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

Good morning to all, and thank you for attending this session. I'm today with Denis Lamoureux, our new CFO; and with Gilles Lemaire, our Deputy CFO. As you already know Gilles and myself, I will start by inviting Denis to introduce himself briefly.

Thank you. Hello, everybody. My name is Denis Lamoureux. I am the new CFO of Maisons du Monde. And I'm delighted to join this company. It's actually the third time in my career that I will be working for a love brand since I was before at LVMH. And after that, I was the CFO of Lacoste for the last 6 years, another iconic brand, a time during which Lacoste doubled its revenue. I'm particularly excited to join Maisons du Monde at the start of its transformation plan, which you are going to hear about today and which was presented to me earlier, and which was also the reason why I am so excited to join the company. This transformation journey is very compelling. It has triggered a huge [ vying ] both from the management team and from the Board. It has 2 main pillars: commercial excellence with a key focus on customer and operational excellence. I believe the plan is really achievable in part because we already have such a strong base to build from, our customer loyalty with strong omni capability and our iconic love brand, which is inspiring, accessible and sustainable. As CFO, I will put my focus on efficiencies, operational excellence and financial analysis, which I have already done many times in my entire career, to secure the resource to be able to invest in store, digital and brand. I am also very optimistic because we have very little debt and ample liquidity available to us, which give us the time to put in place a plan. Once again, I'm thrilled to join Maisons du Monde today. And without further ado, let me hand back to François-Melchior.

Yes. Thank you, Denis. We communicated last year that we would share with you our transformation plan at the end of Q1. This is what we are doing now. And of course, we'll also share our 2023 financial results. We plan to keep this presentation short enough to allow for ample time for Q&A. For practical reasons, we invite you to share your questions on the chat with Carole. Denis, Gilles and myself will also be happy to make ourselves available to you in the coming days for any follow-ups. This slide outlines the journey we want to share with you today. I will first come back to the differentiating assets that make Maisons du Monde so unique as a love brand, as a product designer as an omnichannel retailer and as a committed ESG leader. Yet, and this is the second building block here, we have to acknowledge that our recent performance has been deeply unsatisfactory. And you will see that we have learned from the past to identify the root causes of this underperformance and turn our shortcomings into opportunities. Indeed, and this is the third building block here, Maisons du Monde has changed. There is a strongly renewed both management team and Board fully aligned to transform the company. How are we going to achieve that? This is, of course, the core of our presentation, but you already see some key concepts here. Our plan is transformative. It leverages our unique assets, and more than anything else, it is focused on customers and cash. So we will start from recent learnings. And of course, we will comment our full year results. Then we will share with you how we want to relaunch growth through a deep transformation of our commercial model and how, in parallel, we intend to simplify and optimize Maisons du Monde in order to maximize the financial returns leveraging that growth. After concluding remarks on the financial trajectory resulting from our transformation plan, we will open the Q&A session. Yes, Maisons du Monde enjoys a unique set of assets. Maisons du Monde is a genuine love brand. It relies on a very well balanced model, and it is recognized as a sustainability leader. As a love brand, the simple name Maisons du Monde does bring a sparkle in the eye of nearly any customer. This [ status ] is also proved by customer surveys, as you can read here. It results from our capacity to inspire customers with our own creations, and it translates into being by far the most followed brand of the sector on Instagram and Pinterest, at least, in France. Maisons du Monde also enjoys a very well-balanced model, as you can see in the center of this slide. 