SEB SA (SK) Earnings Call Transcript

Hello, ladies and gentlemen, and welcome to this presentation of our 2020 full year results for the SEB Group. As usual, I'm going to make this presentation with Stanislas De Gramont and Nathalie Lomon, who is the DG in charge of finance. Today, we are going to talk about our accounts for 2020. After a brief introduction, we'll be talking about the figures themselves and our businesses, particularly in terms of sales worldwide, and then we'll be talking about the projects that we have been running for the last year with Stanislas. And a few words of conclusion before we take your questions. And I hope that there will be many questions. Let's start right away with 2020, which obviously was a very particular year. The key word being COVID. COVID-19, this health crisis, economic crisis without precedent, which has had, of course, major impacts on health throughout the world, but also impact on distribution with a major change in -- to online distribution and also in terms of consumption, consumption that held up on our market for small domestic appliances and for appliances and cookware, particularly because like in all crisis, the group is very resilient because we sell products that are intended for people who are at home. And so we saw this year that there was a strong acceleration in the sale of products for -- to make things at home or to take care of one's home and also for personal care. However, beside the good market for FDA, we saw a professional market that was a lot more complicated, extremely impacted by the drop in activity in the hotels, restaurants and cafés, what we call HoReCa. And since the beginning of the crisis, this sector has suffered tremendously, and we're seeing a slow exit of the crisis to the end -- towards the end of 2021. Beyond COVID, what we can talk about is the currency and commodity environment. The currency environment is very volatile, and it's having a strong impact on our turnover, but also on our operating income. Now for commodities or raw materials, the situation is quite favorable for 2020. If we now look at what occurred for the group, firstly, what we can say is that our teams were mobilized and worked very hard. We responded around the world. The crisis started in Asia at the beginning of the year in China and then continued to the rest of Asia, Europe, the Americas, and we saw little by little, all countries being impacted, and our teams had to respond in a very strong manner. Our first priority, of course, in 2020 was the health of our employees and the safety of all of our employees, where there were general health measures that were implemented, social distancing in factories for all of the people working in the factories, all of the personal protection equipment and then remote working, whenever that was possible. So our employees had to learn to work in a new way. And there were also initiatives focusing on solidarity, so that initiatives that were taken in all of the companies in the group across the world to give product to hospitals. And in France, what we did was to develop respirators to try to save human lives. And everyone in the group really worked hard to not only get through the crisis, but also to help people who are strongly impacted by COVID-19. In parallel to that, our priority was to ensure business continuity with operational flexibility and you -- all of our factories were impacted at one-time or another during the crisis. All of the sites, the tertiary sites were also impacted. I think the only sites that stayed open were our logistics sites, and we managed with specific measures, of course, to protect our employees to ensure delivery to customers. So operational flexibility, flexibility in our tertiary services, and those were really the key words for 2020. And our sales did not go through traditional sales channels, but mostly through e-commerce, which really helped our results. Third point, in a year that's been so difficult -- let me remind you that the first quarter, even in the first half of the year, we lost a large portion of our turnover. So it was our duty to ensure that we could ensure the sustainability of the group, particularly through its financing. And we held our course and we issued a new bond -- new bonds in the second part of the year, which allowed us to have peace of mind and to ensure a healthy financial situation for the company. And we also paid a lot of attention to credit risk management. We have some customers in certain emerging countries, for instance, who had a lot of difficulties, and we were very vigilant on the customer credit risk. And I think we succeeded because we didn't have a lot of outstanding receivables at the end of the year. We also -- third point, focused on debt reduction. This is always a priority for the group to keep the group's financial situation healthy. Our debt reduction was substantial this year, over EUR 450 million in debt reduction in such a difficult year, this represents a great performance. And life, of course, did not stop. We didn't only manage short term, we continued to invest time, money in our products that will be the future of the group. We are always obsessed by the long term. So we put it in English. It's the only expression that we could find digital first. We talked about the appearance and then the development and then the growth of digital. And now it's the opposite, the world is digital. And the rest isn't digital, but the world is digital. And we're going -- we're accelerating in this sector, and you'll see that we've made a lot of progress. Second point, acquisitions. This won't surprise you. Interest taken in start-ups, alliances, innovative and new technologies and also through new sales practices. 2020 was very interesting from that point of view, and I'll give you a few examples later. Sustainable approach, that's not new, but we're continuing with this battle. CSR is an integral part of our business, of our life. And of course, in a year of COVID, we could not drop this battle. What's really a strong point for the group is our product innovation. And we've had some innovations that went very well this year and others that will allow us to continue our progress in 2021. For this and before we continue with the presentation, I would really like to express my warm and sincere thanks to all of our employees. Throughout the world 35,000 employees who were all impacted by COVID, but who all managed to continue working in sometimes very difficult conditions. Wearing masks in a plant is not something that's easy to do, but everyone wanted to continue. It started early. On the photos, you can see. I won't read it in Chinese, but I was sending a message to our Chinese teams in January to say, we're thinking of you, we're with you. And then the whole world went through the crisis. And today, I believe that we succeeded in managing our business in 2020, and thanks to our teams, and I would really -- I thank them. Like often at the time of crisis, we've shown that we have a resilient business that was supported by consumer business. Some figures, our sales of EUR 6.94 billion. But we're down 3.8% on a like-for-like basis, so better than the published. This can be broken down into 2 sectors: professional, EUR 575 million. You can see strongly hit by the crisis, minus 28%, and minus 30.7% on a like-for-like basis. So you can see almost a full stop to the activity, minus 31%. That's due to hotels, restaurants and café business. However, on the consumer side, which is bigger, EUR 6.4 billion. if -- it's down 2.9%. But if we look on a like-for-like basis, it was only down by 0.5%, which is really a great performance in this period. And other key figures, I'm going to go straight to our operational results from activity at EUR 605 million, down 18.2%. It was EUR 740 million last year. At -- so it's only down 4.8% on a like-for-like basis. So the -- so we should have been above EUR 700 million. So net profit EUR 301 million, and our net debt is down EUR 1.518 billion, which is a very extremely reasonable level. With all of this news and to take into account the huge efforts that were agreed by all of our shareholders last year, let me remind you that in February 2020, we proposed to the general assembly to increase the dividend by 7% and we decided in the end to bring it down by 33% to EUR 1.43 to take into account the recommendations of the fed. So that was a very low payment for dividend, given the great performance that we had in 2019, which was an absolute record level. So in front of the situation and the good results that we had for 2020 and the confidence that we have in the future, decided at the Annual General meeting 2 days ago, to propose a dividend of EUR 2.14, which is at the same level paid in 2019 and to attribute to our shareholders 1 free share for every 10 held to thank them for their loyalty to us during the crisis. So that's my introduction, and I'm now going to hand the floor to Nathalie and Stanislas, who are going to talk to you about our accounts. Nathalie?

