SEB SA (SK) Earnings Call Transcript & Summary

Hello, and welcome to the presentation of the Groupe SEB 9-month Sales and Financial Data. This conference will be presented by Stanislas De Gramont, Chief Operating Officer; Nathalie Lomon, Senior Executive Vice President, Finance; and Isabelle Posth, Vice President, Financial Communications and Investor Relations. My name is Josh, and I will be the coordinator for today's event. Please note that this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Stanislas De Gramont, to begin today's conference. Thank you.

Good evening, ladies and gentlemen. Welcome to this conference call. Actually, we will commence full year 2021 sales, not 9 months, together with the fourth quarter. I will be presenting these results with Nathalie Lomon and Isabelle Posth. And -- but before we get started, we are still in January, I want to take the opportunity to wish all of you and your family a happy New Year 2022. Now if we move on to Slide #5. 2021 is an absolute record sales year with sales totaling over EUR 8 billion, which is an increase of 16% versus 2020. Now we've been consistently revisiting upwards our performance throughout the quarters last year. And this performance is all the more remarkable as we've been facing, like all the industry, some considerable tensions on the supply chain environment. We have 16% sales growth versus 2020, 15.5% like-for-like. But more importantly or even importantly, we are improving over 10% or close to 10% above 2019. And when we look at the evolution of our sales quarter-by-quarter that the growth has been stepping up quarter after quarter, starting at 7.5% growth Q1 versus 2019, reaching 11.1% growth in Q4. That's over EUR 1 billion growth. And if we go to the next slide, that growth has been fueled by virtually every categories in every market. We -- this bridge shows you the contribution to the growth of each of our regions and the Professional business. We start from full year 2020 at EUR 6.94 billion. And Western Europe alone has brought in an extra EUR 360 million. On top, Eurasia, other EMEA markets have brought in an extra EUR 260 million. That means in Europe alone, between Western and Eastern Europe, we've grown over EUR 600 million year-on-year in 2021. Beyond that, China, which, as you know, is a traditional growth driver of the group, China has contributed EUR 175 million growth, posting a double-digit growth as we were expecting. But not only we see the Americas driven by the United States, but also the other North and Central American countries contributing EUR 167 million. The other Asian markets driven by Japan and South Korea, mainly, but all the other geographies have contributed also bringing close to EUR 60 million. And the Professional business that had a slow start of the year ends up posting EUR 60 million growth altogether. You see a minor positive EUR 40 million currency effect. So what we can say in this 2021 performance is beyond the share number, which is pretty impressive. We have all the markets and all the regions contributing in a large part to this performance. Now I will hand over to Nathalie Lomon that will give us some highlights on this performance in more detail.

