The Cafom Group, driven by its internet sales in 2023

The Cafom group, driven by its Internet sales in 2023

The Cafom group, a major player in home furnishings in Europe and overseas (Nature & Découvertes, Vente-Unique, First Deco), reveals an annual turnover increase in 2023, despite an increase in its expenses. After the sale of Habitat, the sales momentum is driven by its e-commerce division.

In a difficult environment marked by inflationary pressures and household purchasing power constraints, the turnover of the Cafom group increased by +2.5% in 2023. This growth reflects the strong resistance in overseas territories (-0.7%), thanks to the diversity of the offering (7 brands), broad geographic coverage (6 territories), as well as the significant growth in the activity of the e-Commerce division in continental Europe (+7.8%), driven by the increasing digitization of the sector and the successful launch of the marketplace by Vente-unique.com. The margin rate stands at 49.4%, slightly lower than last year (-0.25 points), mainly due to the decrease in the rate of the Overseas division, in territories where the Group chose not to pass on the full impact of inflationary pressures. The gross margin thus amounts to 201.5 million euros, an increase of 3.9 million euros compared to 2021/2022.

Increase in expenses, decrease in net result

At the same time, expenses increased by 3.3 million euros (+2.1%). The increase mainly comes from the e-Commerce division in continental Europe (+3.0 million euros), which strengthened its marketing expenses and workforce. The adjusted EBITDA for the 2022/2023 fiscal year is thus 48.3 million euros, an increase of 0.7 million euros compared to last year. The adjusted EBITDA excluding the application of IFRS 16 amounts to 28.4 million euros, compared to 28.7 million euros for the previous fiscal year, and the current operating result amounts to 19.9 million euros (20.1 million euros a year earlier). Non-recurring charges amount to 4.6 million euros, compared to a profit of 1.1 million euros last year, and mainly consist of a provision of 4 million euros on the book value of the Habitat brand, given the deterioration of this brand following the liquidation of its operator (see below). Taking into account a profit of 2.1 million euros from equity-accounted investees, a financial result of -3.7 million euros (compared to -4 million euros last year), and a favorable evolution of the amount of deferred taxes reducing the overall tax burden, the net result amounts to 12.5 million euros, identical to that of last year. The net result attributable to the group amounts to 9.4 million euros (compared to 10.7 million euros last year).

Overseas store network

During the fiscal year, Cafom opened 1 new store in French Guiana, under the Nature & Découvertes brand, and changed the brand in Reunion, with the But store becoming a First Deco store. As of September 30, 2023, the group operates 35 stores in its Overseas division, with an annual turnover of 245.7 million euros, down 0.7% (-1.3% with constant number of stores). Due to the primary effect of price increases not passed on to preserve consumer purchasing power, the EBITDA of the division amounts to 32.3 million euros, compared to 36.2 million euros in 2022. Before application of IFRS 16, the EBITDA of the Overseas division amounts to 16.6 million euros, compared to 21.1 million euros last year. After taking into account depreciation and provision expenses, the current operating result of the Overseas division is 9.4 million euros, compared to 14.6 million euros as of September 30, 2022. The operating result and net result take into account the impairment of the value of the Habitat brand. The group remains confident in the overall quality of its store network in the Overseas division but remains vigilant in the face of persistent inflationary pressures and constraints on consumer purchasing power.

E-commerce division dynamics

Driven throughout the fiscal year by strong commercial momentum and its best fourth quarter in history, the e-Commerce division in continental Europe achieved a consolidated turnover of 161.9 million euros, an increase of 7.8% over the year. The adjusted EBITDA of the division amounts to 16.0 million euros, compared to 11.5 million euros a year earlier. Optimization of delivery and logistics expenses has allowed for controlled strengthening of marketing intensity and investment in talent and structure to prepare for future growth. Before application of IFRS 16, the adjusted EBITDA amounts to 11.8 million euros, compared to 7.6 million euros in 2022. After taking into account depreciation and provision expenses, the current operating result of the e-Commerce division amounts to 10.6 million euros, compared to 5.5 million euros in 2022. Vente-unique.com expresses confidence in the strength of its business model and development strategies. The growing success of the marketplace and the continuation of its European expansion (scheduled openings in the Netherlands and Portugal in the first half of 2024) should support commercial dynamics in the coming fiscal years.

Update on the situation of Habitat

The Cafom group recalls that it granted the license for the Habitat brand to the company HDI as part of the sale of the entire share capital of Habitat Design International (HDI) on October 6, 2020, to Terence Capital, a company owned by Mr. Thierry Le Guénic. HDI was liquidated on December 28, 2023. In addition to providing the exclusive operating license to HDI, the group also, through its subsidiary Vente-unique.com, provided logistics services on behalf of HDI. In the last fiscal year ending on September 30, 2023, the Group billed 6.9 million euros to HDI for these services, 3, that is, 1.7% of Cafom’s consolidated turnover. This activity generated an operating result of 0.6 million euros (before taking into account recurring costs for brand protection of 0.1 million euros).

The group will absorb the loss of logistics activity carried out for HDI by acquiring new clients for its logistics business and for its own needs related to the growth of the e-Commerce division in continental Europe. Cafom has decided to terminate the brand license due to growing dissatisfaction of customers with HDI, as reported in the press, particularly regarding delivery defects of the ordered goods. As indicated, the group has decided to impair the value of this brand by 4 million euros. There has been no other impairment as a result of the liquidation of HDI recorded in the consolidated accounts as of September 30, 2023, since other net receivables are estimated to be covered by the group, thanks to the exercise of its post-closure guarantees. In this context, the Cafom group is exploring the best options to restore the image of the Habitat brand and continues to operate 5 stores under the Habitat brand in the Overseas division.

C.Bu

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