I'm going to begin the presentation by reminding you of the change in the sales between 2019 and 2020. The sales for 2020, as we said in January last year was EUR 6.94 billion, down by 3.8% and our -- with organic growth penalized by currency effect that I'll come back to in a few moments. And that benefits from a scope -- a positive scope effect of plus EUR 81 million, which is 1.2% of the turnover. This scope effect is essentially due to the StoreBound that we bought in July of last year and also complements from Wilbur Curtis from last year. For the currency effect, penalizing our sales in 2020, minus EUR 219 million. On the graph on the bottom left, you see that the trend that we announced in the third quarter with a negative impact of EUR 90 million was accelerated in the fourth quarter, which is now at minus EUR 109 million. This devaluation of currency against the euro is essentially located in emerging countries: Brazil, Russia, China, Turkey, also Latin American countries, Mexico, Colombia, Argentina, and I also see in the middle of this chart in Ukraine in Eastern Europe with their currency that's really been devalued against the euro. On this part that we also presented in January of last year, we focus on sales have turned over for the year. And in this year, we have a revenue recognition that's slightly different from previous years, 42% of turnover in the first half of the year, 58% in the second half against 45%, 55% in normal years. The first half of the year was extremely impacted by the crisis, and for consumer and professional businesses at the beginning of the quarter in Asia, and then it moved to Europe and North America. And then in the second half of the year, we saw a big turnaround in the consumer activity, growth of 7.8% in the second half. Professional, the business was in a very difficult situation compared with the previous year, down by 33.8%, and all of this led to the full year with the consumer activity just slightly down compared to last year, minus 0.5%, whilst professional activity generated a 30.7% less revenue than in 2019. And now I'm going to hand the floor to Stanislas, who will talk about the consumer activity.

So if we look at consumer sales, we see 0.5% overall. We see growth, 7.8% growth in H2. This means that we have a negative first half and some growth in second half, which we find in all 3 -- in all areas. We went from minus 33% to 8.5% in America, minus 9% to plus 9% in Europe, and Asia minus 11.65% to 6%. If you look in Western Europe now, we see that we're pretty flat with 1.5% overall, with minus 11% in the first half and plus 5% in the second half with all countries at the same pattern. And the only countries which had lower performance rates were those that had already loyalty problems the previous year. The other thing in Europe is that all categories of products are contributing to our improvement in the second half. And both for home care and cookware and our electrical equipment and -- will have an impact of this in all areas. A few of the other EMEAs, we have organic growth of 9.6%, which confirms a trend which began several years ago, which has been driven by Russia, Ukraine, Poland, Central Europe and Southern Central Europe. There's a fantastic rise in sales in the second half because we go for 13.4% to 18.6% in the second half. And this despite some currency -- negative currency effects with some improvement through increased prices. The ruble and the Turkish pound impacted on our sales. We have a dynamic here that is lifted by our direct-to-consumer activities and excellent performance of versatile and robo vacuum cleaners with an increase of 20% in comparison to 2019 in terms of like-for-like. If we go to the Americas now, there's an organic growth of minus 0.3%, with minus 7% in North America and 3.7% increase in H2. This is mainly for cookware, which has driven us Tefal, All-Clad and IMUSA. So once again, we have an acceleration of e-commerce, where there is less physical retailing because the department stores in all 3 North American countries were closed. And the other point in North America, the integration of StoreBound, which was -- but at the end of July last year, with annual sales of more than USD 120 million. In the south, at the middle of the year, we began to worry because we had a first half of minus 23.7% in sales and the second part of the year allowed us to increase our sales by 17.8%, a remarkable result, which means we end up pretty even on the year. Once again, good performance for e-commerce, a good season for fans, which is a significant part of our activities in places like Colombia and Brazil. And in cookware, the nonoil fryers has become an important category in that region. And the last point that Nathalie mentioned, weakening of our currencies, Chile, Argentina and Brazil. And I think there's been a lot of comment on that. So if we go to China, it's more comfortable. We had 1 -- minus 0.61% in organic growth at EUR 1.626 billion. First half with the lockdowns in China, minus 14%. And the closing of the Wuhan plant for over 2 months. And in the second half, there was an increase of 3.5% compared to the previous year in LFL. And so with the development of e-commerce, with 62% of the market and less physical sales. This was true everywhere, and so in China as well. In particular, since the Chinese market was ahead, sales were penalized in our closing of the Wuhan plant, which is our cookware main office -- main plant. And for electrical appliances, we had some decline. The rest of Asia was very positive with organic growth of over 5%. The first half, it was pretty well stable and then plus 10% in the second half. All the countries in the area performed well with a couple of smaller exceptions, especially the big countries, Japan, where sales driven by electric cooking and cookware and the development of pressure cookers, electrical pressure cookers. And in South Korea, where we had a weak growth in 2018 and '19. We had an extended offering and product growth because of greater offering. When we look at the different product lines, the fact that people stayed home meant that cooking utensils, electrical cooking, food preparation are -- and cookware -- electrical cookware, proper cookware isn't that far back even if the fact that we closed Wuhan, and this had a great deal of impact. And this slightly lowered our performance in this category. When it comes to LKA, large kitchen appliances, this was very much impacted by the COVID crisis and really a great deal of slowdown in equipment, and that's something that impacted. And also linen care was negative. And yet, we are still happy by the performance of cooking materials, especially when people stay at home most. They iron their clothes less. So that's why there's a trade-off, but I think we managed quite well in that market. And even if we are working, Thierry will talk about that on alternatives to ironing, would seem to have a future for this product, but a different -- a difficult year for linen care. We have the same slide for the second half, and you can see 2 things. First, the trends are about the same as in the first half. But however, all the categories are positive, except for linen care, where once again, we have really positive growth in food preparation. And you see that home care, which was stable throughout the year, has a 2-digit figure growth in the second part of the year, and we're going into 2021 with a very good momentum with culinary articles, also benefiting from our increase in business. Now it's a very different image in the professional sector because between the first half and the second half, the trend is quite constant, minus 27.6% in the first half, 33.8% negative in the second. Confinement began mainly in the second quarter, and this minus 30%, 35% has remained constant. So there's a decrease because of the closure of cafés, restaurants, tourism and sectors that are affected by the health situation. And of course, when customers are closing to buy coffee machines, an impact on service. Even there is good penetration in countries like Germany, where we have a good service figure, and let's not forget as well that professional coffee in 2018 and 2019 had high growth with big contracts in Dunkin' Donuts, [ Folgers kit ]. And this comparison is -- exaggerates the results, the negative results in 2020. Nathalie, you can take the floor back again.

