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

Good day, and thank you for standing by. Welcome to the Maisons du Monde Full Year 2022 Results Call and Webcast. [Operator Instructions] And please note that today's conference is being recorded. I would now like to hand the conference over to Carole Alexandre, Head of IR. Please go ahead.

Thank you. Good morning to all of you, and thank you very much for joining this call to present Maisons du Monde full year 2022 results. I am Carole Alexandre, Head of Investor Relations. I am with our CEO, Julie Walbaum; and our CFO, Regis Massuyeau, who will be making today's presentation. It will be followed by a Q&A session. Francois-Melchior de Poulignac, Deputy CEO, is also with us and will say a few words about his first week at the company. You have no doubt seen the press release we issued this morning. The conference call slides can be downloaded from and viewed on our website, corporate.maisonsdumonde.com. This call is also being audio webcast, and a replay will be available on our website later today. All listeners are reminded to read the forward-looking disclaimer on the Slide 2. I will now turn the call over to Julie Walbaum.

Thank you, Carole. Good morning, everyone. I hope you are all doing well. I am pleased to hold this financial results review with you today for the last time before I hand over to Francois-Melchior de Poulignac in a few days. And before I walk you through our presentation, I'd like to give the mic to Francois-Melchior, so that he can introduce himself and share his first impressions of Maisons du Monde.

Good morning, everyone, and of course, thank you, Julie, for your warm welcome to Maisons du Monde since end January. After these few weeks in the company, I'm sure you are all very eager to hear more about my views on our road map, but I am first going to complete my diagnosis before coming back to you in May with greater clarity on Maisons du Monde's 2023 priorities and road map. What I would like to do today is to briefly introduce myself to you and share with you my first impressions. I've worked 22 years at Carrefour after previous experiences at L'Oreal and at the Boston Consulting Group. At Carrefour, I held a number of positions, both at headquarters and country level. On the functional side, these went from M&A associates to leader of cost reduction or FMCG global initiatives or more recently, Group Executive in charge of merchandise and procurement. On the operational and general management side, I have notably been in charge of Carrefour supermarket business unit in Poland and CEO of Romania and Belgium. In my last position at Carrefour, I was Executive Director in charge of Belgium, Romania and Poland. I'm not saying this to share my resume, but because I feel it gives you a hint of the kind of experiences and know-how I will bring to Maisons du Monde from March the 15th. Now about Maisons du Monde. Julie told you about the company's many strengths, and I can only agree this is what attracted me to the company. I have spent my first few weeks meeting our teams across all our markets in Europe, in stores, in our main distribution center and at headquarters. I was able to appreciate their skills, professionalism, strong commitment to the Group's values [indiscernible] and their determination to deliver the company's business and financial agenda. These first weeks have confirmed my enthusiasm for the company's potential and my confidence that Maisons du Monde has many strong assets on which to build. They notably include its strong omnichannel model, its ability to develop new avenues of growth such as the marketplace or B2B, a brand that has strong recognition and enthusiastic followers on social media, and last but not least, highly engaged teams. Over the next few weeks, I will work with the teams, and I will further listen to our customers to adapt our road map for the year wherever necessary. I very much look forward to our next meeting in May to get a chance to share this and more with you. For now, I will leave you with Julie and Regis to discuss the company's 2022 performance and the current trading. Thank you to all of you for your attention, and I look forward to my future exchanges with you, and I would be happy to answer a few questions in the Q&A.