Thank you very much, Stanislas. And good evening, everybody. So we're moving to Slide 8, please, where we can see the full year sales that Stanislas has just commented and also the sales in the fourth quarter. So when we look at the full year, and if we come back to what we have posted in H1, you may recall that over low 2020 comps, we delivered a very strong growth. H2 proves also to be another strong growth semester, yet achieved on more demanding comps. As you will remember, the turnover in H2 2020 was back to growth. It was a slightly positive growth when compared to the previous year, thanks to the pickup of the consumer business last year. In 2021, it's both divisions, Consumer and Professional were contributing to the annual robust performance, and I will get into more details in a few minutes. Regarding the fourth quarter, no surprise. The pace of the revenue growth is slightly more moderate than for the full year. But it is, however, better than what we had anticipated as we achieved a growth close to 12% and a reported 9% like-for-like. If we move to the next slide, where you can see our usual sales bridge. Organic growth as commented by Stanislas is 15.5%. It's EUR 1.079 billion, driven by both activities, as I said. We have a negative impact of currencies, minus EUR 22 million, that I will comment in the next slide. And then we have a positive impact from scope coming from the full impact of the acquisition of a StoreBound that we are now fully consolidated over the year. So all in all, it means total growth of 16.1% for the top line. Moving to the next slide, we can see the details of the currency impact. So we have a negative impact over the year of EUR 22 million, but you can see that the trend that was penalizing us in the first and second quarter has finally turned to be more positive, and that's why we're ending up with only a minus EUR 22 million impact in terms of sales. Most of the positive impact is coming from the Chinese rand, where you know it's our largest FX exposure in terms of sales. If we move into the next one, what I would like to point out in this slide, and I'm not going to go into much detail, we will do that in a few minutes, is that all our regions are posting double-digit growth over the year, and this is a record. EMEA and the Americas are posting a very robust momentum, 19% growth like-for-like, while Asia sales are up 11% and China up 11% on a full year basis. Regarding Q4, consumer organic growth is 8.4%, again, with a very strong performance on the Chinese market, close to 15% and high single-digit growth in EMEA. After a very strong growth in the second and third quarter, the Professional segment is delivering 14% growth again in the fourth quarter. So this is very much in line with what has been delivered since the second quarter, and we finished the year at plus 10.2%. I'm moving to Slide 12 or 13, yes, with more details on the business division and starting with the Professional segment. So as a reminder, our Professional division includes Professional Coffee Machines, hotel equipment and Krampouz. But I will focus my comments on Professional Coffee Machines as they represent slightly above 90% of the Professional division. So you may recall that 2019 was a big year for this segment with 2 very large deals with key customers and 2019 is still a challenging historical base. But when we compare to 2020, the group has achieved overall a very good sales performance for both the full year and for the last quarter, which shows strong dynamics. The growth that we have delivered in 2021, as I said, compares with a lower 2020 due to the highly negative impacts of the COVID crisis and the shutdown of the HoReCa industry. But the momentum that we have posted over the past months bodes for a better and a broader business recovery, but let me elaborate a little bit more on that on the next slide. The context was quite uncertain for the HoReCa segment. However, our revenue is moving up since the second quarter. It's coming from the core business, which has been regaining ground over the quarters and from one-off deals in the U.K. and in the U.S., mainly in the second and in the third quarter. So first, core business encompasses machines and services, it's backed with a diversified customer portfolio. And also it's -- our business is also driven by innovation, another strong growth driver to ensure both high-quality coffee and optimized business for our customers. Q4 was mainly driven by core business. It was fueled by resuming activity in Germany following months of restaurants, hotels and cafes shutdowns and by expansion in EMEA and in North America. Maybe one quick word or so on the hotel equipment, which is slightly growing in 2021, thanks to a very dynamic second half of the year. I'm now moving to the Consumer business, which represents 90% of the group sales. So this year, we have posted EUR 7.431 billion of sales. It's 16% like-for-like, 16.7% reported, so very, very robust growth throughout the year. And it's again a record for the company. As far as Q4 is concerned, the sales progression was stronger than what we expected, especially in the month of December. And if we put things in perspective, and we compare 2021 sales to 2019, the figures speak by themselves, and they show that the group has been able to wipe 2020 modest performance and achieved also a very strong growth when compared to 2019. The next slide will help me give you more granularity on the consumer business. So you may remind that we had a very strong momentum in the first half on the back of strong demand and also low comps. The strong demand has continued to drive the growth for both SDA and cookware in the second half. Our performance are very strong in all geographies, all product categories to the exception of fans. And across the board, e-commerce fueled the momentum through all channels, including pure players, marketplaces, click and motor, and our own D2C. And lastly, while the main driver was a very strong core business, the group has also achieved a nice performance with loyalty programs as we did the year before. So thanks to a very positive mix effect, against a backdrop of soft promotional environment, our sales are quality sales. We have massively invested in growth drivers to fuel the growth, slightly above last year. And as we had to offset some heavy headwinds this year, we have also implemented some price hikes throughout the year to offset FX impacts, mainly in Brazil, Russia, Turkey and also in the fourth quarter to help compensate for raw materials and freight increases. On the next slide, as I was just mentioning, you can see that all categories except Home Comfort are delivering growth. Home Comfort is mainly made of fans. And this year, the weather conditions in the countries where we sell fans, it's mainly Brazil, were not in our favor, and this is expanding for the counter performance. Apart from that, as you can see, very nice growth throughout the product portfolio. Moving to the next one, next slide, which shows all top-20 countries. I would like to say a bit more on this line because this one is very exceptional. Having mature countries such as France, Germany, growing double digits is a remarkable performance. Our EUR 1.1 billion growth that we have discussed previously is mainly nurtured by those top 20 countries that you can see on this slide. And for you to remember, they would represent around 85% of the consumer sales. I'm going to dig into more detail by geography, starting with Western Europe with the support of Isabelle. So Western Europe had a very strong growth in 2021, reaching 15%. Very strong momentum in the fourth quarter as well as our sales are up 8% even over 2019. So it's a record sale for Western Europe this year, EUR 2.8 billion. The demand was strong in all of our markets. We grew double digit in lots of countries, as you have seen in the previous slide. All distribution channels, offline, online contribute to the performance. We have best sellers in all our categories, Ingenio, the new generation of G6 cookware in electrical cooking in Home Care. And as we said, we have started to implement some price increases in some specific categories in the fourth quarter to help offset higher raw materials and freight prices. Isabelle, you want to give us some more information regarding France?