Thank you, Stanislas. So the operating result for the group is that -- is down by 8.7% at EUR 6.94 million, and the operating margin, as I said, at 8.7%. I'll move on to the next slide, which allows us to explain the evolution of the operating income between 2019 and 2020, with a volume effect that's very significant, minus EUR 126 million, that's essentially due to the professional sector. The effect of the negative volumes was offset by a price mix that was positive, including, in particular, all of the price increases and the larger mix that was observed this year, and that really counterbalances the negative impact of currency. The cost of goods sold is plus 9% this year. It's a combination of underuse of our operational sites. You know that our factories were closed for quite a big part of the first half of the year, as Thierry de La d'Artaise reminded us, and this was partially offset by the setting up of a short time working and also actions to reduce our purchasing. And this led to a positive net of EUR 9 million cost of goods sold. Growth drivers. I'll come back to that. Administrative and commercial expenses are down EUR 23 million, and this is the result of efforts that we made to reduce our external expenditures and our travel costs. The impact of currency on ORfA is important, minus EUR 109 million. But this was offset partially by actions on the price, the mix and reduction in expenditures in terms of purchasing. And then the last point, the scope effect from acquisitions that were made during last year and this year. Before we talk about growth drivers, I'd like to underscore the fact that the group in the second half achieved EUR 502 million in terms of ORfA. In the last year, it was EUR 510 million. Bear in mind that these EUR 502 million were achieved with an important drop in the contribution of professional sector on one hand and also a very negative impact from currency in the second half of the year that represents almost EUR 85 million. So now if we talk about growth drivers, as I indicated, they're almost stable from 1 year to the next. We explained in the presentation of our half year results, that we reduced our growth drivers, our advertising and marketing budget because the distribution capacity was down in the first quarter and second quarter with the lockdown and also less footfall in the shops. And we also indicated that during this the half year and the third quarter results that we were going to increase these growth drivers if the market was there, and that's what happened. We saw a big acceleration in the expenditures this year, thanks to bad November, December, particularly focused on advertising and marketing. Our operating profit, EUR 503 million in 2020, and that includes EUR 24 million statutory and discretionary employment profit sharing, which are down compared to 2019, and that leads -- that's due to a drop in our industrial business levels. The other operating income and expenses at EUR 78 million. That's a charge compared with EUR 82 million last year. It's a continuation of our restructuring efforts on our consumer business for WMF and also a restructuring plan that we started for the professional activity and the aim is to reduce the structure of this activity that you were able to observe is -- has a level of profit and sales that is much below what it was in 2019, from EUR 503 million in operating profit to the net profit. So the financial result is virtually stable compared with last year. The EUR 60 million are mostly made up of refinancing costs for the group. The tax level is down. We went from 23.5% to 21.2% this year. This drop has a favorable effect linked to the tax in the countries that were set up and also some events that are nonrecurring one-off that allow us this year to have an effective tax rate of 29.2%. The noncontrolling interests are stable with a small drop in favor of the super minority shareholders and an increase for StoreBound. Now if we look at the simplified balance sheet, there are 2 indicators that I'm going to come back to very quickly. You can see that our working capital requirements decreased. And this had a strong impact on our net financial debt. That's down by EUR 479 million. There are no other really strong elements to comment on. And this leads me to the comments on our working capital requirements. Last year, this represented 16.2% of our sales. And at the end of 2020, it only represents 12.1% of sales and this -- 12.2%. And this substantial decrease is due to some specific effects and also to seasonality effects. The main event that explains the decrease in working capital requirement is the change in business model with a retailer in China that made it possible for us to accelerate the collection of our customer receivables, and that impact will be sustainable in our working capital requirements. Then we also had favorable seasonality effects with the high level of recovery of receivables at the end of the year in 2020 compared with 2019 and also a significant increase in customer financing that comes from a growth in the -- growth -- an increase in growth drivers. So we have these expenses that we made in November, December that increased the customer financing. And there is also the rebuilding of our stock that was achieved at the end of the year. And the last element is a favorable currency effect. This time, when we convert the currency to euros, it brings down our working capital requirements by EUR 67 million. This year, we've changed our presentation on the debt variation going through an intermediate slide that makes it possible to go from the ORfA to free cash flow, with adjusted EBITDA. So we look at the noncash elements on the operating results, and we look at amortization, statutory and discretionary employment profit sharing. So adjusted EBITDA is EUR 851 million. Then we add the change in working capital requirements, plus EUR 299 million. And the gap on the table that I commented on earlier comes from the ForEx effect. So we're talking about a cash variation at an average level, which brings EUR 300 million into the company. We also have investments, the capital expenditures and IFRS, which represent investments of EUR 274 million. We paid our taxes and interest at EUR 194 million. And there's a residual variation in operating working capital -- non-operating WCR, which is plus EUR 69 million. So we generated free cash flow of EUR 752 million this year. Net debt last year was EUR 2 billion. It's down by EUR 752 million, which corresponds to the generated free cash flow. We also used a part of this cash flow to finance acquisitions and the buying back of shares at Supor, this represents EUR 189 million. We paid dividends to our shareholders in the subgroup. And you see the dividends paid to the Supor minority shareholders. And then the last impact is the residual currency effect of minus EUR 17 million. So net debt is set at EUR 1.518 billion at the end of 2020 compared with EUR 2 billion at the end of 2019. As we -- as Thierry said at the beginning of the meeting and throughout the year in the presentations that we've made to you, the group has a healthy and well-balanced financing structure with very diversified instruments. We have bonds that were emitted this year and others that were emitted in the previous years, Schuldschein, ORNAE. We also have MCP at about EUR 900 million, which are short-term financing. So this is -- with the date at 2021 and that contributes to our cash. We also have the confirmed credit lines that have not been used, EUR 1.3 million. So this allows us -- this brings us to the last slide of the financial presentation. So the driver of the group, 1.6x at the end of 2020, the financial ratio, despite the crisis and despite the very strange situation this year, the decrease in debt this year made it possible to continue to leverage the group. We leveraged 0.3x, which is a great financial performance, and I hope that you'll recognize that.