Thank you, Francois-Melchior. Maisons du Monde is indeed a great company with plenty of assets and also opportunities. And I wish you, again, together with the team's brilliant success in this new chapter. Now back to the agenda. As you see on Slide 4, it will follow the typical sequence. I will begin with an overview of the key business and strategic highlights of last year; Regis will then take you through our numbers and also our 2023 outlook; and we will then open the floor to your questions. So let's begin on Slide 6 with our 2022 business and strategic highlights. Throughout most of last year, we operated, as you know, in a very challenging environment, marked by the ware in Ukraine and soaring inflation across Europe, which naturally impacted consumer confidence and led to sharp deceleration of spending from Q2 onwards. Inflation also massively impacted our cost base with a EUR 90 million impact on EBIT coming from negative externalities, including EUR 65 million for the sole freight component. This means [ 3/4 ] of our 2021 EBIT base was swept away because of inflation. Against this, we implemented a forceful action plan to support sales and also to protect profit and cash. Thanks to this strict discipline, we reached or exceeded our updated financial targets, as I'll detail in next page. On top of managing the cost and cash equation, we continue to advance our strategic agenda, as our vision has always been to create short- and long-term value. So let me highlight a few achievements of the year. On the strategic front, after a successful launch in France, we rolled out our curated marketplace into new markets, Spain and then Italy with very encouraging initial results. We also launched our second distribution center, which is a key step in improving customer experience and also operational efficiency going forward. Finally, we launched our Good is Beautiful CSR brand movement, a series of [ bold ] commitments that put sustainability at the heart of everything we do. On operations, we made new advances in strengthening our brands with the launch of inspiring, high-profile product collaborations and an enhanced ominchannel customer experience. We further ramped up the digitization of our commercial model, notably through the implementation of a new IT omnichannel ordering platform that allows our teams to further drive store to web traffic [ themselves or also ] the launch of our first retail media solutions, a very promising new avenue. We also accelerated our B2B operations with solid growth across our direct and online sales channels and the deployment of our first business corners in our stores. Finally, we made a major step in improving our sales and operations organization, notably through the strong reinforcement of our purchasing and planning capabilities. On the financial side, we were able to contain the erosion of gross margin through forceful negotiations with our suppliers, doing better than our cost-saving initial objective. We have succeeded our SG&A adjustment objectives with strict and continued discipline at all levels of the organization. Finally, in the context of necessary inventory replenishment, we optimize cash generation through active working capital and CapEx management. Maisons du Monde will be continuing this discipline this year with new initiatives that are already underway. So while we do acknowledge that performance in 2022 was below what we initially expected at a time when no one honestly could foresee a war starting in Ukraine and its extensive impact all over the globe, we do want to highlight that the actions we took delivered the [ aims ] on the financial side and have laid the foundations for a stronger business looking forward. On Slide 7, you can see that our financial performance in 2022 was in line with the updated guidance we provided last May. Our sales were down 5.1%, in line with our guidance of a decrease in the mid-single-digit range. It's worth noting that while they were down year-on-year, our full year sales are up 5.1% versus the pre-COVID level in 2019, showing that we emerge strengthened from the crisis. Also in GMV terms, which more accurately reflects our commercial performance, our revenue amounted to EUR 1.377 billion, that is down only 1% year-on-year and up 13% versus 2019. Our EBIT margin at 5.5% was in the higher range of our guidance of 5% or above. Indeed, our EBIT nears EUR 69 million, as we offset about half of the inflation impact of EUR 90 million through our cost containment plans and selective price uplift. And free cash flow of EUR 32 million was above our updated guidance of EUR 10 million to EUR 30 million. Our performance translated into earnings per share of EUR 0.80, and we will propose to our shareholders a dividend of EUR 0.30 per share at our next AGM, which amounts to a payout ratio of 37%. On Slide 8 now, we focus on the key commercial initiatives that strengthened Maisons du Monde as a direct-to-consumer love brand through its 3 pillars: creativity, inspiration and engagement. The creativity of our brand and the quality of our in-house design collections was underscored by a 30% increase in press mentions this year. We also launched our first series of variable and sustainable product collaborations in line with our brand mission. The first was with influencer, Lisa Gachet, renowned for being the founder of the creative and inclusive brand called Make My Lemonade for a collection of decoration products inspired by Memphis movement. We followed this with a new collaboration with Sakina M'Sa, the pioneer of sustainable fashion, who design an exclusive collections of tableware and home products that celebrate exceptional women