I would like to highlight the outstanding performance that we have achieved in France in 2021. Combining on one side, buoyant demand and growth on a strong dynamic. Above EUR 900 million full year for sales and close to 20% growth, that was manyfold, encompassing core business, but also loyalty programs, encompassing also all retail channels, ranging from mass to emerging but fast to emerging -- but fast developing DTC and also electro specialists and e-commerce. And last but not least, the vast majority of our product categories with a sustained growth in cookware, food preparation appliances also full automatic coffee machines, electrical cooking at large and last but not least, home cleaning that we mentioned here. In home cleaning, you know that we are featuring a very exhaustive product offering, including canisters with or without bag, versatile, Clean & Steam robots, so a very wide product range that allows us to be very diversified. This policy has allowed us to achieve outstanding performance and substantially outperformed the market, both off-line and online, materialized by overall market share gains. And the photo -- the picture that you can see here is the newly launched cordless IXEO vacuum cleaner, which is a combination of a canister vacuum cleaner for high performance, an upright cordless vacuum cleaner for easy handling. And this has been launched. This product has been launched quite recently and has already ranked #1 in recent panels. It's really a huge potential. That's for France. Now if we want to go to Germany, also great dynamics in Germany. In Germany, a record year for the group in Germany, including Groupe SEB Deutschland, but also WMF, whose sales have been firmly up despite a long lockdown of VMS stores, as you know. Growth was fueled by many key customers, off-line and online and that brings us to the level of sales that you can see here. Product lines that have been clearly sustaining growth has been home cooking, which is a positive trend overall, including electrical cooking. And you know that we are a very strong player in grills with OptiGrill in Germany, but also food preparation and an outstanding performance in cookware, as you can see here, where we've gained market share overall, thanks to the core business and Ingenio and Jamie Oliver, thanks also to loyalty programs, and thanks to very strong media investments that have created a very strong momentum for Q4.

Well, thank you, Isabelle. So moving to other EMEA countries. This area in the group continues to be a very fast-growing region on an organic basis, which delivered in 2021, 29% growth in terms of the top line, meaning that we are crossing the EUR 1 billion with EUR 1.1 billion sales in the year. It's a great performance across all countries over 2020 and obviously over 2019. This came from several factors, very favorable market dynamics, good demand, market share gains in almost all the markets and product lines and reinforcement of our position online with both click and mortar, pure players and also the development of our D2C consumer online and offline. To be noted as well, we have implemented price increases in this area throughout the year in several countries, Russia, Turkey, Egypt, to offset FX devaluation and then more recently to help compensate for raw materials and freight increases in the view to protect our margins. You want to give us some more details regarding Central Europe, Isabelle?