Thank you, Nathalie, for all of this information on the financial situation, which is indeed a very healthy one. So let's talk about projects now. It's important in a year like 2020 with COVID that we keep our guard up because this represents the future of the company. So the first is digital. We call this digital first. We're in a fully digital period. We're living in a digital world. And so how do we work with this, Stanislas?

So digital involves 2 real topics, everything is digital today. And in our business, in the business of our customers, the digital relationship with customers and the digital transactions are becoming a real starting point and not a development and expansion point. So let's talk about what we're doing in relational digital, transactional digital. Let's start with the development of e-commerce, and to bring in some content on something that we've really put forward in 2020. Today, we feel that our e-commerce sales have grown by 8 points in our sales in 2020 compared to 2019 to represent 35% of our total turnover. These e-commerce sales take place with the pure players, Amazon, for instance, Cdiscount in marketplaces also Amazon, Alibaba, JingDong, what we -- click and mortar business. So physical shops that have a digital presence like Macy's, Liverpool in Mexico and many others. And the last point is the direct-to-customer sales online, what we call DTC online, and this is an activity that we're really ramping up, and it's an approximate figure because we're sure what we sell to pure players because this is a direct B2C sale. But on the marketplaces, the click and mortar is always -- are always estimates linked information that we get back from the customers. So this is not completely firm information. The progress of online sales has taken place everywhere. But before that, so we've seen this growth everywhere. Eurasia, 35% of our sales, plus 10 points. China, 62%, plus 9 points. Russia 40%, plus 20 points. And this is also true Germany, Brazil, Poland, France, with 10 additional points. So it's quite a widespread phenomenon. And this transactional relationship or digital relationship is being supported, by the way, we're working with our products online. So I'll give you some examples. On the right, you have the virtual launch of G6 in Korea. This is the new version of our Tefal pots and pans. It's -- there's a new coating with excellent durability and wear much higher than previously. This is Kay Paeng, who is the head of the Tefal Supor. And she has -- in this video doing a live launch in front of customers and journalists. And this is how we're launching our new products in 2020. You've heard about Le Grand Live that Moulinex is running. This is an operation in France with Cyril Lignac. And since I'm talking a lot, I'm now going to let you look at the video, which says a lot more than what a speech could put forward. [Presentation]

Always in France are just below, we won't show the whole video, but we have new full automatic cooks, coffee machines, incredible machines that were launched in live streaming on the sites of retailers in France, Cyril Lignac, we're very proud. We have over 4 million views in replay on his video and everything began in China with over 7 hours, I think, of live streaming. And so now it's become a fundamental element of our marketing mix. We use ambassadors, influencers in product categories, such as hair care, electrical cooking. On the right, you see ironing and increased elimination. We're talking about cooking and homemade as an essential element of our products. We use a lot of shelves in a lot of countries to explain the benefits of the products to consumers. You may see Claude Troisgros, a very famous Chef in Brazil, the son of a French Chef. There's Jamie Oliver there. He's been our partner for a long time, now over 15 years we've worked with him. We sold more than 25 million pots and pans signed by Jamie Oliver over the last 15 years. And once again, I'll let you discover how he talks about Ingenio. [Presentation]