such as [indiscernible] Frida Kahlo. These collaborations have generated a reach of 5 million users with our community, which is big numbers for [indiscernible]. The profits from the collections have been donated to [indiscernible], an NGO that fight violence against women in accordance with our Good is Beautiful CSR brand movement. Second, inspiration. This year, we opened 16 new suits in the Maisons du Monde Hotel and Suites in Marseille, one of the 3 hotels we have opened in partnership with the Vicartem Group to showcase our collection to business customers. We also carried out an innovative collaboration with the Stade de France to revamp several spaces inside the iconic stadium. We also organized and hosted successful influence events, most notably the 4th annual event on Interior Design trends, which attracted more than 2,000 architects and designers eager to hear our views on home and living. These are all opportunities to raise our brand awareness and profile, while connecting with engaged communities. And finally, engagement. Maisons du Monde's global social media community grew by 5% year-on-year and by 70% versus '19, reaching 8.6 million followers across Europe. The number of videos seen on Instagram and TikTok rose eightfold versus '21, translating into an increasing engagement with our communities and social media with a cumulated reach of over 600 million views. As a result of all this and thanks to our highly committed teams, we are proud that for the sixth consecutive year, Maisons du Monde was recognized, as the second favorite home and living brand in France just after IKEA. On Slide 9, we focus on the success of our B2B business, which has shown appreciable growth in the context of soft consumption across both. On the left-hand side of the Slide, you see how we are structured and how we are generating cross-channel synergies. In addition to a dedicated sales rep team, we are also selling our B2B offering through our web and also our stores. To accelerate B2B growth, we are recruiting more sales agents last year on the ground and also boosted online investment. These 2 channels have shown spectacular growth year-on-year, respectively, of plus 26% and plus 13%. We now want to further boost B2B sales at store level. This is why we opened at the very end of 2022, a first series of 5 business corners in selected French and Italian stores. All in, B2B delivered in 2022, GMV of EUR 73 million, as B2B customers also buy some of our marketplace products. This GMV number is up 6% versus 21% and 9% versus '19. Of the total, EUR 48 million were generated by our business sales rep team and also by the web, and another EUR 25 million were generated in store. We believe B2B is a promising growth avenue, building on a strong value proposition. Indeed, we have a dedicated offering of over 500 products exclusively designed to address business customer needs. We can also offer them a distinctive end-to-end experience from interior design service to all the delivery and assembly. The marketplace is an additional benefit, as it allows us to offer some specific products that our own catalog system have, which increases basket size and profitability. Our MdM Hotels & Suits in partnership with Vicartem Group are a great leading showroom for our B2B products and did boost our hotel's customer base. A great driver to increase B2B sales is to raise awareness of the service. We did that through active presence on PR influence and social media or also high-profile partnership, such as the one with Stade de France. And this is working, as shown by the threefold increase in unaided awareness versus 2019 in our interior designers' segment. Our B2B position is a great asset to Maisons du Monde and a promising growth driver for the Group. On Slide 10 now, we have a look at our industry-leading digital-first ominchannel model. In '22 over half of our sales and 55% of our GMV were digitally driven. Of that total, 29% of Group sales came from online purchases and another 23% were digital sales carried out in store, what we call click-in-store sales for a common share of 52%. Both the share of online and the share of click-in-store are way ahead of our industry, which underlines our capacity to win in an increasingly digital retail economy. Now talking about our customers, our active customer base at 7.2 million people was down 4% year-on-year due to the soft consumption environment, but it was up 4% versus 2019. And our active customer base included 3 million new customers in '22, which shows the capacity of our brown and products to attract new buyers even in a context of constrained purchasing power and heightened competition. Finally, the number of omnichannel customers was up 8% year-on-year and 50% versus 2019. On Slide 11, we zoom in on the performance of our marketplace, a key part of our digital-first omnichannel strategy, which demonstrated its success, a growth as much as it did in France. In '22, marketplace GMV was EUR 112 million, doubling versus '21. Since its launch in November '20, the marketplace cumulated GMV reached EUR 175 million. As you see on the chart, marketplace GMV has strong momentum, rising steady quarter-after-quarter since Q2 of '21. Growth is still driven by France with marketplace GMV of EUR 93 million, which is up 80% year-on-year, but we are also seeing very solid growth at our Spanish marketplace, which was launched at the end of March and met with immediate success. Over 9 months, it's already delivered [ EUR 15 ] million in GMV. And similarly, we are seeing the same encouraging numbers from Italy, where we launched at the end of Q3. After a few months of operation, the Italian marketplace posted