Maisons du Monde S.A. (ZMM.F) Earnings Call Transcript & Summary

[Presentation] Hello, and a very warm welcome to you all. Thank you for being with us for Maisons du Monde's Capital Markets Day. I will be hosting today's session together with Regis Massuyeau, our Group CFO. Hello, Regis.

Hello, Julie. Hello, everyone. Very glad to have you all with us.

Regis will be joining us a little later in the program. Thank you, Regis.

Thank you.

Before we get started, allow me to give you a quick reminder of who we are. Maisons du Monde is the European leader in inspirational and affordable home and living. And this leadership position is based on 3 key pillars: firstly, a direct-to-consumer love brand; secondly, a distinctive business model that delivers high and sustainable growth; and thirdly, a robust financial model that drives increasing shareholder returns. Regis and I will be going into much more detail on these pillars later in the presentation. [indiscernible] all our stakeholders, while continuing to deliver high growth. More specifically, we see growth as a means to create value, and that's how we traded, assessing growth avenues for their capacity to create sustainable returns for our stakeholders. And during this Capital Markets Day, we will be explaining to you exactly how we are doing this. So let me briefly walk you through today's agenda. We will begin by telling you about the market opportunity in the home and living space. We will then be giving you a detailed explanation of each of the 3 key pillars I just mentioned. And then before we take your questions in the Q&A session, I will share our outlook for the next 4 years. So let's start, by looking at the market, which for us combines 2 complementary categories, furniture, which drives hybrid size and decoration, which brings better margins. I think the first and perhaps most obvious point to make is that this is a vast market. And it is a market that has been growing at a steady rate over the past 5 years. Another key point about the market is that it is highly fragmented, with IKEA occupying a unique position. With EUR 40 billion in global annual revenue, it is the #1 player in each of the European markets, including France, where it stands at a 14% market share. And if you then look at the next 10 biggest [indiscernible] after that, collectively, they have a market share of less than 30%. Maisons du Monde is one of the strongest among those next 10, with a market share of over 4%. And our growth over the years has been thanks to our market share gains. Going forward, growing market share remains our strategy. And as you can see, there is plenty of room to do so. As this chart shows, the pandemic triggered a strong and lasting shift towards e-commerce in Home & Living, more than in other categories. And Maisons du Monde was visibly able to capture this opportunity with online sales growth well above the category. Although the pandemic accelerated the shift in consumer habits towards digital platforms, we still have a lot of catch-up before we draw and evolve with more mature categories, such as fashion or electronics. This shows vast potential for growth in online sales. And as far as Maisons du Monde is concerned, this is very good news. Looking ahead, the prospects are positive across Europe. After more than a year of good dynamics lifted by COVID lockdown and post lockdown demand, consumers are still looking to spend more on their homes. Over the 60% say they want to redecorate their homes over the next 12 months, which is more than over the last period. One driver of this is working from home, which is expected to become an increasingly common practice. And beyond feeling cosy and efficient at home, consumers say they also feel more inclined to move than in the past 5 years. Departures for the countryside or to a bigger place, all these projects will be opportunities for furniture and decoration purchases. And as a matter of fact, the category is expected to grow at a rate of about 2% year-on for the next 5 years, which is faster than the past 5. As I just said, the digital shift has been one key outcome of the pandemic. The other one has been a strong increase of consumer interest in environmental and social issues. Not only do people feel more directly concerned, they also want companies to play their part. And through the products they choose to buy, they want to sip on actions they approve of. Credit cards are modern voting ballots. In the light of these trends, I believe that Maisons du Monde has a compelling value proposition, perfectly positioned to succeed in tumorous home and living. Allow me to elaborate. Let's return to the 3 pillars I mentioned at the start. The first pillar is that we are a direct-to-consumer love brand. This direct access means we can gain a deep understanding of our customers and create a memorable experience for them. Looking at our net promoter score measured across a panel of 30 brands, we are one of the most recommended brands among home & living specialists in all of Europe. Despite strong local brands established in each market, we are always in the top 3. Even in newer geographies like Germany or Switzerland, consumers who already know Maisons du Monde seem to really like what we do. And what we offer is perceived as pretty distinctive. Indeed, among brands they know of and visit in Home & Living, consumers say that Maisons du Monde is one of the brands that most brightens their day and one that sells products that they are particularly proud to having in their homes. In fact, our customers say, we make them feel good. Moreover, thanks to our affordable and inspirational positioning and an offering that covers a wide array of stocks and budget, we are able to speak to each and all. And that what comes across here on this slide. Throughout Europe, the distribution of our customer base spans all age groups. We are also relevant to people in different income brackets. We are speaking to families as well as to couples without children. We do have a broad customer base, and therefore, plenty of opportunities to grow that base. Okay. So what exactly do our customers like about us? Here is what they've been saying. Across our different markets, we are perceived as leading the pack on originality, products I cannot find elsewhere, quality, quality products with elegant materials and inspiration, where I can find inspiration. Indeed, Maisons du Monde is a love brand with key attributes that set us apart in the home finishings market. Creativity and inspiration are part of our DNA. Both have been core concepts for us since day 1. Another pillar has been developing strongly over the last 5 years, and this is engagement. Engagement with our user communities and with the needs of people and the planet. Engagement has become our third pillar and differentiating attribute. This unique combination is what makes our love brand so relevant today and even more tomorrow. So I'd like to talk about each of these pillars in more detail. But first, let's watch a short video design-making process. [Presentation]