Yes. A few years ago, I think it was in 2018 or for 2018. So at the beginning of 2019, we made a focus on Central Europe telling you that we had achieved EUR 300 million turnover. Now we're above the EUR 500 million. So quite a good performance. And this has been fueled by major markets, as you know, and we've very often spoken about that. We've spoken about Turkey -- we've spoken about Russia. We've spoken about Central Europe. We've spoken about Turkey. But also, we said that we were developing in small countries and fast developing. And you know that small countries become less and less small and bigger and bigger. So they have all been contributing to growth in the area with very strong achievements in a certain number of countries. We've spoken a few years ago about Romania, where we have 16% of market share, up. We've spoken about -- very recently about Slovakia, where we have 14% of market share, up. We've spoken about Ukraine, where we have more than 25% of market share, more than 2 points up. We've spoken about Kazakhstan, where we have more than 20% of market share, up 4 points. So it is a huge achievement. It's been a huge achievement over time. And clearly, we intend to continue in this direction.

If I may build on our performance in Europe, it is true that we've been helped particularly in the former part of the year by strong demand. But the second part of the year has been a bit weaker in terms of market demand. And what explains the increasingly good performance versus 2019, in particular, is a combination of a strong and ever-increasing penetration on e-commerce. It's also the continuous development of our direct-to-consumer activities off and online. It's also a very strong portfolio of innovations or renovations, leading to consumers trading up and its strong activities and support behind our brand. So what explains those performances across the region, across the countries is a combination of all those elements.

Thank you, Stanislas. So we move to North America now. It's another record for the company. Full year sales almost reaching EUR 800 million, so up 27% on a reported basis and 18% on a like-for-like basis. So the bulk of the difference is coming from the integration of Sao Bernardo on a full year basis, as I mentioned previously. In the U.S., we have benefited from a very strong momentum, 20% like-for-like for the full year, 15% for the fourth quarter, primarily driven by All-Clad. Isabelle will get into more detail in a few seconds and also by StoreBound, as I mentioned. For you to know, DASH brand has become in 2021 the best-selling waffle brand in the U.S. Regarding Q4, we mentioned in the previous quarter that we're experiencing some disruptions in the supply coming from our Vietnamese plant because of some closings due to COVID-19. This has somewhat suffered in the fourth quarter. Mexico, just a highlight on this country, buoyant momentum throughout the year, dynamic core business, good performance in all categories, especially in cookware with the rollout of G6 and also in SDA. So we want to maybe give you more details on the performance of All-Clad.

Yes, regarding All-Clad, well, figures speak by themselves. I would like perhaps to stress the point that we're getting closer to the mark of EUR 200 million sales for All-Clad, which is huge. It is a remarkable performance. We have a reference here over 10 years. It's a remarkable performance over the years. All-Clad has been gaining ground on the American cookware market. As a reminder, we -- All-Clad started to make cookware back in 1971, which makes that we have today 5 decades of expertise and excellence that have materialized in, well, growing sales for sure, but also growing market shares. And today, All-Clad can rely on a recognized expertise in high-end cookware and is the #1 brand for high-end cookware in the United States. Just as a reminder also, you know that it is a made in America cookware, mainly, because we have this big plant in Canonsburg was big. We have an expertise plant in Canonsburg, which is really dedicated to the high-end cookware and bonding technology developed by All-Clad over the past year.