GMV of EUR 4 million. Overall, the marketplace accounted for 25% of Group's total online GMV in '22. The continued success of our selective and omnichannel marketplace demonstrates our ability to maintain our competitive edge on digital. Indeed, the marketplace has a number of benefits. First, it drives incremental sales, and we've observed that in '22 numbers. When we have product shortages in our [ own MdM ] catalog, the marketplace offers adequate substitutes. And in periods, where consumers are particularly price and promotion sensitive, the marketplace offers a high share discount compared to our own offering, which is, as you know, a low discount model. In those cases, the marketplace attracts traffic and customers we otherwise would have lost, and some of these customers end up buying Maisons du Monde products. Thanks to these complementary offering, we have been able to protect and even improve in the second half, our online market share in '22 despite a lower product availability at discount levels. Second, as you well know, it is accretive to margins, especially still at international level. Indeed, we have a European-wide sales commission margin and our transportation costs are higher when we ship goods to customers far away from our warehouses. So it's excellent news that our marketplace is at least as successful outside of France, as it is on our domestic market, as it should materially enhance our omnichannel profitability once ramp-up is complete. Third, it is a key success factor in our customer acquisition strategy. Indeed, our marketplace through its vast catalog drives much more than its fair share in new customers to the Group. Finally, it drives a very high number of organic, that is [ free visits ], which improves our overall online marketing ROI. This is a key asset overall on which to build going forward. On Slide 12 now, we turn on our store network, which we continue to optimize through a highly disciplined and pragmatic approach. At the end of '22, we operate 357 stores, which is 5 more than at the end of Q3 and the same number, as at the end of '21. This is a result of 13 openings during the year, of which 7 in France and 6 in the rest of Europe and the same number of store closures, of which 9 in France and 4 in the rest of Europe. As a result, on a net basis, we add 2 fewer stores in France and 2 additional ones in the rest of Europe at the end of the year. We continue to see stores, as a key part of our omnichannel strategy. But in the current context, we continue to be very cautious and disciplined in the pace of developing our network and remain very attentive to the evolution of our category. On Slide 12 (sic) [ Slide 13 ], we focus on the progress we've made during the year on our ESG journey and notably on our Good is Beautiful CSR brand movement through our 5 commitments. On the E part of ESG, we continue to develop our sustainable product offering with 30% of our '23 collections now labeled Good is Beautiful, which is a 10-point gain year-on-year, which is ahead of '25 trajectory. And the number of furniture items repaired or repackaged grew by 42% to 25,000 products. Overall, we achieved a 20% reduction in carbon intensity across Scopes 1, 2 and 3, also ahead of the '25 trajectory, and an 8% reduction of our carbon footprint, well in line with our SBTI approved target of minus 15% by 2030. I would also highlight that the past relamping program we undertook a couple of years ago across the entire network to move from halogen lamps to LED lighting, not only contributed to the carbon footprint reduction, but also mitigated the cost impact of rising energy prices last year. And this program was complemented by a comprehensive energy savings plan across Europe. Finally, the Maisons du Monde Foundation donated EUR 1.3 million to NGOs in '22 to preserve trees and forest, both from its own funds and also from Maisons du Monde customers through the running [indiscernible]. On the S, that is social part, Maisons du Monde continued to progress on its diversity and inclusion program. First, in the highly inflationary context, we granted exceptional allowances to support employees purchasing power, representing an average cumulated amount of EUR 800 per employee across headquarters in stores in Europe. We also continue to promote equal opportunities, notably through apprenticeship programs for young employees at our stores and headquarters. We also doubled number of disabled people in our teams, combined with training session to raise awareness [ among partnerships ]. Furthermore, Maisons du Monde actively promoted equal opportunities for women. 50% of our top positions are now occupied by women and through a forceful action plan, we've reached a gender equality index of 91%, up from 82%, 1 year ago, which puts us amongst best-in-class. In December '22, we signed a new 3-year gender equality agreement with ambitious measures in favor of parenthood balance, work/life balance and women's leadership. Finally, on the G part, the Board's dedicated CSR committee started operating, confirming Maisons du Monde's ambition on the environmental and social fronts and ESG objectives have been included in the variable pay of all our managers. Our ESG performance have been recognized once again by a number of leading non-financial agencies. MSCI has granted us this year again A-grade. CDP gives us a B grade, also stable year-on-year and better than the average C grade of discretionary retail. Finally, Sustainalytics keeps us among the top 5% in global retail, and this year has nominated as industry top-rated ESG company. With this, let me hand over to Regis for the financial section and our 2023 outlook.