Style, quality, sustainability, choice. These are the key consumer outcomes delivered by creativity at Maisons du Monde. We have a very specific way of approaching creativity. We see it as a virtuous ecosystem that combines art and science. To put it differently, the creative talent of our teams and partners is enriched by the power of data. And the marketplace we just launched is harnessing that creative house power even more effectively by expanding our options in a very structured and strategic way. So let's detail each of these components. Consumers are all different, and this is what we love about them. On the French market, for instance, that you can see here on the left-hand side of the slide, there is no one start preference. There is a wide range from contemporary to pop, including Scandinavian or country. And looking at specific age groups, such as 18 to 24 years old, you can see that the top 3 stars there, design, zen and industrial are completely different from those of the over 65s, which are contemporary, classic chic and country. And the same goes for the rest of Europe. At Maisons du Monde, we are proud to address all of these preferences. And we do that over time. As you can see here on the right-hand side of the slide, we continuously adapt and rework our product offering so that we stay on trend and keep delighting our customers year after year. So how do we manage to stay in sync with our customers? First, we have a lot of creative house power, and we keep strengthening this asset over time. We have grown the number of stylists and graphic designers working at Maisons du Monde to as many as 30 now. And we have no less than 170 people in our product teams creating or curating our 18,000 products every year. We also work in close partnership with our suppliers, whether it's a new hand knitting technique such as wood carving or textile embroidery or an idea on finishing, our long-term relationships enable us to work side by side for the end consumer. 3 years ago, we started complementing this talent through design school contest for eco-friendly products. This year, we took a step further by inviting independent designers to do exclusive creations for us. And also by launching our first off-cycle capsule collection with Rene [indiscernible]. These are secondhand products revisited by 2 trendy creators and sold as one-of-a-kind pieces. The collection was sold out in a matter of 3 weeks, and all profits were donated to a nonprofit organization that helps women in need. Today, more than ever, creativity is our motto, with an increasing focus on sustainability. To make the most of this creative potential, we are starting using more data and using data more. Starting with the reaches of all customer feedback. This year, we started gathering massive data at the product level from people who had just made a purchase. In the space of 9 months, we collected nearly 80,000 reviews, about 12,000 of our products. This obviously provides very valuable insights, which we share with our product teams for continuous improvement. And with the launch of our curated marketplace, we are building an even bigger and richer creative ecosystem. In its first year, our marketplace has boosted our product offering from 18,000 to over 100,000. That's 700 brands from over 20 countries. Once again, Maisons du Monde delivers on its promise to bring talent from all over the world, with high standards in terms of style, quality, affordability and sustainability. All of our partner vendors are signatory of the United Nation's global compact principles for natural resource preservation and civil rights. That's a very uncommon ask for a marketplace operator. Furthermore, we actively select and promote those brands whose offering is eco-friendly or made in Europe. Today, as much as 30% of our 85,000 marketplace products meet at least 1 of these 2 criteria. Looking ahead, we will continue to offer the best combination of style, quality, affordability and sustainability. Creativity will be further boosted as we keep opening up our creative ecosystem. On top of the external talents who have been joining us recently, we will invite our communities to create with and for us. Through design contests or collaborations, Maisons du Monde colleagues, influencers and customers will be invited to express their own creativity in the form of many new and exclusive designs to bring to our deco fans. We will also further enhance the value-for-money proposition of our products. On top of our style and trends-based approach to collectioning, we will implement a category management approach that will include our marketplace offering to ensure that we are addressing every user need in the most efficient way. Also, in addition to further increasing product quality at each price point through differentiated quality standards, we will examine our pricing approach to make sure we are pricing products based on value perceived by our customers relative to the competition. This will be particularly valuable in the context of high cost and price volatility across the board. And finally, in spring 2022, we will introduce our responsible product label to guide consumer choices. Today, this label aims at promoting 2 different goals, products made with sustainable materials either certified or recycled and products made in Europe. After 2 years of intense work, including the introduction of recycled materials in textile and the relocation to France of the majority of our sofa production, we are proud to announce that 20% of our offering will be eligible already when the label is released next spring. Well, our ambition is that no less than 40% of our offering will be labeled as responsible by 2025. And this target stands for our marketplace as well. This significant move to sustainable offering is certainly one of the greatest changes underway in our company right now, one that makes us particularly proud. So let me turn now to the second of our 3 differentiating attributes, inspiration. How do we inspire? Well, in 3 main ways. Firstly, by providing an immersive experience across all our consumer touch points; secondly, by offering customer coaching; and thirdly, by giving our community a daily dose of inspiration that makes us part of their lives. Let me tell you a bit more. The immersive experience can be seen across Maisons du Monde universe, both online and offline. Of course, our stores provide the first opportunity to inspire our customers with fully furnished rooms in different styles. Our store experience is perceived by customers as truly distinctive in that regard. Our website is another key source of inspiration from thematic campaign to shop to [indiscernible], it offers a fantastic showcase of our products. And over the last years, we have been enriching our ecosystem with innovative adjacencies, notably with a series of hotels that are fully decorated with Maisons du Monde products, from the rooms, to the lobby, to the restaurant area, providing a real life and entirely shoppable experience of our brand. Meanwhile, Rhinov is our online-based and very affordable professional entire design service that provides spectacular 3D, before and after room designs. That, again, can be sent directly to your shopping cart. That's the immersive experience. Now coaching. Coaching takes place in a number of ways. First, in our stores with the support and guidance offered by our expert sales teams. Maisons du Monde colleagues are truly passionate about decoration. This is actually one of the big reasons they join us. And surveys show that customers visit us not to our product information, but really for decorating advice. And that creates a particularly strong bond with our customers as decoration is both intimate and emotionally involving. Second, on our website. Thanks to extensive imagery, decoration tips or celebrity home tools. Third, over the phone with a dedicated and highly trained team working in our call centers to provide support and coaching. And last but not least, Rhinov with the pallet of self-help tools to guide our customers, such as the highly popular Deco Quiz, where you can discover your very own style. So supporting our customers through the decision-making process is a key part of how we aim to inspire them. But we don't want this to certainly come to an end at checkout, we want to provide our customers with ideas and inspiration on an ongoing basis every single day. And how do we do this? Firstly, through our catalogs, which our customers view as coffee table books and often browse for ideas. Indeed, they have much more of a magazine feel. Secondly, our stores are a great source of regular inspiration. Every week, new products come in and are carefully staged to give our customers plenty of ideas. From Easter to Christmas, there is always something new and exciting happening in our shops. Thirdly, our website with its future paces, it's city guys that bring our collections to life through evocative cases of life in other cities or do-it-yourself tutorials, which our customers just love. And lastly, Rhinov, which offers inspiration that comes directly from their team of 30 professional interior designers. Like here, in our decoration tips in 1-minute videos, where our community receives easy-to-apply decoration advice. Tomorrow, we want to do even more to help our customers take action. First, through personalization. Our website and CRM will increasingly show users, products and teams likely to feed their tastes needs. We will push you that route by connecting new artificial intelligence-based algorithm. We will also offer consulting sessions online and in-store, so customers can get individual in-person advice. Moreover, we will revamp our loyalty program to make sure our customers feel even more rewarded and increase their share of wallet with us. Second, through localization. Whether through brand content or in-store merchandising, we aim to better adapt our offering to customers in ways that are talent to where they are and what is popular in that area. We will also strive to offer payment and delivery options that fit the specificities of each market. Third, through services. Our financing proposition is best-in-class in France already, with plans of up to 20 installments on a single purchase. We will soon deploy some of these financing options in the rest of Europe and offer financing for our marketplace offerings. We will also provide new services in line with our customer demands. First, we are preparing to publish product ratings on our website, alongside customer reviews so that customers get transparent peer-to-peer feedback on our products. Second, we will offer an option for customers to have their old furniture removed and recycled when they buy replacements from us. And third, we will propose a furniture assembly service. At every step of the way, we will strive to make inspiration relevant to customers and help them to convert it to action. So now that we've covered creativity and inspiration let's turn to our third pillar, engagement. Engagement means two things at Maisons du Monde; engagement with our customer and influencer communities and engagement for people and the planet, while better proof of consumer engagement that our growing customer base. Maisons du Monde has now over 7 million active customers across Europe, meaning people who have made a purchase during the past 12 months. That is 2 million more than 5 years ago. Customer base growth was particularly strong outside France, with our European customer bases growing by staggering 85% over the last 5 years. What this slide also shows is that our active customers are spending more and more money with us with an increase by nearly 20% of our annual spend per active customer compared to 2016. With as much as 2/3 of our business coming from repeat customers, it is clear that our customers really do love what Maisons du Monde offers, and they keep coming back to us over and over. And there's plenty evidence of the liking online. In the past few years, there's been a growing number of Maisons du Monde fan groups across Europe and across all social media, notably Facebook, Instagram and Pinterest. These communities have all grown massively and organically, creating their own hash tags, which shows how consumers relate to our brand and want to be part of the conversation. Looking specifically at Instagram, here, you can see a third-party research piece that shows engagement rates of the most popular home and living brands in each market. Each colored dot represents a brand. What's really striking here is the fact that accepting the one major player I mentioned to you at the start of the presentation, Maisons du Monde is the only company in a top 5 position across the board. Most of the other top 5 companies are local players, resonating with their domestic audiences. So in addition to showing you are engaged, our committees are, this slide also demonstrates that there seem to be 2 pan-European home decor brands and Maisons du Monde is one of them. One of the major sources of engagement with customers is Maisons du Monde's corporate social responsibility. As you know, Maisons du Monde is committed to preventing sustainable consumption and environmental consciousness. With that in mind, you won't find many discounts on our products. We avoid inciting unnecessary consumption by setting the most accurate level of demand for our given products right from the outset. And instead of Black Friday sales, we do what we call giving days, during which we donate what it causes by bringing our customers on board with a matching donation approach. Basically, we give away one product for each one purchased. Customer involvement is a constant at Maisons du Monde. Indeed, our customers feel particularly concerned about environmental and social issues. Every year, they finance up to 1/3 of the EUR 1.5 million we donate to the Maisons du Monde's Foundation through a rounding up mechanism and the checkout counter as many as half actually choose to round up the bill and make a micro-donation to our causes in the process, demonstrating the trust and endorsing the values they share with the company. On the social front, Maisons du Monde also wants to play its part. We have been scaling up our partnerships with the Red Cross, Emerus and [indiscernible] for years now. And of course, we feel call to provide the help we can in hard times like we did during the peak of the pandemic, whether that's through financing vaccination campaigns for suppliers in India or equipping hospitals to provide comfort for caregivers. This year, we will have given the equivalent of EUR 5 million of products to charities. Our engagement is strong, authentic and long standing. However, it is not visible by all yet. Surveys show that only 30% of our customers across Europe know about our commitments. Likewise, we are a love brand as shown by the high consumer engagement and repeat rates because our value proposition is lovable. Now the time has come to structure this approach around brand experts. To be sound, I have created a new executive committee position, Brand and CSR Executive Director, and I'm happy to announce that Nathalie Rospaski will be joining us next more to lead this department of 70 people. Combining existing positions like in stock on set, social media or CSR, and new positions, such as for our brand concerns, Nathalie and her team will have 3 main objectives: one, improving in fronted brand awareness in our main markets; two, reinforcing brand leadership; and three, delivering on our CSR ambitions. As former Deputy CEO of [indiscernible], the leading agency for lifetime trends and branding strategy in France, Nathalie is intimately familiar with the most successful DNVBs and lifestyle brands. She is also committed to social causes, especially equal opportunities for women. I am confident she will be instrumental to our next phase of brand building, and I welcome her warmly. With Nathalie and all our teams, we, at Maisons du Monde, will be making our brand mission more explicit. We aim to empower everyone to create their own feel-good home, a place of self-expression that is desirable and yet sustainable. Because building cosiness and fully expressing oneself at home is integral to the pursuit of happiness. Also because the world has so much to offer and to protect, and no one can durably feel good about themselves if the plan is at risk. And mostly because there is no need to choose between desirability and sustainability. Our forceful action as well as our intimate and growing relationships with our communities across Europe support our brand vision, to be the most desirable and sustainable Home & Living brand in Europe. And you've got it by now. So simply to sum up, the 3 attributes are the core of our love brand are: creativity, inspiration and engagement. Now let's talk about our business model. Clearly differentiated, it has consistently delivered high and sustainable growth over time. We are, of course, planning to keep it that way. So how are we going to do that? Fundamentally, we rely on 3 pillars to grow our business, pillars that were built and strengthened over the years. A distinctive omnichannel approach, a track record of successful expansion across Europe and industry leadership in terms of sustainability. These 3 pillars are all equally important to us, and they remain the solid foundation in which we will build our future. So I suggest we go through them one by one in greater detail. First, let's look at omnichannel, a distinctive model that combines online, marketplace and stores. As you can see on the slide, we have built a superior digital-led omnichannel model. In fact, we generate more than half of our revenues through digital assets. Let's break that down. Online, which could also be called e-commerce, has grown strongly and steadily and will reach well over 30% of our total sales this year. And on top of that, we also have our click-in-store system. These are sales made at stores on vendors tablets for products that cannot be seen on site and which are home delivered to customers or pick up later by them. These 2 channels together, what we call digital already drive more than half of all of our group sales. So before we go further, let's watch a short video to illustrate omnichannel at Maisons du Monde. [Presentation]

