ECULLY, France – In the first quarter of 2023, Groupe SEB generated sales of €1,822m, down 3.7% LFL (and -4.9% on a reported basis). This performance, which was delivered in a difficult market environment, confirms the sound resilience of the Group. With sales reaching a low point in the third quarter of 2022 (-8.1% LFL) and on the back of a fourth-quarter demonstrating sequential improvement (-5.6% LFL), the first quarter of 2023 was characterized by a further -and significant- easing of the contraction in business activity which again (and for the last time) must be analyzed on the basis of high comparatives.
In the first quarter of 2022, the Group had achieved record turnover of €1,915m.
The 4.9% decrease in Group turnover includes a 3.7% organic decline, a currency effect of -1.4% and a scope effect of +0.3% (related to the acquisition of Zummo in July 2022).
The Group had anticipated this performance which in no way affects its ambition for the full year 2023.
The Consumer business posted sales of €1,613m, down 6.6% LFL (-8.4% on a reported basis). The latter should be seen in the light of a demanding comparison basis for 2021-2022, driven by a phenomenon of oversales of Small Domestic Equipment.
Consistent with 2022, the Consumer business was penalized in several of the Group’s key markets including France, Germany and the United States. As expected, for the first quarter of 2023, China reported a slight decline in revenue as a result of particularly high comparatives. In the context of a Small Domestic Equipment industry that has not yet benefited from the reopening of the Chinese economy, Supor still continues to outperform the market.
The company’s flagship product categories for the first quarter were: the Ingenio pots and pans range; oil-less fryers; linen care (irons and garment steamers); steam cookers; and kettles.
Professional sales totaled €209m in the first quarter, for an increase of 29% LFL (+34% on a reported basis). This performance confirms the continued recovery in this business, which started mid-2021. A performance all the more rewarding since it was propelled by the Group’s operating regions across the board – namely China, North America and Europe – as well as new machine sales contracts and maintenance and repair services.
In line with 2022 performances, the Professional business (Coffee at ~90%) made an excellent start to 2023 by posting growth of nearly 30% LFL.
For all regions, growth was in the double digits. While China was the top-performer – thanks not least to the continued roll-out of the contract with Luckin Coffee – Germany, the United States and United Kingdom all set their best sales records.
Regions aside, this vigorous growth momentum is at once propelled by machine sales and the continued development of associated services and maintenance. As regards machines, sales growth is well-balanced between core business growth – with an increasingly large customer portfolio – and major contracts.
The new product pipeline is strong, receiving in particular positive feedback from customers at the Internorga trade show which took place this March in Hamburg.
The first quarter was also characterized by the acquisition of La San Marco. Recognized as the leader in the espresso machine with traditional lever system segment, this iconic Italian manufacturer will enrich the Group’s existing product offering.
Hotel equipment also delivered an outstanding first-quarter performance.
Debt at March 31, 2023
At March 31, 2023, the Group’s net financial debt amounted to €1,864m (of which €358m in IFRS 16 debt), compared with €1,850m at March 31, 2022 (with IFRS 16 debt of €339m).
Net financial debt decreased by €109m from the level reported at end-December 2022.
This decline mainly derives from the strong generation of free cash flow in the first quarter, in excess of €200m mainly due to the continued reduction in inventories.
The Group’s net financial debt as of March 31 also includes the acquisition of La San Marco.
Groupe Seb: Outlook
Despite the current uncertainties, Groupe SEB remains confident in the future and optimistic about the structural growth prospects for the Small Domestic Equipment and professional coffee markets worldwide.
For the year 2023, the Group is reiterating the targets announced as part of its 2022 full-year results publication. The Group anticipates a progressive recovery in its Consumer sales, a strong growth in its Professional revenue and an increase in its full-year ORFA margin.