50% of our sales are digitalized as a very advanced omnichannel player. In terms of geography, France, our domestic market, accounts for 55% of our sales. In terms of categories, decoration represents 58% of our activity and furniture, 42%. Last but not least, our gross margin levels are best in class in our line of business. Finally, as you can see on the right side, Maisons du Monde has resolutely embarked on ESG and is recognized for its commitments and results in this field. This clearly represents a very solid ground on which to build the future. Now as you will see in a moment, I will not hide behind external factors to explain our recent disappointing results. But on the other hand, it is quite clear that our business and positioning are not currently being favored by the macro context. The level of savings in France could be just one example to illustrate this. At nearly 18% in 2023, it has reached its highest level in decades with the exception, of course, of COVID times. This illustrates the lack of consumption appetite for many categories, including home and decoration. Of course, the cycle will turn eventually, but we need to act now to reinforce Maisons du Monde and allow it to strive in tougher environments and, obviously, to benefit from growth tailwinds whenever they materialize. And indeed, as I said, I will not hide behind external factors. I believe that those adverse external factors have revealed a number of deficiencies both operational and financial, which, of course, we started to address already last year with the 3C plan. Maisons du Monde has probably been too optimistic when we were enjoying all-time high results in the COVID recovery era. As a result, we have focused too much on expansion and not enough on customers and execution on the operational side. On the financial side, this translates into focusing too much on investing and not enough on challenging return on investment. Let me give you just one example that, for me, illustrates both the operational and financial lack of focus. In recent years, Maisons du Monde stopped sharing with store managers their P&L. As a result, our store managers had lost the ability to understand and, more importantly, to activate the economic leverages of their stores. This is why we launched a tactical 3C plan nearly a year ago to make sure all teams would rapidly adjust to our 3 key priorities, i.e., customers, costs and cash. I'm happy to share with you that our 3C plan did produce very tangible results in 2023. This is important to share with you as, to some extent, in the 3C plan, although more tactical in nature and focused on quick wins, contains a lot of building blocks that we'll find in our transformation plan. Also, I can observe that the 3C plan has been a powerful tool to trigger a necessary culture shock throughout the organization. Let us begin with our first C, the customer. Put customers first is not just a nice slogan. It very practical means changing what we do. Indeed, let me just illustrate the first 2 bullets on this left. When I visited a dozen of stores a year ago, I assessed people on the floor, how many pieces of each of our table actually on display do you sell weekly? Here are the answers I got. First, sorry, I have no easy access to this information. So I cannot really tell you. Second, many of those items are not available for sale. And third, anyway, I do not have the authorization to switch a nonavailable model for another one. So we started fixing such situation last year, notably increasing furniture availability by 18 points. We have also adapted our merchandising rules so that furniture on display should be available for order. We estimate that the share of orderable furniture on display in stores has risen from about only 70% to 90%. All such initiatives did bring some customer benefit. We reduced the historical negative gap of our French stores compared to a global French nonfood retail index from 11 points in '22 to 6 points in '23. And we secured a sequential sales improvement in H2 versus H1. In terms of costs, we also triggered a renewed focus within the organization, renegotiating contracts, changing suppliers, optimizing work hours at store level or adapting our central structures, as you can [ zoom in ] on this page. Last of all, we managed our store network, closing stores in a very pragmatic payback-driven approach. In the end, those efforts have resulted in EUR 35 million of gross savings. Last but not least, our 3C plan clearly introduced a new focus on cash. Typically, CapEx allocation is now strictly driven by payback analysis, and Gilles will come back to that. Gilles will also comment our inventory reduction. So the 3C plan has proved extremely powerful. It triggered a necessary cultural shock. It put us on a new dynamic to start '24, and it definitely helped us mitigate the impact of our loss of turnover, which makes a logical transition to a brief presentation of our EBIT and free cash flow results by Gilles.