One reason for our omnichannel success is that consumers naturally have different journeys when it comes to buying a piece of furniture or decoration. Here, you see results of a survey where we ask people about their preferences when buying different products. You can see that people give too many reasons for buying in-store. If the product is expensive or needs to be tested for comfort, such as a sofa or a chair or if there's no specific need to enjoy the pleasure of shopping around. And this is the case for many decoration categories: tableware, textile, candles or kid accessories, you name it. Meanwhile, some products at the top here are more functional and need no comfort testing. TV stands or lamps are good examples. Their customers are satisfied purchasing online. So the choice to buy online or in-store depends a great deal on the financial or emotional involvement to purchase generates. Numbers confirm why omnichannel is a customer winning model. Analyzing our data, we've discovered that most of our customer journeys in Europe are indeed omnichannel. We have known for some time now that more store visits are prepared online. People check the website, open a new center or scroll on Instagram, and that triggers a design to come and visit a store. We've even encouraged this movement over the years through our drive-to-store strategy. What is interesting to observe here is that, in many cases, even when the purchase is ultimately made online, being able to see products in the store and talk to real people is essential. And this trend can be seen across Europe. For instance, research online, purchase off-line is extremely popular in Spain. Conversely, consumers may visit a store to get a feel for the product or get advice and then finalize the purchase online. As many of 3 quarters of online sales take place this in Italy. So as markets move online, it is important to keep in mind that a physical experience with a product or the brand is in our category, a key step in the decision-making process. People just really like to mix and match these channels, and that's what they have from their favorite brands. Not to mention that this results in pure product returns. A key element of this original proposition is a strong online platform. Here, the results, I believe, speak for themselves. In France, for instance, both traffic and sales are up tremendously. Traffic growth was one driver of performance, thanks to our ever-improving online marketing strategy. Over the first 9 months of the year, we've had an average of nearly 7 million unique visitors, which is almost double the traffic only 2 years ago. A key step in boosting our online traffic was the launch of our marketplace at the end of last year. Our performance is also the result of continuous effort to offer our online visitors a compelling value proposition. Regular AB testing and optimization have been proving effective. especially on mobile, which now represents 3/4 of our traffic and half of our orders. As a result of the sustained efforts across marketing and on-site experience optimization, we have been able to materially gain online market share especially through the COVID period with a 20% increase over just 2 years. One of our critical success factors is without a doubt our approach to data. Why? 2 reasons. First, because we moved early. We have been building best-in-class data capabilities over the past 5 years and are now well ahead of the curve. Today, we have one single data base, which brings together millions of data points from all sources, online and off-line cells, customer care, marketing spend or CRM, but also product sales performance, replenishment algorithm, customer reviews and so on. And all of this is delivered through cloud computing. So it's accessible, robust and green. We have been able to develop our own data science models, which we test and improve continuously. The second reason is that data is not pervasive in our organization. Across the business, no less than 800 KPIs are monitored and measured against targets. Today, over 200 of our colleagues make extensive use of our dashboards on a daily basis, and that is 10x more than 5 years ago. Another important milestone in recent Maisons du Monde history is the launch of our creative marketplace. The importance of the marketplace model is no longer in doubt during the pandemic, it outgrew any other. And looking at other continents, dynamic is expected to last. So the question is no longer whether a marketplace is a good idea or not, the question is whether you are strong enough to stand on your own feet and be the one that consolidates all these offerings or whether you need someone more powerful to get distributed. We and Maisons du Monde made a clear choice from the outset, based on our broad but creative positioning, the size and quality of our audience and the trust and attachment our brand enjoys among consumers, we had what it takes to become the one-stop shop an inspirational and affordable home and living. So we did. And this strategy has a number of clear and lasting benefits. It contributes to omnichannel sales growth. It increases brand visibility and profile in our different markets. It provides ample feedback on what products consumers like and don't like so that we can reinforce our own offering. Last but not least, it is accretive on margins. However, it does call for a clear strategy to make sure it is a positive addition both regarding our brand and also the performance of our own collections. In our case, these mean 4 things: one, adopting a broad but highly created approach with approval and product level alongside the strict checklist; two, bringing additional offering across all home categories, including our key existing ones; three, a strict monitoring of the user experience with high standards, both in browsing and filtering capabilities and also, of course, in customer service; and four, a continuous test in an approach to optimize each product family over time. So here we are celebrating our first anniversary. Our 85,000 products cover all our categories, and customer satisfaction on our marketplace orders is just excellent. We are also pleased with our 300 vendors of whom we have retained over 95%. Most of the very few that we deactivated were just victims of their own success. With customer orders piling up, they were not meeting our customer service standards. In such cases, we are actively working with our vendors to find solutions and bring them back to our website. We very much see our vendors as partners, and that's one thing they say they particularly like about us. On the sales side, our market base drove over 20% of our French GMV over the first 9 months of the year. And it is about to become the revenue stream for our store network also. Its deployment started last month in 70 French stores where our sales associates are promoting our marketplace actively. We are very enthusiastic about this initiative, and the fact that it is not an online-only element of the proposition, but again, a truly omnichannel feature. Omnichannel is our [indiscernible]. You've got it by now. And stores are clearly a cornerstone of this model. Stores have a number of intangible roles that are hard to quantify yet are absolutely essential. They are a materialization of the brand universe and as such, strongly contribute to brand discovery and attachment. Also, as we saw earlier, stores have no match when it comes to impulse purchases. But just as importantly, stores are a key enabler of digital performance. In fact, they see it at the very core of our ecosystem by enabling several efficiencies in terms of logistics and marketing. Logistics-wise, the efficiencies we achieved through stores are truly a win-win situation. As we saw earlier, our total digital sales, including online and click-in-store, stand at over 50% of group revenues. Well, of all our digital orders, [indiscernible] are delivered in store. And perhaps more impressively, over 20% of our furniture and digital orders are delivered to our stores for customer pickup. And this drives real savings in delivery costs both for our customers, store delivery is free of charge for them, and of course, for us. Furthermore, our store network makes our marketing more efficient and more powerful. When it comes to customer acquisition, store still drive the majority of our new customer inflow. Over 60% of our new registered customers came to the brand through our stores over the first 9 months of this year. In addition, stores are key for customer loyalty. In fact, we get 50% more repeat business from customers who acquire installs compared to those who acquire online. Again, decoration is more of a repeat purchase compared to furniture and stores are particularly strong in that category. In order to maximize the value of our omnichannel model, we have been actively managing our store network. We've been decelerating on gross openings, further raising our standards to ensure that we are opening with high enough long-term potential and that we are not cannibalizing our existing network. We have also been accelerating on-store closures and repositionings, improving the overall profitability of our network. At the same time, we have been accelerating on store refurbishments to ensure our stores are up to date and appropriately exemplify the brand experience. As a result, our store network has never been stronger with 350 stores across Europe at the end of September and an average store size of 1,200 square meters. As one would expect, retail park stores are bigger than city center or shopping mall stores, and thus allow us to display a part of our furniture offering in fully furnished rooms. As a decoration and furniture brand, it is important for us that our stores show our entire universe. And this is also a key ask from our customers. Also store economics are better in mutual parts, thanks to substantially lower rent. So over time, we've been slightly increasing our share of retail park stores with that format now approaching 70% of our total network. Now it is also important to make our brand visible in city centers and shopping malls, especially in countries where our brand awareness is lower, like in Germany. This