Thank you, Isabelle. So now moving to South America, higher sales when compared to 2020, revenue up 22% on a like-for-like basis, but a mixed picture. On the one hand, Brazil where situation is difficult, especially in the fourth quarter. We had a very strong first half of the year, but the sales have declined. Overall environment is quite deteriorated there. And as I mentioned previously, the weather conditions in Brazil did not help us. They were quite unfavorable to fence sales. To the contrary, Colombia, we had a very, very strong demand in this country. Business activity is up more than 35% like-for-like with a very strong fourth quarter as well, even if at a slower pace. All the distribution channels we have there held the sales performance from electrospecialists to the traditional trade, e-commerce and our own store network. For you to know, at the end of the year, the group had in Colombia 27 stores which is plus 4% when compared to 2020. Isabelle, you want to tell us more about the Colombian market for us?

Yes. In fact, again, in Colombia, it's a continued and ongoing momentum over time. The strong progress we have been achieving over the past year has been fueled by, I would say, almost all categories and also with an expansion in terms of product offering that has been very fruitful over the past year. So this year, again, strong performance that was achieved both on a full year basis, but also in the fourth quarter. And this very strong performance reflects, in fact, our continuous progress advances in terms of commercial approach, but also that we have 2 plants there in Colombia, our industrial competitiveness in the country. The major drivers for this strong growth are still electrical cooking with a category which is really booming currently is the oil SD friers, which is also the case in other countries in Latin America, such as Brazil and also the blenders. As Nathalie just mentioned, the story in Colombia is also about our own retail, which has been developed over the past years and represents 35% of our sales in the country, which is quite a significant amount, and that has been growing and increasing over the past years.

Well, thank you, Isabelle. Now talking about China. So what we call a winning combo, strong profitable growth on the Chinese market and market share gains. So the group has handed the year with an excellent performance on the Chinese market with sales up close to 11% on a like-for-like with a very strong fourth quarter at 14.5%. This performance was bolstered by online sales, especially the Double 11 event, which proved to be very successful for Supor. E-commerce now accounts for more than 60% of Supor business and is more than offsetting the decline in the store footfall. We have gained significant market share over the year, and we have consolidated our leading position in the cookware segment. So the strong growth in 2021 is coming from contribution of all our main product lines, cookware, electrical cooking appliances, home care, with vacuum cleaners, large kitchen appliances and new categories. We have constantly improved the product mix through innovation and premiumization, and we are successfully transforming our online model with a strengthened presence on the new e-commerce platforms and our developments in direct sales. Isabelle on Supor?

Well, on Supor, I would like first to stress the fact that Supor is the undisputed leader in cookware in China and far ahead of the #2. The second point is that we are also -- Supor is also a strong #2 in kitchen electrics, which is based on long-standing high-ranking positions when not first, in flagship products but at the same time, also increasing positions in emerging, fast-developing categories. All in all, what we can see in 2021 is that our market shares, both in cookware -- combined cookware and kitchen electrics have increased by 2 points versus 2020. We have elaborated at the end of October on Supor a significant progress in terms of approach to the online channel, materializing in an improved online operating margin, which is now exceeding the off-line profitability. This is still true. And Supor continues to strengthen its positions in all distribution channels, notably by innovating and adapting and enriching its product offering. I would like also to mention that Supor achieved great Double 11 results, as you can see, EUR 1.7 billion sales, which is more or less EUR 230 million, just plus 15% versus 2020 with very strong positions in a set number of e-commerce platforms, including the new ones, which are clearly used by the young generations. Just as a reminder, EUR 230 million in, let's say, a 10-day period, that's the -- more or less the equivalent of our #7 country worldwide.

Sorry, restarting, the mic was off. So I'm moving to other Asia, which is delivering also a great year with sales close to EUR 600 million, so up 11% on a like-for-like basis when compared to 2020. Again, here, dynamic fueled by about 4 countries in the region, which has posted double-digit organic growth. After a slight slowdown in the third quarter in Q4 sales are up, again, 8.1%, sorry, like-for-like, while 2020 comps were challenging. In Japan, which is the first country in the region, the growth was driven by online sales, especially with few players but also by our own retail network, which continued to perform well. It represents 25% of our sales in the country where we have 51 stores. In terms of product categories, we have best sellers in cookware, electrical cooking and beverage. In South Korea, closure of Ningbo port in China, which has caused some disruption in the third quarter is behind us. In the fourth quarter, the supplies of the goods were released and transformed in a good sell-in at the end of the year, again, with cookware and e-commerce as main levers for growth. In all other countries, most of them, the group has achieved double-digit organic growth. So maybe our last focus. Isabelle, yes, on Japan?

