Margin(3) 495.4 585.1 Other operating income and expenses (199.0) (239.9) Personnel costs (166.9) (191.6) Adjusted(4) EBITDA 129.6 153.7 Allocation of LTIP

• (1.9)

EBITDA 129.6 151.8 Depreciation and amortization expense (37.9) (35.0) Operating income before other incomes and expenses 91.7 116.8 Other income and expenses (6.5) (46.7) Operating profit 85.2 70.1 Cost of net financial debt (56.5) (68.1) Financial income and other financial expenses 0.1 (1.8) Financial Result (56.4) (69.9) Profit before tax from continuing operations 28.7 0.2 Income tax expense 25.0 6.1 Net income (Loss) of fully consolidated companies 53.7 6.3 Attributable to owners of the parent 53.7 6.3 Attributable to minority interests

• Net income (group share)

53.7 6.3

(1) Adjusted pro forma condensed consolidated audited accounts to reflect the acquisition of the Group by Shandong

Ruyi as if it had taken place on January 1, 2016, excluding one-off items related to the acquisition and its concomitant refinancing

(2) 12-month period ending December 31, 2017 (3) Gross margin corresponds to sales after deduction of cost of sales and commissions paid to the department stores

and affiliates. The company uses and monitors as an operational KPI the gross margin before commissions and refers to it in this document rather than the gross margin after commission.

(4) FY 2017 adjusted from LTIP impact for (€1.9m)

OTHER INDICATORS

28 28

€m 2016(1)

(pro forma)

2017(1) Gross margin(2) 602.5 701.4 % of sales 76.6% 76.9% Direct costs of points of sales (314.9) (362.4) Retail margin 287.6 338.9 % of sales 36.6% 37.1% SG&A (158.0) (185.2) Adjusted(3) EBITDA 129.6 153.7 % of sales 16.5% 16.8%

(1) Based on management accounts (3) Adjusted from LTIP impact for -€1.9m in FY 2017 (2) As followed in the management accounts, gross margin corresponds to sales after deduction of

cost of sales and before deduction of commissions paid to the department stores and affiliates.

• Adj. EBITDA BY BRAND

29 29

€m 2016

(pro forma (1)

2017(2) Adjusted(3) EBITDA 129.6 153.7 Sandro 59.7 78.9 Maje 58.0 60.9 Claudie Pierlot 11.9 13.8 Adjusted(3) EBITDA margin 16.5% 16.8% Sandro 15.9% 17.3% Maje 18.5% 17.8% Claudie Pierlot 12.2% 12.2%

(2) 12-month period ended December 31, 2017 (3) FY 2017 adjusted from LTIP impact for (€1.9m) (1) Adjusted pro forma condensed consolidated audited accounts to reflect the acquisition of the Group

by Shandong Ruyi as if it had taken place on January 1, 2016, excluding one-off items related to the acquisition and its concomitant refinancing

CASH-FLOW

30 30

€m 2017(1) Adjusted(2) EBITDA 153.7 Changes in working capital

• 59.3

Income tax expense

• 13.1

Net cash flow from Operating activities 81.2 Capital expenditure

• 49.0

Others 0.0 Net cash flow from Investing activities

• 48.9

Net interests paid

• 37.3

Other financial income and expenses

• 1.0

Capital increases/decreases 127.0 Purchase and proceeds from disposal of treasury shares

• 0.7

Issuance and repayment of borrowings

• 138.3

Exchange rate and change accounting principles

• 1.7

Net cash flow from financing activities

• 52.1

Change in net cash

• 19.8

Net cash at beginning of period 56.1 Net cash / (net debt) at end of period 36.3 Change in net debt

• 105.2

Net debt at beginning of period 397.1 Net debt at end of period 292.0

(1) 12-month period ended December 31, 2017. Pro forma figures in 2016 are used to estimate the Company’s

income statement assuming that the acquisition of the Group by Shandong Ruyi took place on January 1, 2016. This estimate is in principle not applicable to the cash-flow statement.

(2) FY 2017 adjusted from LTIP impact for (€1.9m), non-cash

BALANCE SHEET

Equity and liabilities Assets

€m 2016(1) 2017 Share capital 58.2 81.9 Share premium 523.5 951.6 Reserves and retained earnings

• 0.0

17.0 Comprehensive income (total) 31.9 33.1 Treasury shares

• 0.7

Total Equity - Group share 613.5 1,082.9 Non controlling interest 0.0

• Total Equity

613.5 1,082.9 Bond loans 448.1 192.3 Non-current loan 300.0

• Other financial liabilities

5.5 0.0 Provisions and other non current liabilities 0.4 0.3 Deferred revenue 0.2 0.1 Net employee defined benefit liabilities 2.4 3.2 Other liabilities 0.1 0.0 Deferred tax liabilities 196.9 183.7 Non-current liabilities 953.7 379.7 Interest-bearing loans and borrowings 5.1 2.4 Trade and other payables 100.9 102.9 Bank overdrafts and short-term financial liability 1.2 137.7 Short-term provisions 3.5 2.8 Other liabilities 80.6 113.9 Current liabilities 191.2 359.6 Total Liabilities 1,758.3 1,822.2

31 31

€m 2016(1) 2017 Goodwill 630.1 630.1 Intangible assets 720.0 728.8 Property, plant and equipment 65.1 67.8 Non-current financial assets 15.1 16.1 Other non-current assets 1.3 1.0 Deferred tax assets 54.8 56.2 Non-current assets 1,486.3 1,499.9 Inventories and work in progress 147.1 179.4 Accounts receivables 40.7 52.7 Other receivables 26.9 49.7 Other current financial assets