Thank you, FM. Both EBIT and, later to come, free cash flow bridges illustrates the impact of our loss of turnover and also the mitigation impact of our 3C plan. I will share with you our reinvestment in price accessibility of positive gross margin effect like freight costs and cost-saving initiatives everywhere across the organization. First, the pressure on EBIT margin has been contained despite a minus 9% decline. Gross margin has significantly decreased by EUR 77 million, affected by the top line sales drop by EUR 150 million. Gross margin rate remained more or less flat, moving from 64.7% to 64.5%. I would like to stop a few seconds to explain this 20 bps erosion. As you remember, our gross margin has been significantly impacted in '22 by the surge of the freight rate from Asia. During the first half of '23, we consumed mostly goods ship with container boat in '22, while price were still very high. Then freight rates started to decrease significantly from April '23 with a [ 4 by 1/3 ], and we took the opportunity to renegotiate all our contracts. During the second half of the year, we started to benefit from this cost reduction. At the end of the year, the net gain represented almost EUR 20 million in our gross margin versus last year. So in 2023, we benefited from the freight rate decrease. We also got a very positive contribution of our marketplace with significant growth in France, Italy and Spain and the launch in Germany. All these gains in margin have been reinvested in accessibility and promotion for our customers. We played new promotional events like Black Friday, and we also started to decrease some prices from September with good results in terms of elasticity. We also initiated the reduction of our assortment and liquidated a lot of old stock in our stores, which had obviously a negative impact in our margin rate. Regarding the other costs, the decrease in logistic cost was mainly driven by the drop in sales and volumes as well as about EUR 10 million gross savings with 3C plan implementation. We also improved operational performance like loading rate or store delivery optimization. On store and central costs, this is where our 3C plan really started to pay off in terms of savings, with around EUR 25 million gross savings in payroll, in fees and in other external charges. On top of that, we made some savings related to the activity decrease in stores with less [ temporary store ] or credit card fees, for instance. Finally, we benefited from nonrecurring items with a total net positive impact on our results. All these savings in stores and central costs allowed us not only to offset inflation but also to generate a net positive EUR 33 million impact on EBIT that you can see on the bridge. D&A increased slightly with the launch of [ LEO ], our second logistic facilities near Le Havre in Northwest of France. Significant CapEx reduction initiated in 2023 hardly started to flow through in terms of amortization. In the meantime, our sales declined by minus 9%, and D&A increased. There was a strong mechanical impact of minus 160 bps in EBIT contribution. So all in all, the EBIT reached EUR 45.8 million, meeting the adjusted guidance. Its decline has been relatively contained in such environment. Now I want to come to free cash flow, which is probably the result we are the most satisfied with because given the sales decline, we have managed to mitigate the pressure on the cash flow, which is quite close to what it was last year, thanks to a tight management of our CapEx and inventory. As we have just seen, drop in sales had a negative impact on EBITDA, contributing to a cash reduction by EUR 19 million. The most striking point of this waterfall is probably the positive impact on cash-related CapEx reduction. We have continued to invest in our stores network, but we implemented a much stricter discipline on capital allocation regarding openings and renovation. We also took the benefit of the completion of our investment program in [ LEO ], our second distribution center. As you can see on the slide, we reduced our CapEx by EUR 33 million, representing almost half of the envelope of 2022, but landing at a much more reasonable level compared to market standards. This capital allocation discipline is part of the cultural shift we initiated across the company in 2023, and it was and will remain key to protect cash flow. In the meantime, we have been able to increase availability of our product, while starting to reduce our inventory level, gaining half months of coverage. This helped us to get a slightly positive working capital. So as you can see, in this difficult context, we have managed to protect our cash flow, moving from EUR 32 million last year to EUR 27 million this year despite a drop in sales by EUR 150 million. Adjusted guidance target was also achieved on free cash flow. I now hand back to FM.

Thank you, Gilles. So the key message here is that we fully met all the criteria of the adjusted guidance. The commercial plans of end '23 have allowed us to land slightly better in sales than expected, notably with the Q4 2 points higher than implicitly expected. This has been achieved with a controlled level of commercial visibilty, thus allowing us to meet EBIT and free cash flow adjusted targets as well. You also probably noted this morning that we reduced our net debt by EUR 15 million compared to end '22. And we also stick to our indications of a 30% to 40% dividend payout ratio to be submitted to our general next assembly. With that, we conclude the part of today's presentation that deals with the past. So as we have seen, we do have our unique set of distinctive assets, yet we did lose some customer centricity and financial discipline. We have already started to fix some key topics with our 3C plan, and now is a moment to launch a deeper transformation with the plan we are announcing today. A key new asset of the company that will help us deliver this plan is our renewed management team and Board. As you can see at a glance, we have