So simple, straightforward. He speaks very good English actually. And it's an evolution of our relationship with, a very digital relationship with consumers through chefs, ambassadors, influencers. And we've been talking for the last few months of the development of our direct sales online. 2020 was very fruitful. We now have over 100 direct sales points online, which belonged to us. So we added 30 this year. We have an example here of the Tefal site in Poland, and we have own models on top on the left, you have WMF in Germany, Rowenta in Spain. Or sometimes, we have stores on marketplaces, working with us in the super store on Alibaba in China or below on the right, Wildberries in Russia, which is a big marketplace with the Tefal site. So intense activity on our relational and transactional relationship with consumers in 2020. We continue to work on our actual -- our owned stores. We have 1,300, 620 in China. In 2020, we opened 50 shops despite COVID and the restrictions lockdown. It's a fast-moving business. Every year, we have over 50 million visitors per year outside of China. And so these are opportunities that are very numerous to come into contact directly with our consumers to explain our products and to show what our brands can bring to them and to make them more and more loyal, and that's 6% of group sales, and that was maintained in 2020.

Thank you, Stanislas. Let's talk a little bit something that we're always very happy about, which is -- which are acquisitions and shares that we buy in companies, SEB Alliance often takes minority holdings in start-ups with technological innovation. And I think this Chefclub is a good example of an initiative this year through SEB Alliance. Chefclub is a French company based in Paris, which was created by 3 brothers, the Lang brothers, and who are specialists in the production and dissemination of culinary content with exchange online and with exchanges online, for example, through smartphones because it's -- their impact goes well beyond France and U.S., China and beyond this interest we've taken in this company. We launched a product together that's targeting millennials because we really want to get closer to this -- to these customers. Chefclub is a very good means to do that, and we lined cooking articles such as pans, which you can see on the screen. Just a few figures, and I think the most important one is 1.6 billion monthly views in December, January, it's huge and it's very interesting. And to live with such a dynamic company with 700,000 books sold. So the more we grow, the more we need to be entrepreneurial and imaginative and learn from others, especially start-ups. Second example, once again, very symbolic, StoreBound in the U.S., which is created by Mr. Dash, who's on screen. Dash, which we -- which has been around for a long time, and I think developed unbelievable know-how in digital marketing and the expertise of this company based in New York with about 50 people working for it is to really look -- work with the entire community, upstream to define the products to be developed and to propose these to consumers. We -- traditionally, we believe in products, we develop them and then we try to sell them. Here, they develop them by listening to what the community is saying, and by selling these through these communities. It's a totally different way of approaching the business. And I think, first, it's very interesting. It's an absolute priority for the consumer experience. We took a majority share in this company, and the founders remain shareholders, and we have a lot to learn. We can bring them our brands, our products, and they can bring us a new way of working. They're in the heart of New York. They are very dynamic. They have 1 million Instagram people and between 500,000 and 20 million followers. And it's gone from EUR 25 million to EUR 120 million in sales last year. And I think they will continue to grow this year. Two interesting shares, CASTALIE, a small start-up that wanted fine plastic bottles, get rid of them with this micro-filtered water fountain. We believe in this quite a lot. Today, it's a professional product, and very complementary with our professional coffee makers. We believe in this business. We're a minority shareholder, but we are going to develop technical partnerships -- technological partnerships and also marketing tools to try and widen our scope in terms of products and to try and deal with new consumer needs. Angell, of course, you've heard about. It's mostly electrically assisted bike with fantastic electronics. We have 2 things going on in this project. We're their exclusive industrial partner, and we make this bike in Is-sur-Tille in Burgundy. And we'll have a second model we're working on, smaller, which would be an S model. But we're also their partners and shareholders in their sales structure, mobility, it seems to us very important. We've been there for a while. We went ahead with the acquisition of EMSA for -- with the boxes in glass or plastic for lunch boxes. And mobility will be an important part of our business, and we need to get in there. The other thing that is the development -- is sustainable development. We're continuing, of course, to take initiatives. We have now become the specialists for repairs and the development of service centers, which are independent. We always thought that it was horrible to throw out an entire iron because the thermostat doesn't work. So it's an old-fashioned approach, but it has become very important for consumers today. We went 1 step further by proposing this year a set fee for replacements for -- 40% for replacing the entire iron or any other product. And people have been responding to that very favorably. The logic is let's preserve our planet. Let's stop throwing things out, which we don't have to and also to repair. We have an association, and we have Repair SEB, which is a center for repairing small domestic appliances, but also a way of getting back into the work market which is -- it's a private company, and to help people who have been excluded from the job market for a while. And they will also take care of rentals, which hasn't become a big activity yet, but we think it might grow because for those people who want to, for example, rent a clad machine because they don't use it often. Also in sustainable development, 2 initiatives. The first is the design, what we call inclusive design. You may not know -- be aware of this expression. It's the opposite of noninclusive, to avoid exclusion or people who maybe had some sort of impairment or some visual deficiency. Some people don't see things as well. I'll take out my glasses because I'm part of this population. So we need to evolve because we haven't worked sufficiently to facilitate our consumers' lives. For example, if we're left hand -- people who use their left had rather than right hand, lefties are sometimes less capable of using our devices. And there's something there that is a fundamental trend, and it's an initial initiative, but there'll be many more to come. And the last aspect is for renewable energies, where we intend to participate in developing renewable energies. So we already have 6 sites with solar panels, service support structures or industrial plants in, for example, Pont-Évêque, Montebello, which is the Wilbur Curtis plant in Los Angeles, and also in Rio De Janeiro in -- Rionegro