smaller format represent about 30% of our network today and equally contribute to our omnichannel model. Tomorrow, our goal is to further enhance our omnichannel performance, and further increase our share of omnichannel customers, which has almost doubled already over the last 5 years with an acceleration in 2020. It is well-known that omnichannel offerings increase sales, and we are no different. At Maisons du Monde, omnichannel customers generate 2 to 4x more revenue than single channel customers, and this positive gap has been expanding over the last few years. So how do we plan to increase the omnichannel customer value? By strengthening each element of the equation and by reinforcing the links between channels. Let's look at this in more detail. First, regarding online. We will sustain our efforts in performance marketing and implement smart marketing automation to optimize returns on investments. We will offer new services to customers, such as product ratings and customer reviews that we've already mentioned. All visual search tools to help them find their dream products more quickly and more intuitively. Our branding strategy should also drive more organic traffic, which is a key driver of profitable growth. And finally, our marketplace will continue to contribute to online sales growth. Now regarding stores, we will continue our refurbishing efforts to make sure our store portfolio is up to date. We will offer an enhanced in-store experience through data supported store layout optimization and additional vendor coaching. To that end, we will deploy a mobile-based salesforce trading program next year. We will also roll out digital tax for customers so that they can access product information in a seamless way via the mobile. Lastly, our marketplace will trigger additional revenues for our stores as it will be logically included in click install sales. In addition, we will reinforce the virtuous omnichannel loop through 2 key initiatives: First, we will be deploying a consolidated ID ordering platform across online and stores. In practice, this will allow sales associates to initiate an online basket in-store for final purchase by the customer back at home. And second, we will review our KPI and incentive system so that our store teams are adequately rewarded for their role in the customer journey, even when the sales take place online at a later time. Let's come back to our marketplace for a minute so that we can share with you how we see our way ahead. We will be pursuing its development in 2 directions. First, we will enrich the proposition further. This means 3 things: one, adding vendors and categories to complement our own offering in the most efficient and profitable way; two, enhancing the visibility of our marketplace using the data we've collected for better search engine optimization and also through thematic campaigns on the website, mixing Maisons du Monde and marketplace products for a fully integrated user experience; and three, increasing our sales per vendor through enhanced reach and efficiency, helping them stand out through filters and batches, bringing them advanced analytics and helping them improve their offering. Second, we will fully deploy our omnichannel and international model. We will bring marketplace offerings to our stores, first on our sales team's tablets and later via select showrooming. Marketplace will also be rolled out across Europe with 5 countries in total over the plan, France and also Spain, Italy, Germany and Belgium. As we do so, we will reinforce the distinctiveness of Maisons du Monde's value proposition to marketplace vendors as we will offer an online and off-line Pan-European platform with a uniquely large and high-quality audience of Deco funds. Another key ingredient to our successful omnichannel strategy is the active management of our store portfolio. Over the next 4 years, we will open stores at an average rate of 15 to 25 stores a year, which is a bit less than the 25 to 30 stores rate we had over the pre-COVID period. Indeed, we are again raising our sales further in terms of area potential and expected net contribution to total omnichannel sales. We will continue to close those at a rate similar to that of the very recent years, that is 10 to 15 a year, mainly through our usual repositioning logic that is closing old and small stores in less dynamic areas to open bigger stores with higher traffic potential typically in retail parks a few miles away. About half of our closures over the plan will be in France. All in all, that will result in 5 to 15 net openings per year and a total of 30 to 50 net openings over the 4-year period. By geography, that will mean a net addition of up to 10 stores in France as most repositioning moves will take place in that country, and one closure followed by one opening will be equivalent to 0 net opening. Outside France, net addition will be higher with new country opening plan, proving particularly dynamic. To complement these store openings, we will be testing the commission-based affiliation model in 2023. Affiliation is better suited than franchise to our branded concept as it allows Maisons du Monde to remain in control of store experience, product assortments and pricing. This is integrated model. when the partner covers the CapEx, while Maisons du Monde keeps the inventory ownership. We believe this model could be an interesting addition to our own store network, particularly in France, as it could allow us to open in less dense areas where we would not go by ourselves. Now this is a task, and we do not embed it in our financial base case. Our brand being so valuable, we will take the time we need to make sure it is a good option and how to best go about it. Let's now talk about international expansion, another key pillar of our distinctive business model. And first, let's look at some numbers. As you can see on this slide, international sales have nearly doubled in revenue size since 2016 despite substantial COVID-related store closures over the last 2 years. All countries have progressed, with countries such as Switzerland, Germany and Spain, showing outstanding growth. Germany has thus become our third nondomestic market after Italy and Spain. It is also a solid first in the online segment. One of the reasons we have been able to grow so quickly in Europe is that we have a very agile omnichannel model. Specifically, we can adapt our mix between online and offline depending on each country's pace of growth and digital shift. For example, this year, as much as 1/3 of our sales will be made online in Spain, a country with a historical digitalization rate comparable to Italy. We can also be flexible in terms of store concept. While our typical model is a retail park store, as we've explained earlier, we can and we have opened smaller stores in higher-traffic locations, such as city centers, like in Madrid or Hamburg, or shopping malls like in Vienna. In countries where brand awareness is lower, these stores help create visibility and consumer trust. They also support the development of online sales through the free in-store delivery service they offer. Germany is, for us, a good example of our agile, yet disciplined approach. Indeed, agility is best served when it comes with discipline. Agility means testing and learning, and discipline means consistently translating lesson learned into usable playbook. In Germany, we opened a first set of 7 stores in our first 2 years of operations to try out various combination until we understood the winning recipe. Our following openings followed a specific playbook with an omnichannel logic. So from 2019, we have been opening our stores very selectively, favoring city centers where online sales were strong already like Berlin, Cologne, Hamburg or Frankfurt are areas with established and complementary financial players to benefit from natural high working traffic like in Dresden. In parallel, we kept actively developing our online presence in sales and online was, as you can see at the bottom of the slide, a key growth driver, especially through the pandemic. As a result, country sales have been developing at a great pace even. Between 2018 and 2021, country sales growth has been well above European average, despite a total of 8 months of store closures over the 2 years in that country. These shows how unique our omnichannel model is. We plan to continue our agile, yet disciplined approach to international expansion as it proved effective over the years. This leads us to be very pragmatic and take clear and fact-based decisions. This is how we decided to post our development in the U.S. Indeed, we realized that despite some early success, the level of investment was high to win in that market, and we saw better value creation opportunities in our existing countries. So to maximize shareholder return, the best move was to refocus on Europe. Today, this logic drives us to expand our omnichannel model in each of our core markets, once again, adapting to local specificities. As we mentioned, Spain is experiencing a sharp acceleration in e-commerce penetration following the COVID pandemic. And we are actively riding that wave, reallocating marketing spend to that country. In the meantime, the digital shift in Italy has been more modest so far. Therefore, we are there focusing more on driving traffic to stores through online. These trade-offs are easy to make in our centralized organization, which gives us extreme responsiveness in marketing spend allocation and more broadly, optimization across countries. In addition, we will be implementing the virtuous omnichannel cycle in markets we have previously tested online. This is how we came to open our first store in Portugal in 2018 and our first store in Austria in 2021, following years of online activity. So I've told you about our strong omni-channel model in which online and offline generally reinforced each other, and we just discussed how we are applying the experience we've gained so far to move forward on healthy Pan-European growth. Now I want to talk to you about sustainability and how it is integral to our business model, just like it's embedded in our brand. And to launch this spot, let's watch a video. [Presentation]