reinforced both our Board and our management team with skilled and experienced professionals. Half of the people here have been with us for less than 2 years. So yes, we have the broad skill set, fresh perspective and renewed energy to take Maisons du Monde to the next level. Inspire everyday. This is the name of our new plan. This name completely reflects what I have been telling you so far. Yes, we are the leader of accessible inspiration in our sector. Inspiration is our DNA and the core of our commercial promise. But as we fully acknowledge, we have been lacking some customer centricity and some financial discipline. This is what everyday means from now on to all of us at Maisons du Monde. Inspiration is great, and we want to deliver the basics of our business, i.e., guarantee every day in everything we do the best for our customers with the maximum efficiency. You could translate that into inspiration and basics. As in our 3C plan, let us begin with our customers and with what will drive growth again. As you can see here, we will very deeply transform our omnichannel commercial model. This, we will achieve following 4 key streams of work. First, the offer. We are remodeling it to make it even more inspiring, accessible and sustainable. Second, once you have the offer, it all comes to the experience and, notably, the store experience because this is where we have most room for improvement. Third, we aim to further leverage our already existing growth levers, namely the marketplace and B2B. And finally, we are in the process of enriching our existing platform, notably to increase our stickiness with our customers. Now the title of the slide could have been less is more because effectively, we are going to reduce very significantly our assortment. And at the same time, we are going to inspire and satisfy more our customers. No miracle here, just listening to our customers. Let us start with the left part of the slide, i.e., what our customers tell us. First, your products are great, but there are so many of them that it gets confusing. Second, you offer a unique range of different styles, but we would love to have more Maisons du Monde products even in the most mainstream classic sober style we find in any number of other stores nowadays. Third, we also love to find the Maisons du Monde touch in some categories you are not covering. One example being [ bass ] linen. And indeed, I understand our customers. Think about the example of cushions. We offer more than 600 different cushions. Online, you will even find closer to 700 of them on the Maisons du Monde brand. But too much choice sometimes kills the perception of choice. This is why we are convinced that we can further increase inspiration and choice and better coverage for mainstream styles and extend our categories whilst reducing our assortment. Our target is a net minus 25% of items. As you can see, with cushions, some categories will reduce even more aggressively than this 25%. And not only will we remain the richest assortment in town, but the perception of choice will increase. So indeed, you see less will be more. So we will have the right offer, but there is a second key customer insight. This is price consciousness. We will also address it, of course, but carefully so as to protect both brand value and margin. We will come back to the economics you can see on the right later on. But let us begin on the left with our customers. Price consciousness has been increasing recently. We did [ ask ] those of our customers who have not returned to us in the last year. Why isn't it so? 43% of answers said too high prices and 27% not enough promotions. Again, I can only understand our customer. We increased our prices when we were hit by inflation, but we sell discretionary products to consumers themselves hit by inflation. So how do we do that without destroying value? Well, you see the key answers on this page. First priority is to reinforce our price accessibility, focusing on where it matters most, i.e., the first prices, those products that are the entry point into the inspiring world of Maisons du Monde. We also observed that this is a segment where we lost most volumes recently. So we cut some carefully selected 2,000 prices, and we will reinforce the presence and visibility of such entry-priced products. As you know, we tested some price cuts already last year. So our investments here are based upon price elasticities that we measured in '23. In parallel, we will seize 2 opportunities to increase accessibility. First, we will introduce a loyalty program in Maisons du Monde. It will help us strengthen our relation with our customers by granting them some rewards but also by providing them with content and exclusivities. Second, we will reinforce what we call our second chance platform, i.e., to sell at a reduced price, slightly damaged or already used products. This is a win-win. It allows some customers to access our ranges at a very attractive price, and it allows us to sell products that may otherwise be wasted. We started in the stores last year, and we will extend it online in '24. This new trend is an opportunity for Maisons du Monde for one simple reason. We are a brand. Our products have a real value after their first life or even if they are slightly damaged. Let me just share with you one impressive figure, 18 million. This is a number of views of announces for secondhand Maisons du Monde products on the French website, leboncoin, over a period of 12 months. So we can play a financially healthy role in this market, which both serve the accessibility for our customers and reinforces our sustainability commitments. But if second chance financially flies, I'm sure you'll want to understand how prices, promotions and loyalty program translate into a financial equation. This is on the right side here. Basically, we do not expect very significant changes in terms of gross margin levels. But what we do plan is to progressively reduce our '23 all-time high in promotional discount investment of