SRP Groupe (SRP) H2 2018 earnings summary

Executive summary

• FY18 revenue grew 2.6% as Internet revenue rose 5%; H2 profitability improved, with gross margin up 1.7 points YoY to 37.4%.

• The 2018–2020 performance plan prioritizes selective, sustainable growth and profitability improvements through margin gains, cost optimization and a more focused geographic footprint.

Financial highlights

• FY18 net revenue was €672.2M, up 2.6%; gross profit increased 2.0% to €243.8M, while gross margin edged down to 36.3% from 36.5%.

• FY18 EBITDA was €5.1M versus €13.1M in FY17; operating loss narrowed to €6.3M from €7.3M, and net loss narrowed to €4.4M from €5.2M.

• H2 EBITDA improved to €5.9M from €2.2M; H2 net income was €2.1M versus a €5.0M net loss in H2-17.

• H2 cash from operating activities was €25.4M; FY18 net cash flow was €29.5M, compared with a €46.1M outflow in FY17.

Outlook and guidance

• The plan targets €8–10M of Opex savings by 2020 through logistics and fulfillment productivity, G&A controls, marketing optimization and footprint rationalization.

• The new warehouse was scheduled to open at the end of Q3 2019; logistics insourcing is intended to improve delivery speed and cost.

• SRP Media is expected to contribute a confirmed positive EBITDA impact of €4M in 2020, alongside accelerating data monetization and expanding the 360° brand offering.

• Focus markets are Belgium, Italy, Spain and Portugal; planned closures cover B2C activity in Germany and Poland and multi-currency websites.