sorry, in Colombia. And we have other studies in France, China, Egypt or Vietnam and another important point, but I think CSR is no longer something that's a marginal activity, but must really feed the growth of the group. And this is our favorite section, the last section. We can finish. We can't talk about SEB without product innovation. I'll go quickly. But it's something I need to talk about, even if I'm a little bit late in every area, in professional VMF (sic) [ WMF] expression for McDonald's is Barista that you can find in any café in France and beyond because it's totally automatic, no need to know how to make the coffee and the machine makes the coffee, which allows you to have a consistent replication of the process. The professional coffee is WMF 1300S, which is an entry-level with -- once again, with the same look, our other WMF coffee makers share, so -- which is with our Swiss SEB brand and which offers consumers a lot of very different drinks and which is made in Selongey. We also have worked with apps, My App Café, which is connected to a machine, allows the consumer to order for the drink, to pay and to do that on the smart front. So we're more and more connected. I think last year, we talked about our connection of our devices to allow big American chains to know exactly what consumers bought at any given moment in any sales point, and so connection will be increasingly present in our machines, whether that's WMF, Schaerer or Wilbur Curtis. Let's come back to our first love, small domestic appliances for consumers, preparation of food and cooking with Cookeo Touch and i-Companion XL Touch (sic) [ i-Companion Touch XL ]. I'll not recommend this, but you can press on the claret, and you'll see a small presentation. Huge success in 2020 and being deployed internationally, which allow us to continue increasing the quality level. And I think it's a trend that is durable, and we're investing in this. Easy Fry is the continuation of fries without oil, but in Brazil, J6, which is a technical term, I forgot the commercial land. It's very important. We see that cooking utensils will be replaced 5 years or so, it will be 25 million J6 pans will be sold in the world, which we launched this year in 40 countries and which will represent 25 million. Every year, we sell about 100 million pans. And we have worked on this very hard with a lot of investments. There is -- there are advantages of the Thermospot, which is new, with better -- more even cooking surface and also a much more solid anti-scratching surface and improving it very quickly. China now, kitchen chef Supor, an oil-less fried -- frying machine and a very important espresso machine, our first machine that in our partnership -- in the partnership we've had for 20 years, which is an espresso made Mayenne, in Western France to make latte macchiato, cappuccino. And then finally, the silent high-speed blender by Supor. It's a new generation. In China, we're traditionally serving makers that then continues, but we're replacing the traditional and high-speed blenders, which are stronger and which are -- allow you to make all sorts of culinary preparation. Let me finish up with this part on small domestic equipment for household care, home care, as we see this get the new Rowenta Air Force, which we call The Versatile vacuum cleaner. We had a growth of 25%. We continue to -- with the biggest sector in small domestic appliances, which allows us to gain market shares. And we are the leaders in numerous countries, in particular, in Eastern Europe, clean and steam, which allows you to vacuum and to clean with steam. We're also looking at robots and -- which means that you don't need to -- which vacuum without any effort and sanitary pure air product and eliminate viruses with this machine, we call the CUBE, which is right beside me, which is a steam cleaner and allows you to get rid of 99% of viruses and contributes to the purification of the air that we breathe indoors. And it also treats furniture such as sofas and cushions and for air purification. I think it's a new trend that's developing, and we have a small company called ETHERA, which we bought a couple of years ago through SEB Alliance and is purifier, like many purifiers, where it has a filter, but also discharge from formaldehyde, which are toxic pollution products that come out of our carpets and our wallpaper, so that's a plus that our competitors don't have. And we think that air purification is something that we're going to work on hard because indoor area is more polluted than outside area. So I think we're going to have another good year. So we've been talking for an hour. Let me -- I just have 5 minutes to give you some forward-looking comments for maybe one last here for 2020, it's the title, I think strong resilience and the solidity of the group, which we were able to demonstrate during the crisis with rapid development and to bring specific answers to continue and accelerate our project on a structural basis, which I think demonstrates that our model is still based on a long-term approach. 2021, what's the environment, with very unstable hygienic conditions with restrictions in many countries, including France and a situation which is very difficult for what we call -- which are hotels, restaurants and cafés, which is still closed for the most part. The positive effect, of course, is the beginning of vaccinations in many countries with the light at the end of the tunnel. If we go beyond COVID, we'll have a volatile currency situation, even if we think it will be less unfavorable than in 2021 -- than in 2020, but will still have an impact on operational results. Price levels, which will be higher compared -- probably higher raw material costs and freight costs, which will also go up because of the lack of transport, especially on the seas and something else, which should be an encouragement to e-commerce because of the restrictions in circulation. How do we see things? We'll qualify our vision that we are cautiously optimistic like everyone else. We have limited visibility. We don't know when the measures will take care of the pandemic. So it will play within a few months. We observe a good solid beginning of the year for consumer goods, which is sustained, which is in line with the growth in the second half of 2020. We have a lot of new products, which will be bringing up in the next few weeks. And a lot of activation in marketing and advertising and publicity, and more support for marketing when we hope that this will reinforce three -- the e-commerce. And in the first half, there'd be a basic effect because Nathalie was saying in 2020, we had a very bad half compared to the second half for our professional activities. We have clearly no visibility, but we're betting on gradual regularization beginning in the second half, when there will be more people being vaccinated in our countries. When it comes to currency, raw materials and freight, we think there will be a negative, will still continue, but will be lesser than this year, I'm repeating myself, and freight will also be a higher cost. To conclude, for 2021, we see today a return to organic growth in sales and growth in operational results. So a positive year to come. Thank you very much for your attention, and we are now open to your questions.

[Operator Instructions] We have a question from Nicolas Langlet.