above 13%, shifting part of this investment instead to better prices and to loyalty. Now as a conclusion of this chapter, let me illustrate how the Maisons du Monde offer will be structured. Every single product should play a clear commercial role, which is what you see on the left that then translates into an economic role, which is what you see on the right. But on the page are the essentials or entry-priced products I was referring to previously. They ensure the permanent price accessibility for customers. They are particularly sharply negotiating [ and leased ] to a number of seasons, allowing for high volumes. Above, you will find core fashion products that represent also a large share of our sales, with products that may call for promotions every now and again. And top of the slides are those products that are the utmost of our differentiation with high values, higher margins but more limited volumes. As we reshape our categories along this logic, we will live up to our promise for customers, inspiration, accessibility and sustainability, and we improve, at the same time, our economic equation as illustrated on the right side. In the end, these amounts to implementing a clear category management approach to our ever-inspiring offer. Now you saw that we will deeply transform our offer, but we will also address the experience of customers in our stores. Why is again based on customers' feedbacks on the left. Customers tell us they love our products and the relations with our helpful staff in store, the main and nearly only pain point being the difficulty to find a given product in our stores. And indeed, if you shop for a cushion at Maisons du Monde, you will find them scattered in dozens of different places. This does not match any longer customer expectations. The second feedback is that our stores are not enough adapted to their location. So we will progressively group some ranges together and simplify our layout whilst maintaining the inspiration. You can see here in the middle an example with textile categories. First results are very promising, and we will extend this test and roll out at marginal or no CapEx, still preserving the uniqueness of our store concept. Another learning about store experience is that we are not differentiating enough our assortment or merchandising by store. Typically, a city center store, which serves a high flow of pedestrian customers, was merchandised more or less like larger stores in commercial activity zones in the suburbs. We will also progressively fix that to ensure, for instance, as you can see on the right, that much more space should be dedicated in a city center to decoration and to impulse products and less to large pieces of furniture. So our merchandising can effectively be improved to deliver better experience and, of course, higher sales. By '26, I expect all our stores to have gone through some very significant changes, although most of them will not need significant CapEx. Fixing the offer and the store experience of paramount importance. And yet there are also great success stories of profitable growth at Maisons du Monde that are worth further developing. So let me speak here about one of them, our marketplace. You can see on the left the magnitude of the success with a strong continuous growth over the last years to the point that our marketplace is now representing up to 37% of all our online GMV. This remarkable success is not to be the result of the curation of the marketplace, as illustrated on the right. It is more about quality than quantity. Typically, this enriched offer makes our website more relevant for product searches on the web. And as you see, it brings an additional qualified traffic to our website that also increases the sales of our own assortment. It's also a margin-accretive model. And its relevance is not only for Maisons du Monde but also for our vendors. Indeed, as we are more selective than others, we allow each seller to reach higher GMVs than most other marketplaces. Last of all, the dynamics we observed on products and brands through our marketplace is, of course, full of insights. This is quite an added value for us as our market is not at all as well documented by panels as most other consumer sectors. So I hope you get an understanding of the great value of our marketplace for us, for our sellers and our consumers. The good news is that our marketplace can and will further grow. Indeed, we see a number of opportunities to expand, and they require very little CapEx. Most obvious territory for growth is geographical. We just started in Germany last summer, so this country is still rapidly growing, and we plan to open at least one new country. But we are also investigating some new categories to open. However, we will also grow our marketplace by better adapting to local markets, as we will do in our stores. Typically, we target around 50% of local vendors versus less than 40% currently. We also plan to roll out internationally our prize-winning AppShop platform that helps our staff in the stores better sell marketplace products alongside our own products in France. Last of all, we recently launched our retail media. It started dynamically with a classic indexing service, but we plan to extend our offer to production of data or content for our vendors. This is only the beginning of a highly profitable business line. This is just an illustration of one of our growth engine that can further fuel our momentum moving forward. On top of the potential for growth through improved offer and customer experience and marketplace development, we believe there is still much more to come. Indeed, as we will progress in our transformation plan, it is quite clear that we will be able to enrich our model. It will be about shifting from mere product seller to solution provider. As you can see in the circles, we have a number of levers to develop business and to increase stickiness. The part of each circle that is filled in is just an assessment of our current level of development for