Maisons du Monde has been engaging in sustainability for over a decade, long before it became a thing. As a home furnishing company, our first efforts concern sustainable wood sourcing and also because this was one of the first ecological labels to gain currency. In 2016, we launched our first company-wide CSR plan, which included an ambitious program to reduce our energy consumption. And I'm proud to say that over 95% of our stores are now powered by green energy, vastly reducing our energy-linked carbon footprint. In 2019, we raised our ambitions by adhering to the SBTI, or science-based target initiative, a worldwide corporate action framework that came out of the Paris agreement on climate change. This led us to set ourselves a bold 2030 trajectory on carbon reduction with quantified targets and milestones. In 2020, we made of us push for nearshore sourcing with over half of our sofas now made in France. And in 2021, we launched our first OEcotex-certified textile offering granting sustainable manufacturing. We take sustainability very seriously, and we apply the same discipline in this area that we apply to running our business. Let me give you a little more detail on exactly what that means. We were among the first nonfood retailers and still among the few in our category to run a scope 3 analysis of our carbon footprint. As a reminder, scope 3 means analyzing the entire value chain to fully assess our direct and indirect impact on the environment. As you probably know, this is quite challenging and not many companies are doing it yet, given all that it requires in terms of traceability and accountability. As a result of our analysis and to fit with the SBTI 2030 trajectory, we have set ourselves the goal to reduce our carbon intensity by 25% by 2025 across scopes 1, 2 and 3. We will do this by acting on the 5 highest sources of emissions, namely; one, products, improving what they are made of and how they are manufactured; two, customer travel to stores by increasing the share of online in sales and by relocating our stores in higher traffic areas; three, transportation, optimizing footprint from factory to end customers; four, product end-of-life management, reducing waste and ensuring recyclability; and five, finally, energy footprint reduction through more reasonable consumption and the use of renewable energy. To illustrate the complexity involved, let me linger on transportation for a minute. It is interesting to note that this source of emissions accounts for only 8% of our total footprint, and that includes the last mile travel from a warehouse to users home for online orders. It is also hard to reduce with current technology. Indeed, 1 tonne transported on a truck from Warsaw to Paris had the same carbon footprint as 1 tonne transported on the boat from Shanghai to Marseille. So nearshore sourcing has a limited impact on transportation-related carbon footprint reduction. In some cases, however, it may come with greener manufacturing techniques or better social conditions for workers. These are all characteristics we carefully analyze for each product category to design a truly impactful road map, which we will be reporting on every year. The ambitious and disciplined approach we take to ESG explains why we are broadly recognized as best-in-class in our category, with excellent extra financial ratings. And these rankings are consistent across agencies, whether you look at MSCI, where we are #1 in the home sector, or sustained analytics and video areas, where we are among the top 5%. While 2021 marks another milestone in our ESG ambition with our just announced company purpose or [indiscernible]. After 18 months of work with our colleagues and external stakeholders we are proud to share it with you today, inspiring everyone to open up to the world so that we create unique, heartful and sustainable places together. Each word has been translated into company-wide road maps to make sure we align our entire strategic agenda along that company purpose. Of course, sustainability is a foundation of this vision. This is why we are taking extra steps on environmental, social and governance matters. On the environmental side, in line with our company goal of reducing carbon intensity across our overall footprints, we are planning to reach carbon neutrality across scopes 1 and 2 as of next year. Last but not least, we want to be at the forefront of secular economy in our category. Here, we have several initiatives underway. Last year, we started training our style and product teams so that product design can favor recyclability at the end of product life. This year, we opened our own repair and reconditioning units at our warehouses in Marseille. This new unit consists of 40 people, including cabinetmakers, painters and carpenters. It has achieved great results already in its first year with 20,000 products repair and 30,000 repackaged. Even more exciting, we have just started our second life program to offer our products to customers secondhand. We are aiming for this solution to be live by the start of 2023. On the equally important social site, we are also taking additional steps. First, the well-being and engagement of our employees remains our key priority. This year, we have implemented permanent work-from-home routines to drive high employee engagement. In 2022, we will roll out our personalized mentoring and training programs with one-to-one professional coaching and modular mobile-based learning so that our employees can keep growing and increasing our skill sets. We also want to take an active role in society. Of course, we want to offer equal opportunities for women. We are proud of our gender equality index of 83 out of 100, and we have just been nominated in the top 5 of the SPF 120 for women in leadership positions for the second year running. But we also want to give a hand to young people, especially those from diverse communities. We are making commitments to promote greater diversity in our workforce, and we have just embarked on a company-wide mentoring program for our colleagues to reach out to underprivileged youth. And finally, governance. Our suppliers are our first partners, and we have launched an initiative to consolidate our supplier portfolio so that we can coach them better over time. In parallel, we have reinforced our source auditing capabilities, with 150 audits this year that is 5x more than 5 years ago. To further strengthen our supplier governance, we are planning to relocate a share of our manufacturing in Europe in the coming years. We are in the process of defining our sourcing road map at product family level to strike the right balance between cost, manufacturing know-how and sustainability. Like I said before, relocation to Europe may lower risks when it comes to workers' social conditions as European regulations are structured in that regard compared to most Asian countries. Also, consumers now value made in Europe products more, so it makes sense for us to consider increasing the share of nearshore sourcing for certain categories. However, Maisons du Monde is also about [indiscernible] wood and handcrafting techniques, some of which cannot be found in Europe. So balance is the name of the game. In addition, we are raising our standards in terms of traceability. This year, we launched a structured approach to product traceability. And in our first year, we've managed to trace over 80% of our products at factory level. Finally, we are aligning interest of our teams to those of our shareholders by embedding free cash flow and also CSR targets in the short-term or long-term incentives of our managers. These 3 ESG dimensions are all equally important and contribute to making us a brand people are happy to buy from and work for. So before I hand over to Regis for our financial segment, let me just recap what we've gone through. Our business model is fit for purpose and set to deliver profitable growth. Our flexible omnichannel approach is unique by its strong online and off-line synergies and especially suited to expansion across Europe. No less important, we are driven by a determination to reconcile performance and sustainability. And to this sense, we are aiming to reinforce our leadership on CSR matters. The 3 drivers will keep strengthening our business model, which delivers high and sustainable growth. So without further ado, Regis, the floor is yours.