Hello, everyone. I hope that you can hear me. I have 3 questions. Firstly, on China, can you tell us how -- what the trends were for the Chinese New Year. Last year, you talked about an increase in competition from the smaller players. Is this something that is becoming a new normal for you? Are you still feeling this competitive pressure? And in the past, you said that you were anticipating more than 10% growth in China. Is this still something that you're expecting after the crisis? Question 2 is a bit more general. On the COVID crisis, you should have a bit of a view over the changes in consumption, but are you going to -- are you thinking that there'll be structural changes in your product offer, your industrial organization or anything else in your strategy? Or once the situation is back to normal, will you consider in the same way? And my last question concerns the raw material, currency and price/mix equation. You talked about an increase in the commodities of raw materials, and we had a high impact on the price/mix in Q2, and I think you'll have the same effect next year. If you put this all together, are we having a globally neutral equation or more negative that's going to impact you in 2021?

Well, there are a lot of questions in there for everybody. Thank you, Nicolas, and we'll start with Stanislas to talk about China and then the Chinese New Year, and you can also talk about the organization. And Nathalie, raw materials and the price mix.

Thank you, Nicolas. Thank you, Thierry. If we bet that you're going to ask 3 questions, we would have been pretty close to these ones. So the business in China was definitely shaken up, and we -- what do we observe in China? We observe that the Chinese New Year's, it's a bit early to give you the figures, but we'll tell you what we observed in December. For 11/11, which is -- so a performance that was quite good in terms of volume, quite reasonable in terms of growth and a bit more tense in terms of prices, particularly linked to the evolution of offline and online. So I'm going to keep it short. And then I'll give the floor to Thierry, who will give you a bigger overview. Our online prices that are up are offline prices of off -- up. The online is lower than offline. So the explosion of the online category means that the average price is going down. So that's what we observe in the short term. And I think, Thierry, you have a bit more vision on these different points, and perhaps you'd like to give your analysis of the underlying conditions.

Thank you, Stanislas. What we've been saying for a few years now is that we believe that China will not be able to continue to grow at more than 10% a year. That's what we've been expecting because the -- there's the rate of household equipment that's going down. Now for the last 2 years -- 2, 3 years, what we've been saying is, what's important is the progression of online, which is important, plus 60% of sales were done online and that's been accompanied by a change in paradigm in terms of the price. For offline, we continue to have high prices. But on online, we're really seeing that, that's killing prices. This leads me to think about what we saw in Europe in 2004. When we witnessed the arrival of the stores own brands that we're bringing the prices down, and we're saying the same thing, this inversion of the phenomenon. So on the markets that are growing, we have a big core range with a small low end and a small high end, and that's turning into what we're calling the sablier effect, so the hourglass effect, because people that have more money are prepared to spend more money for innovation. And this is what we've seen. So we're seeing the squeeze of the middle with this hourglass effect. We talked about that going increasingly premium with an increase in prices and the products that were -- we sold 10 years ago with the Supor SEB brands had nothing to do with what we're selling today, selling products at RMB 500 that was impossible a few years ago. And thanks to online and not companies -- stores own brands or no name brands, we're seeing new players on the market that are proposing products that we can find easily because there is an incredible number of producers in China, so they are very low prices. And that's what we're seeing today on the market. We're seeing the prices going down with 2 very different segments, online and offline. So what do we think? We think and we observe on the market that there are certain number of players that really want to maintain their market share on these low-end segments, and they're losing margin points. And we're lucky enough to have other growth drivers that are working well. We're -- we've proven that we're able to grow in Europe and EMEA strongly. So we're trying to make the right decisions, defend our margins, that's important. Vanity is profit -- vanity is not profit, but rather insanity. So we feel very strongly about maintaining our margins. So we are not going to change our strategy. We want to continue to push them in increasingly premium market. And we see -- we think that in the next few years, we'll see the development of very cheap products, but also see growth in the higher end products, particularly online. And this is what we're trying to do, this is what we are doing. And I think that many of our classic competitors will be fighting the same battle, I hope so anyway. I do observe that when you look at offline, there are 3 main players in China. Whilst online, there are lots of small players, and we'll see 10 years from now what the landscape looks like, if it's not more in line with the offline situation. So that was a bit of information about China. If you'd like to answer on COVID. COVID and the impact on COVID on consumption habits and on the behavior of distributors, and more generally on the supply chain sourcing industrial strategies in the group, just let me just remind you of a few key points of the group strategy. We have a large coverage of categories, of countries, of price segments, a strategy based on ramping up, and quality and are based on innovation. And this is -- this strategy is validated in crisis and in times of growth, we're seeing that. Our results for 2020 confirms that our strategy is well founded. During the COVID crisis, today, we would like all of us to be over. But in Europe, we're still in lockdown, in many areas in England and in Germany and lots of shops are still closed. And so we're not out of the crisis. And we can't draw any conclusions on any possible evolutions in consumer trends and consumer behavior because we're still in the middle of the crisis. However, what we can say and something that will be sustainable, and that's the development and the explosion of e-commerce. E-commerce has recruited a lot of consumers that were not really buying online. They weren't open to this type of sales channel and what we're seeing in the different countries in Europe, North and South America, is that this trend of e-commerce is -- might drop slightly after COVID, but will remain at a high level, and this impacts us in our supply chain activity. It impacts us in terms of the responsiveness of our customer service. But more than 1/3 of our volumes are built or fabricated in Europe, close to our customers. And so this is important, and we need to adapt our flows, our supply chain to the development of e-commerce. But we feel that we're well armed to be able to deal with these upcoming changes by reacting to the changes in the market. Unfortunately, I can't answer or tell you what the markets will look like in 6 months, 1 year, 2 years in terms of consumer behavior because we absolutely don't know. There's hypothesis that say that it's going to get worse, and some say it's going to get -- it's going to retract. We're just trying to be agile. We're continuing our work, to bring innovation to market, to invest in innovation in terms of development and market activation. We will remain agile in the way that we deal with the changes in demand on the market. Let me just add something. You said exactly the word. Our industry is not capitalistic. We're not in an industry where there are a lot of huge investments in machinery and plants. It's 3% of turnover per year. That's not much, but our business can evolve very quickly. In the last 20 years, we've seen product categories that blew up and then disappeared. We see that linen care is not doing very well. I'm one of the rare people I see these days that still wear a tie. So linen care is something that's a sector that's really suffering. That's okay. We need to adapt, and we need to reinforce our position in other sectors. And then be a bit lighter on this one to begin with. If we put a camera on this new appliance, this could be an answer, the CUBE. That's the secret to our longevity. We know how to adapt. We're flexible. We're attentive to the market and so are our teams. For costs, for raw material costs...