Thank you, Julie, and good morning to everyone. I'm really happy to be with you again to give you more color on our full year performance and update you on our action plan. I will start on Slide 15 with our sales bridge, the classic. As you see on the Slide, our sales in 2022 stood at EUR 1.24 billion. They are down 5% versus the previous year, as a result of a combination of subcategory sales post dynamic -- post pandemic and low consumer confidence. This is in line with the updated guidance we communicated last May. They come on the back of a robust comparable base, as 2021 had benefited from a rebound in activity after a tough 2020, which had been marked by COVID-related lockdown. However, as described by Julie and compared to 2019, our sales are actually up by 5% versus pre-pandemic levels, which attests to the strength of our omnichannel model and the attractiveness of our offer. The slide shows you the different building blocks of our 2022 performance. The main component of our lower sales in the period is a drop of EUR 87 million in like-for-like sales due to the challenging comps and soft consumption patterns. This drop was partly offset by a contribution of EUR 21 million on a net basis from stores opened in 2021 and 2022. Let's move on Slide 16. We look at the sales performance here in greater granularity by breaking it down by quarter to allow you to visualize the sequence of our sales, as COVID created a complex reading on a year-on-year basis. Again, the graph shows a dual trend with a year-on-year drop in each quarter of 2022, owing to tough comps and consumption trends in line with our revised projections, but a better performance in each of these 3 quarters versus the same period in 2019. In more details, the graph illustrates the downward trends in home and furniture sales we saw beginning in Q2 and more specifically, as of May. We also observed changing sales dynamics. On the one hand, in-store, traffic was 7% down in H2 versus 2021, and web sales normalized after the pandemic-related surge. On the other hand, within our online sales, we saw a strong acceleration of the marketplace, and in terms of segments, we saw strong growth in B2B, as Julie just described. Recent performance confirms the soft trend of consumption at the moment and still a low consumer confidence in an environment that remains strongly impacted by very high level of inflation. I will come back in this -- later in this presentation on our current trading. Stepping back to take a longer term view, our full year performance in 2022 is well above the pre-pandemic level with Group GMV of EUR 1.34 billion, up 13% versus 2019, demonstrating that we have strengthened our business, while navigating in a highly challenging environment. Moving now to Slide 17, which breaks down our sales by category, channel and geography. Here too, there is a contrasting picture between a tough year-on-year comparison and different picture when comparing with pre-pandemic levels. I will start with category. Both furniture and decoration sales were down year-on-year, with furnitures drop more pronounced at minus 7%, while decoration was down by 4%. Furniture sales reflects product availability issues that we saw at the start of the year in certain product families, including some bestseller products. These were particularly apparent in Q2, where furniture sales were down 14%. However, our team's efforts to rebuild inventory led to significant progress in inventory replenishment with an immediate availability ratio of around 80% at year-end versus 72% at [ end ] September and 58% at the end of June. Through these efforts to ensure better supply, we managed to reduce the year-on-year drop in furniture sales to minus 8% in Q3 and minus 1% in Q4. Compared to 2019, furniture sales were down 4%, largely as a result of those supply issue, but also post-pandemic consumption trends. Decoration, decoration sales, on the other hand, were up by a strong 12% versus 2019 and were more resilient in the current context of consumption in 2022. With its broad decoration offering, Maisons du Monde remains attractive with various price ranges and our good management of commercial activities enabled the company to navigate through a soft category trend. Decoration sales accounted for 60% of total sales in 2022, up from 54% in 2019. Looking at channels, store sales were broadly stable both year-on-year and versus 2019, illustrating a very soft trend and decreasing traffic. Online showed a mixed picture with sales decreasing 16% year-on-year, as traffic normalized after a massive pandemic-related boost. But compared to 2019, online sales are still up 21%, showing a lasting change in consumer patterns. It is important to now fully consider the role of the marketplace in those figures, as commented by Julie. If we refer to online GMV to include the consumer value creation of the marketplace, online GMV is only down 5% versus last year, in line with the sector. Online sales are 29% of the total compared to about 25% in 2019, and online GMV is still a strong 34% of total Group GMV. Finally, concerning geographies, sales both in France and in international markets were down by 5% in 2022. If we look at the international picture in greater detail, Italy, Spain performed a bit better than other non-French markets. Compared to 2019, we see that international markets have grown strongly 14% to represent today 46% of total sales, while France is broadly stable, down 1%, notably considering a decrease of the network footprint of 16 stores versus end of 2019. Closing on sales and now going on Slide 18. Before entering in detail in the analysis of profitability, I would like to spend some time on what is our permanent approach to manage our equation. At Maisons du Monde, our constant focus is to strike a fine balance between driving sales growth through the implementation of strategic initiatives on the one hand and ensuring profitability through cost and cash discipline on the other hand. This means navigating between being agile with short-term tactical moves to adapt to the