Thank you, Julie. Now let's look at what is specific to Maisons du Monde's financial model, reviewing our performance since 2016 with key metrics that explain Maisons du Monde's model, which aims to deliver increasing shareholder returns. There are 3 pillars I would like to cover. Looking at our past performance with the benefit of hindsight. The first one is about growth. Maisons du Monde's story is growth and more specifically, it's a story about the development of our omnichannel model; second, I will cover profitability, which is at the center of our financial equation; and third, I will review cash generation, another key metric that is essential for returning value to shareholders. Starting with growth, I propose that we address its different components, looking closely at our omnichannel model, reviewing our international expansion and covering our innovative new adjacent revenue streams. Before we get into each of these components, I think it's important to set the scene by looking at where we stand today. Our business is now around EUR 1.3 billion in sales compared to less than EUR 1 billion in 2016. It is around 50% growth over the last 5 years, equivalent to a strong compound annual growth rate of around 8% per year. We have continually demonstrated our capacity to grow at a high rate. In particular, when you consider that our business was hit by the pandemic recently. Even at the height of the pandemic, we delivered the equivalent of a high single-digit CAGR over 2 years, our 16% growth in the first 9 months of 2021, which illustrates the resilience of our business model during a challenging period. This track record of high growth was made possible thanks to 2 specific drivers, digital and stores. So first, let's talk about e-commerce, which contributed 36% of sales in the first 9 months of the year. Our online sales have more than doubled in 5 years. This is equivalent to a CAGR circa 20%. How did you achieve this? First, our online traffic is 3x what it was in 2016, and we have increased our conversion rate by 35%. Another interesting element is that this growth is very strong in the international part of our activity, with 53% of web now outside of France. We have also successfully multiplied our online customers by 2.5x to 1.7 million. Importantly, I would like as well to highlight that 60% of our online sales are now repeat business up from only 1/3 in 2016. Finally, as Julie mentioned, our curated marketplace is off to a great start with EUR 50 million GMV over the first 9 months of the year, which is above 20% of our French online GMV. Let's now move to the other growth driver I mentioned, store performance. This graph shows how sustainable our performance has been since 2016. Again, despite the ups and down due to COVID, we were nevertheless able to deliver a store CAGR of 3.5%. If we were to adjust from COVID effect, this CAGR would be above 4%. So let's examine a few of these KPIs that highlight our store performance. My first example is sales per square meter, an interesting metric, which adjusted for COVID, increased 3% over the period. The second one is the performance of recently opened stores versus earlier openings. Taking the average sales contribution of each store at opening year plus 1, stores opened recently delivered 5% higher first year performance compared to stores opened 5 years ago. This illustrates how disciplined we are in choosing new locations that maximize sales and in our attention to return on capital employed when allocating CapEx. Again, as Julie already said, stores are a key component of our growth and also an area where we are leveraging our data capabilities very effectively. Our discussion of sales performance would be incomplete without talking about our international performance and the way we have successfully expanded our business beyond France. Looking at this graph, international aggregate CAGR has been above 15% since 2016. Notice how this growth is balanced between our established countries namely Italy, Spain, Belgium, Luxembourg and our new markets, which delivered over 25% CAGR in the last 5 years, including 2 new countries we opened since 2019, Portugal and Australia. The second thing worth noting is that our international growth is very strong across both channels with an even higher acceleration online, as I shared before. All in all, Maisons du Monde's omnichannel model is very well-adapted to expanded in other European countries, where we see a clear path towards developing our footprint. With Julie, we will tell you more in the final section of this presentation about what this means for our road map towards 2025. Next, let's revisit our growth in terms of categories. Maisons du Monde has a very broad multi-style offering that is built around furniture and decoration, categories that complement each other. Both categories are growing fast. Decoration and furniture have similar growth rates, high single digit. It was feasible, thanks to two different elements. First, revitalization of our decoration collections and a powerful in-house creation team; second, the extension of our furniture product range; and third, through the development of larger stores and facilitating online furniture sales. The recent performance of our door in 2021 that we commented this year is a perfect example of the strength of our portfolio with growth low to mid-teens this year. Globally, our omnichannel model benefits both categories and vice versa. Historically, store networks and more home decoration sales, conversely, online and more furniture sales. But thanks to the seamless integration of our omnichannel strategy, both categories are growing across channels. A strong omnichannel model, combined with a balanced and diversified portfolio is key to creating more value. To complete our sales overview, let's update on our new activities. These adjacent businesses may still be on, but they play an important role in our pan-European omnichannel model. Our B2B activity will be around EUR 40 million at year-end, very close to 2019 performance. That's 4x what it was in 2016. B2B had a strong momentum until the pandemic outbreak, from EUR 11 million in 2016 to EUR 40 million in 2019 with the launch of web channel in 2018. Now most verticals, namely hotels, restaurants, office spaces, durably suffered from the pandemic with hotels and restaurants closed a large part of 2020 year and office spaces being reassessed by companies in the light of development of work from home practices. Demand has progressively resumed over the last few months with B2B players still being cautious in this recovery phase. Having recovered in 2021, the level of 2019 is already a very positive rebound. The underlying business is still very promising. We expect demand to keep gaining momentum as shown in our numbers over the last 6 months, plus 12% versus 2020. Furthermore, the profile of our B2B activity is better by the year with growth driven more and more by online, which now accounts for 55% of sales versus a level below 50 in 2018. Our offering is also increasingly successful outside of France, with rest of Europe now representing 45% of B2B sales. We are resolute in developing this segment further, which we see as a valuable component of our branded ecosystem. Our image among end customers strongly contributes to our appeal to B2B customers and our B2B achievements. Like the 3 hotels, we have fully decorated, sets us further apart from other B2C players and reinforces our brand. Not to mention, the segment is accretive on margin. Now because demand is hard to predict on the post-COVID environment, we prefer to be cautious in our sales estimates. One could, therefore, use this as an upside to our core plan. Last, let's update on Rhinov, an activity that has doubled since 2019. Rhinov is proving an effective way for us to connect with customers, both online and in stores. It offers an innovative solution that vertically integrating from initial concept to choice of products. One interesting KPI on Rhinov. 50% of our service sales turn into product sales with an average basket equivalent to 3.5x our average basket from other customer journeys. Rhinov still has high growth potential and is another relevant component of our omnichannel value proposition. After our discussion of sales, our next section is about profitability. Maisons du Monde is not just about growth, but more importantly, growth at a high level of profitability. I would like now to review 3 key features of our profitability: gross margin, operational efficiency, and finally, how we invest to fuel growth. Gross margin. I think it's fair to say that our gross margin is not that of a classic retailer, but more comparable to a well-established brand. We have maintained a gross margin of about 66% since 2016. This is high sustained level and a very good overall performance. This puts us 20 points above the median of our peers, which illustrates Maisons du Monde's superior business model as a loved brand. The second feature of our profitability, operational efficiency. First, on logistics. This is an area where we keep rationalizing costs year after year. Two data points I think are interesting to share. Since 2016, our warehousing cost per unit manipulated in our warehouse have decreased by 4%, thanks to densification of our operations and lean programs. On transportation, despite inflation, the development of our international network and the acceleration of direct-to-consumer delivery, we have been successful in maintaining a flat ratio of transport to sales. On stores, total SG&A ratio is overall stable, despite inflation and higher costs in new countries where we recently expanded our network such as Germany. Looking at our store network, we continue to manage our spending with discipline. I'm proud to report that we have decreased our network operating cost per square meter by roughly 10% on a like-for-like basis versus 2016. Lastly, operational efficiency is also about the way we invest to support growth. Our total SG&A ratio, for example, for web, excluding marketing specific spending, is down almost 1 point, thanks to sales growth and centralized operations. And before we get into the details of what investment for growth could mean, I'm happy to report that our returns on online investments have nearly doubled since 2016. On all levers, we are constantly managing our model to maximize the profitability behind growth as our recent guidance of they chose. This is essential. Our focus behind growth to seek for further efficiencies in the way we execute our agenda is critical to fuel a virtual cycle of investment. This is a perfect transition to talk about investment and where we are taking Maisons du Monde going forward. To preserve our future growth capacity, it's essential to be able to increase investments in our model. The first investment focus is marketing. Looking on the left-hand side of the slide here, our marketing spending to sales ratio is more than 100 basis points higher than in 2016. Recently, we have boosted our online investment toward the launch of our marketplace, money well spent, as you already know. And we have also been accelerating investment in our brand. Finally, CapEx, which are naturally investment for future growth. There are 2 important elements you can see on the right-hand side of the slide. One is that our CapEx has increased over the period, approaching EUR 60 million to EUR 70 million every year. And at the same time, our CapEx to sales ratio that has been decreasing, reflecting both our growth in agenda and our highly demanding approach to selecting growth projects, whether they relate to store openings and maintenance, 60% of our current CapEx; logistics 15% of CapEx or more structural investment just sales IT, another 15% of the total, an area where we've been increasing our spending over the last 3 years. Combining all these elements from the structure of profitability to management of our resources, Maisons du Monde is very well-equipped to keep nurturing profitable growth. We are a growth company, with the potential to grow at a strong pace, but this cannot be growth at all costs without regard for profitability. I think it's now time to pause and explain what we do. The resilience and sustainability of our model depend on constantly maintaining a balance between our growth rate and our profitability. Depending on the context, we must maintain the agility either to seek acceleration or at times to adjust the pace of growth to preserve our profitability equation. This is exactly the way we are currently driving the last part of 2021, as we commented during our 9-month performance call. How do we do this? We have 3 main avenues for optimizing this balance to keep growing and ensure the right level of profitability for Maisons du Monde. First, it's about strengthening the growth model around developing the brand, it's omnichannelity, if you will, it's pan-European scope as well as prioritizing the sustainability-driven initiatives. The second element is to keep enhancing operational excellence in every area. And finally, remaining very disciplined in the way we allocate our resources. All of these factors contribute to a strong and sustainable balance between growth and profitability. Now that we have looked at the model that we aim to implement for the long run, I propose that we overview how that balance seeking approach flows through our P&L. Here is how it will translate into our 2025 profitability profile. Gross margin, it should remain stable. As the combined results of first external headwinds, sits right with a major effect in 2022 and raw material cost increases, strategic investments to further enhance product quality and sustainability. And on the contrary, margin protection initiatives, including supplier and product mix management or pricing optimization. Net margin should slightly improve, despite online and international gaining higher share in the sales mix. Indeed, our resolute action to drive operational efficiencies at logistics and transportation levels, partly enabled by our new semi-automated warehouse, combined with the deployment of our marketplace in 5 countries by 2025, will have a net positive effect. Like I said, our priority is to fuel profitable growth and smart marketing investments are a key part of this agenda. We will increase our performance marketing budget to support online growth and we will also materially increase our branding investments so that our brand awareness and brand profile both develop, especially outside France. This will increase our marketing ratio from 5% of sales in the last 12 months to somewhere between 6% and 8% in 2025. Coming to other SG&A. Here again, we keep in sight the necessary balance between cost optimization and midterm growth. We will sustain our cost discipline to drive operating leverage. Meanwhile, we will further strengthen our organization, recruiting new talents and implementing new tools so that we can grow at scale while maintaining high level of efficiency and staff engagement. In addition, we will also invest in new initiatives to support our sales expansion. For instance, our new brand and CSR department will work on enhancing our store concept and developing brand content across Europe. We will invest in the secondhand program Julie just mentioned and recruit experts to develop our sustainable raw material sourcing. Innovation is a key enabler of our growth story, and we want to safeguard financial capacity to try new things, test, learn and ultimately succeed. All in all, SG&A ratio on sales, including the extra effort on marketing, will decrease over the period of the plan. As far as CapEx is concerned, investment will grow in value but decrease as a percentage of sales. As Julie described in the previous section, we'll keep opening a material number of stores every year but less than the average of the past years. So as our sales grow, we will get leverage. This part of CapEx should go slightly below 50% of total CapEx. Logistics investments will be higher by 2023 as our new warehouse ramps up and should decrease after. As a consequence, our logistics investment ratio should go down from 15% today to half of this in 2025. Finally, our IT and data investments will go up both in value and in ratio to further digitalize the company, including new tools and systems for finance and HR, to guarantee that Maisons du Monde is fit to take on its ambitious growth agenda. The HQ overall CapEx may double to circa 30% of the total by 2025. Having discussed our model of profitable growth, I want to conclude this section explaining how it translate into cash generation and what we do with our cash. The model I've just described is naturally cash-generative. And if you look back as far as 2016, we have turned out profitable growth into a NOPAT that is consistently around EUR 75 million to EUR 80 million on average and very likely higher this year. As we saw a moment ago, our disciplined approach to spending results in a constantly optimized CapEx allocation. And lastly, we are maintaining our efforts to improve working capital. On this topic, you can see on the slide how volatile inventory management has been and can be. Obviously, this is a key focus to support our business as well as cash generation. Normalizing the situation is an essential priority at the moment. These 3 main cash flow drivers underpin our model and combine to structurally deliver high free cash flow. On this slide, we can see this performance over the last 5 years with cumulative free cash flow of over EUR 300 million. This cash has allowed us to almost fully deleverage the company for a net debt ratio very close to 0 today. The growth agenda I've described is therefore self-funded, demonstrating that we possess all the levers to fuel and manage our future growth. I think it's important at this moment in time to acknowledge that this cash generation has allowed us to deliver a very good return to shareholders. As you see on the left, our dividend grew consistently pre-COVID with a payout ratio of 30% to 40%, one of the highest amongst our peers. This regular distribution of value to shareholders, which remains our central lever for returning value, has been recently combined with the announcement of our first ESG share buyback program in the amount of EUR 50 million, which benefited from increase of our 2021 outlook as well as proceeds expected from the sale of Modani. To conclude, let me briefly summarize the key points I'd like you to remember. Maisons du Monde is all about the capability to grow at a high pace, to grow in a profitable way from an already high level of profitability and to place this in the service of a self-funded growth model with a strong capacity to generate cash every year. This model provides the framework for delivering strong and increasing shareholder returns. Thank you. I now hand back to Julie.