As shown on the slide, it's a steady success story over the long term. Japan is our sixth market. It's been very high in the ranking for a long time with, I would say, very constant and consistent growth over time. As a matter of fact, Groupe SEB has behaved like a game changer in Japan. And we have probably already spoken about that in the past. We have been building new categories. We have been changing the deal on the market. In cookware, we changed the deal a long time ago by introducing the removal handle cookware in a country where apartments and flats are very small, and the need for space is quite a crook. The second -- and this today allows us to still have a #1 position in cookware in Japan. The same thing happened with kettles when we changed the deal and proposed kettles in a market which was very [indiscernible] pot driven. And clearly, that changed consumers' everyday life in Japan, and we are still very strong #1 in the kettle market with much more than 50% of market share. And last but not least, you know that being in cookware, we've also been very strong for a long time in pressure cookers and the market has shifted from pressure cookers to electrical pressure cookers. We are present in both, which means that today, we have been able to leverage the Tefal brand and to use the very strong Tefal brand equity to create this new market and to be a strong player in this new market. And this is the story of Groupe SEB in Japan, very strong over time and game changer.

Thank you, Isabelle. Thank you, Nathalie. Let me now wrap it up and share with you the key takeaways of this year's sales performance. But before we do that, I don't want to interrupt, I'd like to come back on China. We see in China a constant evolution of the distribution platforms. We see the emergence of Pinduoduo a few years ago, then we see TikTok, then we see WeChat, then we see Kuaishou. We see a lot of new players emerging. We see the same Alibabas and Jingdong moving from marketplace to direct-to-consumer models. We see on to off with the opting of tens of thousands of physical stores for Jingdong. And what's remarkable in Supor is not only their ability to adapt their distribution model very fast, but to do it in a way that maintains the sales growth and the profitability of the sales growth. So we are -- we don't know what's going to happen tomorrow. We know one thing is that all these changes, all these evolutions of the distribution patterns and models in China, Supor has been able in 2021, like in the previous years, to serve them and to post performance, which is remarkable from top line growth, but also we'll see that later in the year from a profit point of view. So I think it's something that is extremely reassuring on our abilities and our adaptability to a fast-changing distribution environment in China. Back to the key takeaways. As you've seen, it's been a record year, sales over EUR 8 billion, a growth over EUR 1 billion or 16%. We've been cumulating records on the consumer business. We've seen some markets passing some sales thresholds. We see all our categories in growth, but our fans. We have recovered some positive dynamics in the Professional business. We are very confident in the future development of this activity. Service, which is a key part of the development and the heart of our Professional business is now back to 2019 level, and we have a lot of commercial discussions going on. And we have proven and shown our ability to offset the headwinds during the year. That leads me to the next slide where we can now share that our 2021 ORFA margin will reach 10%. That means we'll exceed EUR 800 million. Now let me remind you the sequence of sales growth headwinds in ORFA margin through the year. We started communicating some hypothesis back in April, we were integrating 10% sales growth and an ORFA margin close to 10% with headwinds estimated at the time at EUR 140 million. The year went through, and we ended up the year with a sales posted at 16% growth, headwinds reaching around EUR 300 million, and we are confident that our ORFA margin will reach 10%. Of course, the results -- the financial results are unaudited and they will be disclosed on February the 22nd -- 25th, sorry. Now I think we are done with our presentation. Now may I hand over to the audience, we will take your questions.

[Operator Instructions] We do have a few questions in the queue. So our first question comes from the line of Charles Scotti (sic) [ Charles-Louis Scotti ] from Kepler.