market and being clear and firm on our midterm strategic ambitions. In the post-COVID world, this is an increasingly complex balancing act. In a year that was marked by weak consumption and an extraordinary inflation that impacting the specialized retail, the home and decoration category, in the context of consumer uncertainty concerning the evolution of purchasing power, we're implementing, as of May, a strict cost containment plan to protect cash generation and gross margin without losing sight of our medium-term end. On the following 2 Slides, we will see how this translated on the EBIT and cash flow lines of our P&L and balance sheet. Let's start then on Slide 19 with our EBIT margin that landed at 5.5%, fully in line with our updated guidance of 5% or above. The waterfall on the slide shows you how we achieved this, despite strong inflationary headwinds. I think it is important to pause and to flag the overall effect of inflation in 2022. If we combine all elements in gross margin, logistics, SG&A, the full impact of inflation on our equation was around EUR 90 million, i.e., around 700 bps in a context of sales decrease, out of which EUR 65 million coming from freight. If we consider the EUR 12 million of 2021 COVID one-off not repeating in 2022, we come to a total of EUR 100 million of externalities. In reaction to this unprecedented adjustment, we managed to largely offset this through our action plan on pricing, operational efficiencies across the board and strict cost containment for a total of more than 550 basis points. Let's start more in detail with gross margin, which was resilient at 64.7%, down 180 bps year-on-year, but higher than we planned at the end of H1. We succeeded in managing well higher freight and raw material costs through efficient, firm negotiations with key suppliers and freight forwarders, reviewing contracts and negotiating rebates. We also managed very well euro-dollar exposure, thanks to our hedging approach to mitigate fluctuation. Year-on-year effect is not material in 2022. It could have been much worse on this aspect, considering the FX context. We put in place as well a dynamic pricing strategy to gradually pass on rising costs and increased discount activities, limited this increase of discount to level comparable to pre-COVID with the objective to remain agile regarding consumer trends. We also managed our mix well, focusing on higher-margin decoration products. Altogether, this enabled us to contain the decrease in relation to inflation costs and makes us confident we can return in the medium term to our historical level on gross margin. On logistics, we continue to implement measures to increase efficiencies on transport and warehousing to adjust efficiently operations to changes in our channel dynamics and also to adapt our organization to enhance flexibility and be as variable as possible in a context of negative sales trend. This helped absorb the cost of the opening of our second distribution center that remains very important for our midterm agenda. On SG&A, we managed to keep our costs stable from significant cost savings to offset inflation, notably surging energy prices, a makeup for the absence of one-off COVID related subsidies on unemployment and rentals that we benefited from in 2021 for a total of EUR 12 million. The forceful initiatives put in place, as of the end of Q1 in reaction to strong category trend adjustment delivered fully above our initial ambition. We have decided to maintain and complement those measures to make sure we keep the right agility in our resource allocation approach. A word on energy cost. This was obviously a major issue for all companies, but we were able to largely mitigate this, thanks to our efforts in the past to become much more energy efficient for a LED relamping program in our stores. We have reduced our consumption by 30%. And with the combination of well-anticipated negotiations with energy supplier in each country, we limited the effect of energy to EUR 5 million. In 2022, we also managed our marketing expenses with great discipline, reducing them overall by 7%, while focusing them on strategic priorities and notably the ramp-up in internationalization of our marketplace. Concerning D&A, as you see on the waterfall, D&A increased due to higher amortization, depreciation and effect of IFRS 16 treatment on higher rents for a total of EUR 3 million and accounts for a negative 90 bps approximately due to sales decrease. So overall, while we lost operating leverage due to the negative performance in sales and faced again an extraordinary level of inflation, we managed to contain our cost and we will continue this effort in 2023 in order to return sequentially to higher profitability levels. Let's now turn on Slide 20 to free cash flow. As shown on the slide, it was down by EUR 58 million in the year to EUR 32 million, but this is slightly above the high end of the range we guided to in May of between EUR 10 million to EUR 30 million. Cash flow was mechanically impacted by [ lower ] sales and EBITDA and the need to replenish inventory that ended below EUR 250 million. This is a lower level versus June [ EUR 270 million ], thanks to a good management of inventory in H2, [ sourcing ] and commercial activities, but still up versus end of 2021. It led to a slightly higher working cap to total sales ratio of 1.3%, but we succeeded and limited this impact through most favorable payment terms with key suppliers, adjustment to working capital requirements and very disciplined allocation of resources. In relation to this, CapEx amounted to EUR 67 million. This is up EUR 15 million compared to 2021, but it's below our initial estimate of EUR 90 million, while preserving investments in key strategic projects, such as the marketplace or the second warehouse that we opened in 2022. If we exclude the opening of the second warehouse, CapEx, as a percentage of total sales was at 3.7% stable versus 2021. On Slide 21, you see that our earnings per share in 2022 stood then at EUR 0.80 compared to EUR 1.52 in 2021, excluding Modani