each lever. As you see, we already have some basis for each of them. And of course, the so-far empty parts of the circles represent growth opportunities to be progressively explored and seized in the next 3 years. Just as an example, despite our current level of B2B, we present only a marginal share of the market. By '26, we plan to drastically increase this business. Another example, the GenAI. We are already generating thousands of content to massively increase the visibility and relevance of our product descriptions. That is only the beginning with many additional options such as combining our unique decoration professional service, Rhinov, with GenAI capabilities to propose personalized decoration projects to our customers. I will not dwell too much on those opportunities for stickiness and for growth. They are already there in our portfolio of competencies and tools, and we will keep our competitive advantage and grow them. Yet they represent a second layer of our business development whereas our short-term bigger price lay with the commercial model, the offer and the store experience. Let us just conclude that by '26, Maisons du Monde overall platform will include another significant set of businesses and services compared to today's already strong omnichannel model. So we have been discussing at length the commercial and growth agenda of our plan, but we are fully aware that Maisons du Monde must also become more resilient to face headwinds and more agile to increase returns on capital employed. So the second half of our plan really is all about cost efficiency and cash. This, we will achieve by acting in 3 key areas: first, by structurally simplifying our overall value chain; second, by unleashing the power of local initiative; and third, by reducing the weight of cost and cash in our model. What do we mean by structurally simplifying our overall value chain? Well, as you can see on this chart, it will come from systematically improving our tools and processes at each step of the procurement value chain. But on top of that, let me just share with you the 2 main drivers of overall complexity we can and, indeed, we are already addressing: the size of the assortment and the number of product suppliers. Reducing assortment by net 25% and dividing our supplier's portfolio by 2 will allow us to reach the next level in terms of overall simplification. You can all imagine what it means from product development to product sampling, product and raw material certification to factory quality validation, to supply chain organization or even to accounting when you drastically reduce both the number of items and the number of suppliers involved. I will not detail all the steps of this value chain and all the initiatives. But as you can see, we plan to address systematically each of them. Simplifying our core central processes, as we just discussed on the previous page, is key. But we believe we can add another layer of efficiency by better leveraging local initiative and responsibility. This is what we mean here by think global, act local. And this is a very deep change we are bringing to our operations. Here again, I will not describe all the different possible benefits of leveraging the abilities and skills of our associates across Europe. Let me just share 2 of them on this page. First, local marketing activation. That, we made possible last semester with a simple tool called ARMIS. It allows store managers to easily increase themselves the visibility of what is happening in their stores on locally targeted social media. Second, local merchandising adaptation, facilitated by a super user-friendly tool, Nostress, that we just started to roll out last month to all our stores. You remember that at the beginning of this presentation, I was telling you that store staff had no easy access to basic sales data. Well, this era is now already behind us, and our associates can now become again true relevant merchants. The common point of all the dimension of the think global, act local approach is that it allows us to leverage the resources of hundreds of managers and associates that are in close proximity with our customers instead of relying only on [ remote ] processes of head office. Cost reduction is a key chapter here, and we plan to go for an additional cumulative EUR 85 million of gross savings over the next 3 years, chasing costs at all levels of our P&L. To us, this is not a one-shot cost-cutting project but a switch to a permanent cost culture. We call it internally a frugality culture. But the key message here is the one already widely shared within the organization. The challenge is systemic and for all cost categories, each of them being addressed through the relevant angle. Here again, I will not detail each line, but let me just share a couple of examples. The first item on the list, for instance, is shrinkage, i.e., known and unknown losses. While this is above EUR 20 million every year, it had not really been addressed in recent years, but it's a clear must for any retailer. Tracking the sources of losses, we found out that so far, we are not measuring the losses we incur at some steps of the value chain. We must do better there, for instance, challenging a supplier whose products are regularly reported as damaged by end consumers when they open their package; for instance, challenging and collaborating closely with all last-mile providers to drastically reduce number of missing or damaged items on delivery. We are now in the process of implementing tools and governances that will help us track down and reduce all sources of shrinkage, with, of course, also a custom benefit of increased quality of service. The second example I would like to share with you is that of the store cost optimization. I told you at the beginning that Maisons du Monde stopped sharing financial information with our store managers some years ago. Well, this is over now. This very week, all our store managers are going to receive their first P&L. What does it change? Everything. Let