Thank you, Regis. So we've told you about the strength of our brand, our business model and our financial profile. Now I'd like to take a step back and show you how they fit together going forward in our outlook. We have a clear path to create sustainable value for our shareholders. This comes in 3 parts: growth, profitability and cash generation. First, growth. We have explained in previous sections how we are planning to grow, reinforce brand awareness and leadership around creativity, inspiration and engagement, a digital-led omnichannel model strengthened by our curated marketplace and agile yet disciplined international expansion with a focus on Europe. So how will that materialize in financials? Channel-wise, you can see here that growth will be broadly balanced between online and stores, driving a total revenue number of EUR 1.8 billion to EUR 1.9 billion in 2025. In gross merchandise value terms, revenue should exceed EUR 2 billion by that year. That is an over 50% increase versus 2021 or 10%-plus CAGR over the period. Adjacent avenues, namely B2B and Rhinov, will make a limited contribution to sales growth in the near future for the reasons Regis has just described in the previous section, that is progressive ramp-up of the underlying demand. That said, we continue to see them as highly valuable add-ons that reinforce our core model. Over the 4-year period, this ambition translates into a high single-digit sales growth CAGR at group level. If we now turn to our geographical split. Here again, growth will be balanced between France and the rest of Europe. Focusing on the rest of Europe, about 30% of total growth will come from our established markets, namely, as Regis mentioned, Italy, Spain, Belgium and Luxembourg, and 20% will come from our new markets, which are Germany, Switzerland, the Netherlands, the U.K., Austria and Portugal. So we are looking at a model in which our countries outside France make a strong contribution to our future growth. As a result, here is what Maisons du Monde's profile should look like in 2025. Online should account for 40% of total sales. While digital, that is online plus click-in-store, should represent over 60% of total. And international, meaning the rest of Europe, will represent 48% to 50% of the group sales from the 45% today. So yes, Maisons du Monde is a growth story, but not just that. We, by no means, are pushing a strategy of growth for the sake of growth. What we want is profitable growth and sustainable value creation. And that requires discipline and action at every level of the company to achieve. So let's talk about how this would translate into profitability. As you've heard over the course of the presentation, we have a strong and varied toolkit for enhancing profitability, not just when it comes to our growth ahead, but our current operations as well. As a result of this increasingly disciplined approach to secure the right balance between growth and margins, we expect to approach the EUR 200 million EBIT bar by 2025. That is an EBIT margin around 11%. As you can see on this slide, we also expect to deliver cumulative free cash flow of over EUR 350 million over the next 4 years through 3 main drivers: one, leveraging our profitable growth model and low level of debt; two, driving CapEx with strict discipline; and three, optimizing our working capital level. And this really matters for 2 reasons. First one, as Regis said earlier, it is obviously crucial to fuel our future organic growth, which remains our first objective when considering use of cash. The first period of the plan will be as well important to rebuild inventories and to further strengthen our organization, as Regis explained, so it is well equipped to fully capture the opportunities of our growth agenda in the long run. In the midterm, cash may allow us to also possibly explore and develop new growth avenues as we see fit. Second reason is that cash allows us to reward our shareholders. We have a history of industry-leading returns, and we intend to maintain our payout ratio between 30% and 40% in the years ahead. So before we move on to Q&A, where Regis and I will answer your questions, let me leave you with a recap of our midterm guidance. Sales should achieve a CAGR in the high single digits over the 4-year period, with sales reaching EUR 1.8 billion to EUR 1.9 billion in 2025 and gross merchandise value exceeding EUR 2 billion by that year. Our EBIT rate should reach around 11% in 2025, which comes out to an extra 150 to 200 basis points over our just upgraded guidance for 2021. Cumulative free cash flow is expected to reach EUR 350 million over the period with a target of EUR 100 million for the year 2025. In addition, as I just said, we will maintain our payout ratio between 30% and 40%. Lastly, our guidance will be incomplete without ESG targets. On that front, we plan to become carbon neutral in 2022 of scopes 1 and 2 and to reduce our carbon intensity by 25% across scopes 1, 2 and 3 by 2025. We will also double our share of products meeting sustainability criteria to reach 40% of our total offering by the end of the plan. To conclude, I hope we have convinced you today that Maisons du Monde is well positioned to remain the European leader in affordable and inspirational home and living through the most desirable and sustainable home and living brands and a distinctive model that creates sustainable value for all our stakeholders while continuing to deliver high growth. Thank you for your attention.