proceeds. The main effect is in relation to the sales evolution and the margin adjustments that I commented on. At our shareholders' assembly to be held on June 29th, we will propose a dividend of EUR 0.30 per share. This represents a payout ratio of 37%, which is in line with our policy of paying out between 30% and 40%. We believe, indeed, it is very important to [ payout ] our shareholders in today's challenging context, and we consider that this dividend illustrates as well our trust in our capacity to sustain positive cash generation and a solid balance sheet. Let me take the opportunity to give you a quick update on the second share buyback program launched in 2022 to buy up to 10% of our outstanding shares. At the end of January, we had completed about 54% of the program. The Board of Directors yesterday decided to cancel 2.3 million of the shares Maisons du Monde has repurchased and that are held at the moment as treasury shares. This closes the financial part of this presentation. Let's now turn to our outlook on Slide 22, with a trading update on the first quarter of this year. We continue to face headwinds with continued soft consumption from persistently high inflation, geopolitical tension and social unrest in France, amidst further normalization of the home and furniture category after the atypical COVID period. If Christmas season and January sales delivered on expectations, the overall context remains complex, and we observed a soft level of demand, notably on high price points. Indicators of traffic or [ conversion ] show consumers concern. At the same time, and it's a very important point, we are also facing a tough comparable base in Q1, as the drop in the category market began in Q2 of last year. In this context, Q1 has gotten off to a slow start. We expect Q1 to be the low point of the year with sales down in the low double digits. That said, as of May, the comparable base will start to ease, and this will be even more the case in H2. In this environment of persistently soft trading conditions, we are very attentive to consumer behavior and March-April will be important indicators to more precisely forecast the year direction. Maisons du Monde is accordingly developing forceful initiatives to reinforce cost and cash protection in the continuity of what we put in place in 2022. We will continue to enforce a strict hiring freeze at our headquarters, restrict discretionary spending to offset inflation and continue to prioritize essential CapEx. The growth model I described previously is our framework to operate. When we next meet with you in May, we will specify our 2023 guidance with the benefit of a clearer view on how the year is shaping at and greater insights on consumption patterns. What I can say, clearly, at this stage, is that the company is fully focused on 2023 priorities, further strengthening Maisons du Monde's balanced growth model, while improving store operations, customer service to return to higher level of profitability and cash generation. With that, Julie, Francois-Melchior and myself are now happy to take your questions.

[Operator Instructions] We are now going to proceed with our first question. And the question comes from the line of Clement Genelot from Bryan Garnier.

Thanks, and hello, and good morning to all of you. Maybe 2 from my side. So then the first one [indiscernible] gross margin. I understand that mix and promotions remain quite unclear, but could you give us the H1 and the full year impacts of freight and FX along the gross margin? And then just to come back on the Q1 sales, so does the pressure come from? I mean, is it only [ France ] driven or maybe all of, [ you know, what ], is it furniture, is it in stores or maybe also online?

Thank you, Clement. I will take those 2 questions and start perhaps with the second one on the current trading and [ vis-a-vis ] indicators, we are observing at the moment. Indeed, again, I just want to reemphasize the fact that the base of France is pretty high. I guess, many of you have that. Currently, traffic and conversion are both negative. It's pretty much a European picture. In store, we observe negative low to mid-single-digit traffic evolution negative versus last year, again, versus last year, with a negative conversion. Again, I think it does reflect the current constraint on purchasing power. On the web as well, it's a negative low to mid-single digits, but we have a more resilient conversion. It's notably on the back as well, also the good performance of the marketplace. So to your question, it's not really about France. We have obviously different very local dynamics. But overall, the picture is pretty much the same regarding the consumer pattern. Vis-a-vis your first question on gross margin for 2023, again, it's a mix of many elements. We all know that we will have a positive track coming from [ freight ]. This is something we have been flagging for a moment. It's materially will be visible in H2 because of the timing of [ times they ] purchase. And at the same time, we will have negative headwind coming from USD and different other elements. So I will not guide precisely on 2023 gross margin yet. I think there will be a 2-tier momentum in between H1 and H2. I would like to come back to 2022 gross margin performance. I think we have proven the capability at Maisons du Monde to improve gross margin versus our original expectation and to limit -- to limit the effect of what has been [ externality ] coming from press. We had very good negotiations with suppliers. I think even if freight is massive, adverse negative versus 2021, we never bet what was visible on the spot and probably half of that. So it does demonstrate our capability to navigate through this environment very positively. So for 2023, I think this will be the momentum, obviously, always managing our negotiation. And then on a positive -- on the top line contribution of gross margin, we will manage promotion. You mentioned that in your question. It's -- as an instrument to keep agile vis-a-vis the current dynamic of trend -- and trend of consumer.