• 0.0

Cash and cash equivalents 57.3 40.4 Current assets 272.0 322.2 Total Assets 1,758.3 1,822.2

(1) Interim consolidated financial statement ended December 31, 2016

OPERATIONAL WORKING CAPITAL

32 32

€m 2016(1) 2017 Inventories and work in progress 147.1 179.4 Trade receivables 40.7 52.7 Trade payables

• 99.8
• 92.7

Operational working capital 88.0 139.3 As a % of LTM sales 11.2% 15.3%

(1) Interim consolidated financial statement ended December 31, 2016

DELEVERAGING: 2016-2017

Repayment of 10% for €37.1m

April il 2017 Oct ctob

• ber

er 2017 7 (at at IPO)

Equity claw (30% of €371m) + repayment of 10% of €222.6m for €133.6m

Senior ior Secured ured Note Flo loati ating ng Rate e Note Revolving ving Credi dit Facili ility

Repayment of 100% for €100m Replacement of old RCF by new RCF of €250m o/w €137m drawn

€200. 0.3m 3m €0m 0m €135m 5m €333.9m €200.3m €0m December ember 2017 €0m May y 2016 2016 €371m €100m €137m Oct ctob

• ber

er 2016

5.875% E + 6% E + 2.5%

€0m

Undrawn RCF (€70m)

Issuance Issuance Debt on balance sheet

33 33

BREAKDOWN OF POS

Directly operated stores Total points of sales

34 34

Number of DOS 2015 2016 2017 Var 2016 Var 2017 By region France 464 479 475 +15

• 4

EMEA 252 294 327 +42 +33 Americas 128 132 135 +4 +3 APAC 62 93 133 +31 +40

• By brand

Sandro 405 436 466 +31 +30 Maje 319 344 367 +25 +23 Claudie Pierlot 144 168 191 +24 +23 Suite 341 38 50 46 +12

• 4
• Total DOS

906 998 1,070 +92 +72 Number of POS 2015 2016 2017 Var 2016 Var 2017 By region France 464 479 475 +15

• 4

EMEA 341 383 431 +42 +48 Americas 134 140 155 +6 +15 APAC 179 221 271 +42 +50 By brand Sandro 503 540 593 +37 +53 Maje 414 445 484 +31 +39 Claudie Pierlot 163 188 209 +25 +21 Suite 341 38 50 46 +12

• 4

Total POS 1,118 1,223 1,332 +105 +109

• /w Partners POS

212 225 262 +13 +37

SHAREHOLDING STRUCTURE, UPCOMING EVENTS

(1) Post FPS conversion into ordinary shares and excluding LTIP program impact (2) Founders holding 6% and Managers 5% (3) Indirect shareholding through European TopSoho SARL (4) Excluding FPS and LTIP program impact

Shareholding post FPS conversion as of March 21st(1) Upcoming event /

Q1 2018 sales on April, 26th, 2018

Number of shares Contacts

73,170,023 ordinary shares as of March 21st(4) 78,246,937 ordinary shares post FPS conversion(1) Website: www.smcp.com/finance Investor Relations:

/ celia.deverlange@smcp.com / pauline.roubin@smcp.com

Media: smcp@brunswickgroup.com

(2) (3)

35 35

DEFINITIONS OF NON-IFRS FINANCIAL MEASURES

/

“Net sales” consists of total sales (retail and wholesale sales) net of rebates, discounts, VAT and other sales taxes, but before the deduction of concession fees paid to department stores and commissions paid to affiliates.

/

“Sales growth at constant currency” corresponds to total sales in a given period compared with the same period in the previous year, expressed as a percentage change between the two periods, and presented at constant exchange rates (sales for period N and period N-1 in foreign currencies are converted at the average year N-1 rate).

/

“Like-for-like sales growth” corresponds to retail sales from directly operated points of sale on a like-for-like basis in a given period compared with the same period in the previous year, expressed as a percentage change between the two periods. Like-for-like points of sale for a given period include all of the Group’s points of sale that were open at the beginning of the previous period and exclude points of sale closed during the period, including points of sale closed for renovation for more than one month, as well as points of sale that changed their activity (for example, Sandro points of sale changing from Sandro Femme to Sandro Homme or to a mixed Sandro Femme and Sandro Homme store). Like-for-like sales growth percentage is presented at constant exchange rates (sales for year N and year N-1 in foreign currencies are converted at the average N-1 rate, as presented in the annexes to the Group's consolidated financial statements as at December 31 for the year N in question).

/

“Adjusted EBITDA” is defined by the Group as operating income before depreciation, amortization, provisions and charges related to share-based long-term incentive plans (LTIP). Consequently, Adjusted EBITDA corresponds to EBITDA before charges related to LTIP. These charges were nil in 2016 and amounted to €1.9 million in 2017. Adjusted EBITDA is not a standardized accounting measure that meets a single generally accepted definition. It must not be considered as a substitute for operating income, net income, cash flow from operating activities, or as a measure of liquidity.

/

“Adjusted EBITDA margin” corresponds to Adjusted EBITDA divided by net sales.

/

“Gross margin” as reported in the financial statements corresponds to the net sales after deduction of cost of sales and commissions paid to the department stores and

• affiliates. The company uses and monitors as an operational KPI the gross margin before commissions and refers to it in its management presentations rather than the gross

margin after commission.

/

“Retail margin” corresponds to the gross margin before taking into account the points of sale’s direct expenses such as rent, personnel costs, commissions paid to the department stores and other operating costs.

/

“Selling, general and administrative expenses” are those incurred at the corporate level/central costs and not allocated to a point of sale or partner. These elements are added to the retail margin to obtain EBITDA.

36 36