me share with you what store managers told us as they informed about receiving their P&L. So I will be able at last to challenge the cost of services I get for cleaning or security or for the number of deliveries I receive, et cetera. Well, yes, this is precisely the objective. To conclude on this section and as you can see on the right part of the slide, we are cutting the cost as a necessity per se and the organization also understand that it is a nonnegotiable condition to carefully reinvest where investment can deliver growth and value. So this slide is a really important one as it brings together all the initiatives of the plan and focuses on taking a more selective approach to CapEx while enhancing cash return for shareholders, a progressive but fundamental shift towards a more asset-light model. First 2 levers are about investing only lightly to generate growth. Marketplace and B2B, we spoke about, are growth levers that mobilize very limited CapEx. And we will favor our affiliate and franchise partners to open most of the new stores. Indeed, despite the 40 to 50 closures or transfer of stores we announced, we plan to increase the total number of stores under our brand over the next 3 years. But the large share of the investment will come from our partners. In the middle stands the working cap potential improvement. We made a very significant progress on inventory reduction, but we can do more. And we certainly can extend payment terms for a significant share of our suppliers. On the right side, coming back to the 40 or 50 closure or transfers, let me just tell you that both their identification and their planning is executed with a very pragmatic store-by-store payback evaluation. You see at the bottom of the page how such actions will improve our returns on invested capital. I believe that one of the more structural evolution of our financial model will be the evolution from virtually 0% of stores operated in partnership in '22 to closer to 30% by end '26. As you understand, we are progressing on all fronts that allow us to simplify our business in terms of execution but also in terms of cost and in terms of investment. This will transform the financial model just as we spoke earlier about the transformation of the commercial model. Now what will we share with you to keep you updated on the progress of our transformation? This plan is all about execution. So here is selected extract of the cockpit we are using internally to monitor our progress and take corrective actions whenever needed. Those criteria, as you can see, mainly follow our logic of the 3C: customers, cost and cash. So indeed, we plan to share with you some of the key transformation indicators that, with the exception of the last one on this page, will be updated every 6 months. We added the C for collaborators, which reflects our determination to make all of our teams fully part of the journey. So we will regularly update you on our trajectory. Last but not least, this plan translates into a progressive return to growth and into cash flow generation. On the left, you can see the progressive step each year and, on the right, their translation into growing cash flow generation. As you can see, '24 will be the pivotal year of the transformation to fix the basics and to lay the foundation for growth. It will come with a cash flow that we see the benefits of both 3C plan and current initiatives underway, but this also reflects investments we are making in our transformation at the beginning of this 3-year journey. '25 and '26 will be years of the return to growth and its acceleration whilst cash flow generation will grow in parallel. Over the 3-year plan, we will thus deliver a cumulative free cash flow above EUR 100 million, and we will have transformed our company into a resilient and more asset-light model. And we plan to retain an unchanged dividend payout ratio of 30% to 40%. So this now ends this presentation. The key messages I would like to underline again are that our plan fully leverages the very unique assets of Maisons du Monde and its love brand; benefits from the full alignment of our renewed management team and Board; is supported by a healthy financing structure that matches our road map; is already underway, leveraging the momentum of our 3C plan; deeply transforms our commercial model at the service of our customers; also transforms our financial model to establish a more asset-light company. All of that, of course, to relaunch profitable growth. I thank you for your attention. And of course, we will open the Q&A session in about 3 minutes. [Break]

So we are back. Thank you for your questions. I believe we'll have time to address all of them. But if it was not the case, remember that we are, of course, available for you for some follow-ups in the coming days. So the first questions I do see are about the share buyback. In fact, we have 2 questions by potential share buybacks. So what I would like to tell you is at the moment, we believe the best use of our cash is to invest in our transformation plan, Inspire everyday. We believe this is the best way to deliver value for all stakeholders. So at the moment, as of today, there is no topic of share buyback on the table. I see another question, which is about the marketplace, the marketplace negative impact on Maisons du Monde brand image that would come from the low quality of some vendors. So indeed, our marketplace, as I mentioned, is a curated marketplace, trying to focus more on quality than quantity. And of course, we are monitoring closely the quality results of our sellers. We listen to our customers there like we listen to our customers everywhere else in the organization and through our channels. I can tell you that this quality is monitored and that the CSAT, customer satisfaction, of our vendors on our marketplace has been increasing last year. I have a third question here, which is price, promotion, loyalty budget. Will it remain stable? So as you saw on the slide, in fact, it was the allocation of the