We are now going to proceed with our next question. And the next questions come from the line of Marie-Line Fort from Societe Generale.

My first question is about the prices. Do you expect to pass more price increase over 2023 and also to maintain your more pushing promotion policies that you implement in 2022? And the second question is about your online performance restated from the marketplace, it looks like you are down significantly. So my questions are what does it say about the attractiveness of your brand online? And the second question is, are there really synergies between the marketplace and your online businesses? And are there real additional commerce customers or MdM products?

Thank you, Marie-Line. I'll take your second question around the marketplace. So indeed, the online sales were 16% down year-on-year, but they were 21% up versus 2019. So I think that's a very decent growth. It is true that the share of the marketplace out of total online sales did increase significantly, reaching 25% of online GMV, about double the share of the year before. That's also because of international roll out. Does that mean that marketplace is sort of cannibalizing direct online sales of Maisons du Monde, which could be another way to put your questions. I really don't think so and figures don't show that. They do show that marketplace does drive incremental sales. And as I was describing earlier on, this is very much also linked to the current context, well, actually, to the context of '22, as we're thinking about that. We could see over the year, quarter-after-quarter, that the marketplace share out of online sales was going up and down at product families level, depending on the average availability level, meaning like when we had low availability level on say, mirrors or sofas, then the marketplace share was going up. But as soon as our products came back in, it was going down. So it was very much playing its role of complementarity, and we have all data demonstrating that. Now it is true that in the context of very high pricing promotion sensitivity, this is not where our Maisons du Monde offering is the most competitive right. It also explains our structurally high gross margin. We run with low discounts. And we don't want to extend them massively because it's not our model. So yes, we do increase that a bit, but it is true that in some context, such as the one that we are seeing now, people are very, very discount driven. So it is true that the share of the marketplace is going up, but this is just out of market context. And again, for example, during the sale season in January, the Maisons du Monde catalog also performed very well. So on the -- really on the contrary, I do see that marketplace is a perfect tool to complement our Maisons du Monde value proposition and to adapt to this changing consumer context. And I trust that when the macro is evolving in a better way, the share of Maisons du Monde will also go up again with improved availability. So this is only at sales level. Now to your question around new customers, it does indeed drive new customers to the Group, actually, much more than its fair share. We're saying like it's 25% of online GMV. It's more than that at new customer acquisition level. And that is logical because it has such a vast catalog products that people, they often come out of a product ad on Google, so a lot of them come through marketplace products. And at the end of the day, they end up being Maisons du Monde products, either [ adapt us to chase ] or later on. So it is very true to say that marketplace is not just a sales incremental driver, but it's also a very, very effective tool to optimize our marketing [ array ] and to acquire new customers to the Group. So it's a very profitable driver for all of that. I'm not talking about they are being accretive to margins, but just answering questions here.

Thank you, Julie. Good morning, Marie-Line. Back to your question regarding pricing and promotion for 2023, both are part of the agenda. We will manage pricing at the rhythm of the launch of the new collection, as we did in the past. There will be some pricing adjustments. We have notably in January increased slightly pricing on furniture, and promotion definitely will remain part of the toolbox, I would say, as it was in 2022, but in the range of what we have been doing for a couple of months. Just to put figures there, promotion was roughly at the level of 8% in 2022. It's really close to the pre-COVID level that Maisons du Monde applied to its pricing strategy, higher than in 2021, which was pretty very low due to the business trend and product availability. Just to flag and frame what it could be in 2023, we do not envisage to go much higher than the rate of 2022 at this stage. But it remains an important tool to stay agile vis-a-vis the consumer trends and really use promotion, as a tool to resume traffic notably in stores. So we will use promotion.

And in terms of pricing, what could be the price impact roughly?