Thank you, Thierry. So this year, we have some -- we're in headwinds with the exchange rates and the freight costs and raw material costs. We've talked a lot about currency the exchange rates. The devaluation of currency against euro really was accentuated in the third and fourth quarters of last year. And we have a comparability effect that will be unfavorable to us in the first half of the year. So we'll continue to be impacted in terms of our sales and also on our ORfA in 2021. The negative impact we estimate of the currency on ORfA will be roughly EUR 31 million. Now for commodities of raw materials, you know that the price is fluctuating. Last year, we benefited from a slight improvement in the situation compared with 2019. And this year, as I said earlier, we have a more negative situation, and the impact is roughly EUR 20 million. What's new this year and that's a direct consequence of the crisis is that we're seeing a significant increase in the freight costs. All of the companies that are distributors or that have distribution points, that are distant from their manufacturing sites, have also brought this up. There's a lot of disorganization in the long supply chains and in the routes between Asia-Europe, Asia-U.S., on the main trade companies that have really increased the cost of containers and that was not a situation that we were used to or expecting. And we think today that the average increase in the cost of the container in 2021 compared with what it was in 2020 will have a negative impact on our operating income of roughly EUR 30 million. So of course, each year, the group has ambitions and sets objectives to increase prices to overcome the currency effects and to enrich the mix to counterbalance any currency problems. But today, when demand is quite high at the beginning of the year, which is -- which makes the situation a bit easier for us -- I am not in charge of sales in the company, but I would say it that way. Today, we have -- we believe we have the ability to counter these impacts with our product mix and by passing on some price increases and also by increasing our productivity, obviously.

On the EUR 30 million you are talking about, do you already have a positive contribution linked to the short position in dollars and in renminbi, then the Chinese currency. So will this impact you more in 2022 than it has...

Well, it's a mix of both. You're right, when we have an impact on the ORfA, it's linked to the variation in our hedging positions also. So there is some hypothesis about the current rates that are in our favor and for the dollar, but less, if we're calculating this based on current rates.

We have a question from Christophe Chaput.

I have several. The first concerning China. Online sales increased, but offline has probably gone down. What are you expecting in 2021 for offline sales? Do you think it will come back to growth? Second question, still China. I didn't understand your explanation on Chinese New Year, how the sales did at the beginning of the year on the Chinese market. The beginning of the year was solid. Can we have details by main geographic zones, EMEA, Americas, Europe? And then my third question on the restructuring of WMF in 2020. How are you going to ramp up the profitability in 2021 and 2022 for WMF?

First of all, let's go back to China. The Chinese New Year, it's a bit early to conclude. The Chinese went back to work on Monday. The figures we have are neither extraordinary nor surprising. There's a good performance. We're looking at the results in sales and margins, to give you a more precise answer. Second question, on the evolution of offline, I think online will not regress in terms of its weight in sales, but the offline because of the closure, 2 months last year, and we'll have 12 months opening rather than 10 last year, would allow us to have some more higher performance levels, but in a context, a structural decline. So I don't know what that will end up with. So basic effect will be favorable. Will there be an inversion that's durable between the curve, between offline and online? I think that the development of online is more structural. Now the question on the beginning of the year, we're 6 weeks into the beginning of the year. It's early days. We have discount sales, close sales. And it's an online market mainly with the trend in the third and fourth quarters. We see that in most geographies, but it's very early days to give you some definite results. But I think we're doing well.

Restructuring at WMF?

The -- how WMF's consumer activity is? We said that we would restructure this activity with several elements, to begin with the closure of an industrial plant with transfer of activities to other sites in France and Italy to get a better cost effect. This has happened -- that's happened since the end of last year, that's positive. We also announced that we would reorganize the structure of WMF and reduction of GNN. So the idea of reducing personnel was implemented in the last point, which is less important, it's a more dynamic management of sales where, of course, we didn't have enough profitability and so we executed that as well. So overall, we see an improvement in the profitability of this activity. But unfortunately, 2020 was not good for benefiting from all these measures because of COVID at the beginning of the year. We had charges with extra charges before we transferred the activity to France and Italy. And we suffered from the closure of the stores. So to summarize all of the measures that were executed, we see some first results. We didn't quite get the effect because of the crisis, but we're confident that profitability will improve on WMF on the consumer side in 2021.

The first one is about net working capital on sales. I would like to better understand what is your view for 2021, after this very strong year? And my second question is about your view about the food preparation. Do you see that this year, this good trend could continue or reduce? And if you can elaborate a little bit on this? And finally, on the EBITDA ORfA level. I would like to better understand if I understood correctly, do you expect it to offset ForEx, raw material and freight rate with pricing?

Thank you very much, Alessandro. Nathalie, do you want to take the first question on net working capital?