different levels of investments between the price, promotion and loyalty. In fact, we expect our gross margin to remain globally stable over the 3-year plan, which also induces a level of investment that will also remain more or less stable over the period. I have a question here on why do we guide on free cash flow and not on EBIT. Well, that's a very straightforward question. We believe what is going to drive value creation for our shareholders is the return to free cash flow healthy generation. So really, cash is of paramount importance. And also, I have to say, it does match very well the mindset shift I want to implement in Maisons du Monde. So we are aligning here the external communication and the internal messages, and I believe that's also a key success factor to drive the transformation moving forward. Do you have a medium-term EBIT margin target? And then something about the free cash flow. So about the medium-term EBIT margin target. Yes, we have, of course, an internally shared EBIT target for the medium term. It will, of course, reflect the return of growth of the top line. And also, it will, to some extent, be in parallel to the generation of free cash flow. So we have it internally, but at the moment, as you understand, we don't to guide and to focus on the free cash flow generation over the 3-year plan. Second part of the same question is about the evaluation of the free cash flow. I see the question being, I see a EUR 5 million on your slide -- or EUR 10 million for '24, EUR 5 million, I guess, it's EUR 35 million following year and EUR 55 million for '26. Do you have any comments? No, I don't have many comments on that one. But as you remember, we are communicating that we'll be delivering over EUR 100 million of free cash flow over the 3-year plan. And indeed, '24 is going to be a positive real contributor of this free cash flow generation. I'm looking for next questions here. There was a question on free cash flow. Is it going to be negative or close to 0 in 2024? So here -- sorry, I'm repeating myself a little bit. But yes, it is not our baseline that '24 free cash flow should be close to 0. In fact, we will be, on the one hand, benefiting from the impact of the 3C plan actions of last year, plus, of course, the first elements of the Inspire everyday transformation plan. On the other hand, you understood that we want to keep the agility to invest in the necessary transformation of the organization and the company. And of course, if any opportunities to further accelerate the plan were to present themselves, we would want to keep the agility to seize them. But yes, all this being taken into account at the end, we absolutely are guaranteeing that '24 will be a positive free cash flow contributor to the overall 3-year ambition of over EUR 100 million. I see a question on why communicate only on gross savings. Well, clearly, the first reason or the main reason is that we can hardly anticipate the different inflation rates for the different items of cost. We do have a current quite visible example with the Red Sea crisis that impacts the freight cost for an unknown still period to come. So we prefer to keep the focus on what we actually want to deliver, the levers we can activate to reduce the cost and, hence, work really on the growth savings rather than speaking about net savings. At the moment, I see no further question. A question about the number of stores that came also quite early this morning. Indeed, we plan to close between 40 to 50 stores closed or transferred. And remember that in '23, we did close 13 stores and transferred 5 to affiliates who reinvested in those stores. So we still have a plan of about 40 to 50 very pragmatically identified stores to be closed or transferred. But again, and I did not give the figure, but we plan also to open new stores, with a large proportion of those new stores being also opened by our partners. So in total, we plan to have a total number of stores of around 400 by the end of '26, i.e., about 50 stores more than what we have today. And maybe, Gilles, a question for you is the personnel cost of the store that you will deconsolidate part of your gross savings. Or does it come on top of it?

No, it would come on top of it. We are anticipating a saving cumulated -- a cumulative saving of about EUR 85 million for the 3 coming years, and all this transfer would be additional savings.

So I have another question. Can we have an idea of the like-for-like growth in '23? What was the impact of store closures on sales last year as well, I guess, and the 30% franchise targets includes outside French stores. Do we have to expect pressure on gross margin? So I will take the last 2 questions, and then Gilles, come back to the first 2 questions. So again, like-for-like growth in '23, impact of store closures on sale in '23, I understand. How many closures do we expect in '24? The 30% franchise target, including outside French stores and expect pressure on gross margin. So I will take the last 3 questions. So in '24, we expect, let's say, a logical and reasonable share of those 40 to 50 closures and transfer of stores. Second question, the 30% franchise target include outside France stores, absolutely. We have a vision of development of affiliation and franchise, which is both in France and internationally. So it absolutely includes potential openings of stores or transfer of stores out of France as well. So it's really for the total number of stores that this 30% does apply. Do we have to expect pressure on gross margin for the next years? Well, as I said, we have a plan that allows us to remain relatively stable in terms of gross margin, trying to generate, of course, savings and purchasing efficiencies, notably through the reduction of the assortment and the reduction of the portfolio basis of suppliers. And yet, we want to reinvest wherever necessary in terms of accessibility overall, keeping globally a stable level of gross margin. And Gilles, if you want to enlighten us on the 2 -- first 2 questions.