Earnings Release • Jan 23, 2019
Earnings Release
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"Sonae MC reached another strong year with a significant reinforcement of the market leadership. Total sales surpassed €4bn with the highest LfL sales growth of the last 10 years and with all formats posting positive LfL figures, particularly the proximity stores. This performance clearly shows that the finetuning of our value proposition has been well received by our customers and gives us strong confidence for the future."
Luís Moutinho, Sonae MC CEO
"Worten kept its upward trend and ended the year with a very strong 8% top line growth reaching € 1.1bn of total sales. An Iberian player that has been able to clearly increase its market share, with a strengthened leadership position in Portugal. 2018 also accelerated our digital transformation with increasingly higher weight of e-commerce sales and the launch of a marketplace offering in Portugal."
Miguel Mota Freitas, Worten CEO
"Sonae Sports & Fashion recovered in the 4Q, being able to grow above the market and ending 2018 with positive top line performance across all key brands of our portfolio, in spite of a very tough year for the whole sector."
Luís Reis, Sonae S&F CEO
"ISRG banners had a very positive sales performance during 2018, posting strong growth levels and reinforcing our position as the second largest Iberian sports retailer, while successfully executing the value creation plan for the company. I am more confident than ever that we will further improve our value propositions and continue to grow in all our formats both in Spain and in Portugal."
Miguel Mota Freitas, ISRG CEO
| Sonae Retail sales | ||||||
|---|---|---|---|---|---|---|
| Million euros | 2017 | 2018 | y.o.y | 4Q17 | 4Q18 | y.o.y |
| Sonae Retail | 5,869 | 6,317 | 7.6% | 1,652 | 1,805 | 9.3% |
| Sonae MC | 3,884 | 4,158 | 7.0% | 1,070 | 1,146 | 7.1% |
| Worten | 1,018 | 1,096 | 7.6% | 317 | 343 | 8.2% |
| Sonae Sports & Fashion (1) | 362 | 369 | 1.9% | 97 | 104 | 7.8% |
| ISRG (2) | 527 | 610 | 15.9% | 147 | 190 | 29.1% |
| Maxmat | 78 | 85 | 8.5% | 20 | 22 | 5.4% |
(2) Aggregated sales of ISRG banners from January to December (2017 and 2018) and from October to December (4Q). These figures do not correspond to the calendar reporting dates of JD Sports.
Total retail sales reached € 6,317M in 2018, growing 7.6% y.o.y., benefiting from improvements in all divisions and supported by a favourable macroeconomic environment. A special note to online sales which grew close to 30% y.o.y., with the strong contributions from Worten, Sonae MC and ISRG banners.
Sonae MC was again able to deliver a strong top line growth of 7.0% y.o.y., surpassing € 4bn in sales by the end of 2018. This solid performance was underpinned by both LfL performance and expansion of the store network. LfL sales growth was 2.8% in the FY18, significantly above the inflation for the same period (0.7%). In terms of store openings, Sonae MC ended the year with an additional 13 Continente Bom Dia and 3 Continente Modelo stores.
Regarding the 4Q18, and despite the tough comparable in 4Q17 (LfL 3.2%), Sonae MC was able to reach a LfL sales growth of 3.6%, fuelled by positive figures in all of its formats, especially in the proximity segment and clearly above food inflation in the period (0.3%). In the most important quarter of the year, which includes the Christmas season, Sonae MC proved once again its solid profile and value proposition and was able to keep reinforcing its leadership in a challenging market.
Note: Sonae S&F figures do not include Berg.
Note: Aggregated sales of ISRG banners from January to December (2017 and 2018). These figures do not correspond to the calendar reporting dates of JD Sports.
Worten maintained its positive track record and registered € 1.1bn in sales, 7.6% above the € 1bn threshold surpassed in FY17. This performance was underpinned by the 5.6% LfL sales growth and the ecommerce double digit growth (both in Portugal and in Spain).
In spite of the tough comparable (4Q17 LfL 10.2%), LfL sales grew 5.6% in the 4Q18 with Worten's top line reaching € 343M, implying a total sales growth of 8.2% y.o.y., with an important contribution from the Black Friday period. With this performance, Worten further reinforced its market position, namely in Portugal.
Sonae S&F ended this challenging year for the whole fashion sector with a positive 4Q, growing above market references.
The business recorded a 7.3% LfL growth and total sales of € 104M in the 4Q18, implying a total growth of 7.8% when compared to 4Q17. With this quarterly performance, Sonae S&F sales reached € 369M in 2018, representing a 1.9% growth when compared to 2017.
Online sales also accelerated in the year, supported by strong growth levels across in all banners.
Regarding ISRG, total sales for the last 12 months reached € 610M, implying an overall growth of 15.9% y.o.y, mostly driven by the performances of both Sprinter and JD.
The last quarter was particularly positive, with sales increasing 29.1% y.o.y. to € 190M, and +17.4% LfL, with all banners posting double-digit growth figures.
This document may contain forward-looking information and statements, based on management's current expectations or beliefs. Forward-looking statements are statements that should not be regarded as historical facts.
These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including, but not limited to, changes in regulation, industry and economic conditions; and the effects of competition. Forward-looking statements may be identified by words such as "believes," "expects," "anticipates," "projects," "intends," "should," "seeks," "estimates," "future" or similar expressions.
Report available at Sonae's institutional website Although these statements reflect our current expectations, which we believe are reasonable, investors and analysts, and generally all recipients of this document, are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. You are cautioned not to put undue reliance on any forward-looking information or statements. We do not undertake any obligation to update any forward-looking information or statements.
Report available at Sonae's institutional website www.sonae.pt
Patrícia Vieira Pinto Head of Investor Relations [email protected] Tel.: + 351 22 010 4794
Catarina Oliveira Fernandes Head of Communications, Brand and Corporate Responsibility [email protected] Tel.: + 351 22 010 4775
Sonae Lugar do Espido Via Norte 4471-909 Maia Portugal Tel.: +351 22 948 7522
SONAE is listed on the Euronext Stock Exchange. Information may also be accessed on Reuters under the symbol SONP.IN and on Bloomberg under the symbol SON PL
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