Thank you all.

And for our Q&A segment, Chris Welton of Investor Relations will be coordinating the questions you've submitted via the chat as well as those on conference call. If you haven't sent us your questions yet, please feel free to do so now. Chris, hello, I think you have the first question.

Thank you, Julie. [Operator Instructions] Now let's see if we have a first question. We do. So the first question is, your online is already 36% of your total sales. You plan to grow that to 40% over the next 4 years. Does that mean that your online penetration is slowing down?

Thank you, Chris. So that's right. Our online reached 36% of our year-to-date sales, which is indeed a very high number. Now as you know, our Q4 is geared towards decoration and store sales. So usually, out of the full year sales, we usually lose 2 to 3 points in terms of mix. So we could expect that this year, online should account for approximately 1/3, 33% of total sales. That will be for 2021. So if you take that as a starting point, reaching 40% in 2025, that is in 4 years' time, approximately equals to a 2-point share gain over the period, which is broadly similar to what we've achieved over the last years, which is a very bold ambition. Any other question, Chris?

Yes, we have another question. This one on the marketplace. The question is, you're already at 21% of your online sales, and you tell us that you plan to be at 25% by 2025. Can you please explain to us the journey on the specific revenue element in a little bit more detail, please?

Thank you, Chris. So 21% of total of French sales out of the 9 months sales was indeed what we've achieved. As you know, France is about half of the online sales. So if you would take the total scope, that will be around 10% of total GMV out of the 9 months. So again, that is our starting point. Now to go from there to 25% of total group GMV means that we will be implementing our marketplace both in France and in other countries. And by the end of the plan, what we expect is that the marketplace should reach about 30% to 35% of French online GMV. As for the other countries, we expect the marketplace to reach 20% to 25% of the online GMV of those respective markets. And that difference is linked to the fact that we are off to a great start in France. So we will have more time during the plan to increase the penetration rate. And indeed, it is off to a great start this year. And for the other countries, because the market-based model is a little bit less mature, we expect this year to be a little bit smaller. Now we may be positively surprised, as we've been in France, but that's our current expectations.

So we have a third question, and it goes like this, if we have understood correctly, you plan on generating EUR 350 million of free cash flow over the period and maintaining a payout ratio of 30% to 40%. Could you please give us an indication of how you're going to use the free cash flow? How much for dividend? How much for CapEx?

I will take this one. Thank you, Chris, for the question. Three elements I could mention. And first, I will start with the slide that Julie commented in the outlook section which describe 2 phases. One is really the first part of the plan where we're going to replenish our inventories, which is an important element in our immediate journey as well as strengthening our model and investing in our internal tools. I think it's important to have that in mind. Second part of the plan will be really about tuning new revenue streams. I think the second element I would like to mention over the plan is CapEx. As per the question, Chris, you may remember in the presentation, we have mentioned that CapEx should get to a ratio around 5% of sales, which means that globally and it's really important part of the agenda and in our use of cash considering how we have to fuel for growth, probably translating at the end of the plan with a level around EUR 80 million. And back to the other part of the question, indeed, return to shareholder is an important part of our agenda. We mentioned in the guidance today a ratio, 30% to 40%, which is really our ambition to make it really sustainable. And if we translate that for the period '22 to '25 related to the dividend of 2021 to 2024 to be totally correct, I think it's fair to say that the portion of the cash dedicated to dividend will be probably circa EUR 80 million to EUR 100 million.

So we have another written question, and it goes like this. I'm not sure I understood where the 150 to 200 basis point improvement in your EBIT margin is coming from. Could you please go over that again for us?

I take this one as well, Julie, if you're okay. On EBIT, and I think the question is probably in connection with the guidance, which is to increase EBIT 150 to 200 basis points. I think it's fair to consider twofold. One will be EBITDA of probably 50 to 100 basis points. And in EBITDA, having half of this development related to net margin and half on SG&A. On SG&A, and you heard Julie and myself explaining that, while investing and increasing investment on marketing notably, but as well on quality and sustainability. So I think it's an important factor to bear in mind. The second element of development of EBIT will be related to G&A for 50 to 100 basis points roughly on the back of the discipline we put behind CapEx. And I hope you understood that level of discipline we want really to maintain over the resource allocation in general. And secondly is the digitization of the model plus growth, obviously, will create leverage. So that would be my way to summarize the 2 elements that contribute to the development of margin in the guidance.

The next question is on ESG. It is, the company's commitment to ESG initiatives is impressive. Thank you. Would it be possible to explain in more detail how you integrate ESG into your investment decisions?

Thank you, Chris. So as I hope we made it clear during the presentation, CSR is really part of all of our road maps and is core to our decision-making process. And as we want to be truly impactful, we're really specifically focused on those drivers that really generate the highest share of the carbon footprint. So maybe to give concrete examples, let me focus on product. As you could see, that is one driver that will make our company more responsible in that regard. So product, for example, we did several things. Well, first, as you know, we've been resorted to more and more sustainable materials. Let's take wood. So now nearly 70% of our wood products are made with certified recycled wood. And certified wood is substantially more expensive. It's about 10% more expensive. So in a given year, it's about EUR 5 million to EUR 6 million additional spend that we put just to really make sure that we have certified wood for our furniture products. So that's one. Another one regarding organization. We have really reinforced massively our quality and sustainability department within the overall teams. And we are nearly doubling the size of the team. So that means really extra resources, experts in terms of sustainable material sourcing, for example, in terms of really design of the product to make sure that we are going for extra durability. And this team basically will be nearly double the size in 2022 compared to 2018. So that's very concrete investment and obviously impact the way we are doing things. Typically now our quality are much more upstream in the process. We have a very, very rigorous checklist for our suppliers, both on environmental and social criteria. So that's really important. And maybe on another topic, a third example would be on store. As we said, we've been massively reducing our energy footprint at store level, which is the main part of our scopes 1 and 2. And for that, we've been implementing a vast re-lamping program to be able then after to fill with green energy. And that was the equivalent of EUR 5 million to EUR 6 million invested to really reinstall our store network with this new lamping system, which basically allows us to reduce our energy consumption. So very concretely, in each department, we do take CSR as a key part of our decision-making process.

[Operator Instructions] And we have a question on the line from Bryan Garnier.