Happy New Year and congratulations for these outstanding numbers. A few questions from my side. The first one, can you tell us what kind of price increases you have implemented in the EMEA and North America for 2022? And do we expect -- do you expect these price increases to offset the carryover impact from sea freight and raw materials this year? My second question on Supor. Can you give us more details on the second sale -- organic sales growth acceleration compared to Q2 in Q3? Is it purely company-specific? Or is the Chinese market also accelerating, recovering quickly now? And I know we are testing full year '21 sales, but what's your view on the outlook for 2022, especially in H1, considering that the comparison basis will be extremely tough? Do you see some top line driver that will continue to support your revenue growth in 2022?

It's very early to talk about 2022. So as you expect, I will not really answer that question, leave us a bit of time to come back to you. Supor Q4 performance is in a pretty steady market context, not better, not worse than the previous quarters of the year. As I said, Supor's performance is primarily the ability to sell the right offer and the right innovation at the right price per channel. And I think this Q4 performance is a testimony of that ability. When comparing with the Q2 and Q3, we told you back in September that we are not concerned by the Q3 performance. I think there were comp matters. So we see a pretty steady performance of Supor, delivering around about 10% growth profitable throughout the year. When it comes to price increases, we don't disclose details of our price increases. We are facing headwinds like everybody in our industry. What I can say is that we have a series of weapons or tools to offset price increases -- to offset, sorry, headwinds. We have, of course, price. We have promotional activity. We have a mix. We have mix being product and geographies. We have, of course, productivities and factories and the plant absorption. So we try to contain price increase as much as we can because we want to maintain the accessibility of our products. But our priority is to maintain our margin levels. We've been doing that, I was going to say for the last year, but Thierry de La d'Artaise was reminding me that we've been doing that for the last 20 years. And hopefully, we'll be able to do that for the next 20 years.

Our next question comes from the line of Cédric Rossi from Bryan Garnier.

I have 2 questions. The first one is coming back on the performance of the Professional business. Have you seen some -- have you faced some delayed orders with regard to the Q4 performance due to any supply chain disruptions? And maybe do you expect some orders to shift to Q1? That's my first question. And the second one is coming back on China. So if I understood correctly, you did not benefit from the Chinese New Year yet in Q4. And so how do you see the start to the year in China? And so I assume that given the successful Double 11, so the final demand is reassuringly good. So how do you see the start to the year in China?

Maybe I will first start answering your question regarding Chinese New Year. So you know that this impact is not as strong as it was in the past years, basically because the business model is changing in China. As I said, we have more and more sales delivered through e-commerce on 9 channels with business models where we have direct revenue recognition, i.e. we're not selling to a distributor than selling on its side to end consumers. So for Chinese New Year, we are selling now very close to the actual date of the Chinese New Year. However, we still have some traditional distributors. And some of them, not because of Chinese New Year, but more because of the current sanitary situation in China may have anticipated a little bit their orders at the end of December, just to avoid being out of stock in case some distribution or some transportation issues they would have to face because of a sanitary constraint in China. So that would be for China. And then performance in the Professional segment. No, we haven't seen some delayed orders related to supply chain issues. Actually, the way we supply components to manufacture our coffee machines is a bit different when compared to the Consumer segment. We have a higher level of inventory for components because they're not so easy to supply. So we have not been really impacted by supply chain issues in this area, all the more so that most of the production is made in Europe for Europe and in U.S. for U.S., so not a lot of impact on freight as well regarding the Professional segment.

[Operator Instructions] Our next question comes from the line of Alessandro Cecchini from Equita.

Hello everybody...

We can't hear you.

We can't hear you, Alessandro.

Can you hear me? Hello? Hello?

Yes, it's better now. Thank you.

Okay. Okay. Sorry. So my first question is about actually, I don't know that you don't ask for -- about 2022, but sort of only on a qualitative way, what are the areas, geographical areas or product categories that you see much better than other in 2022. So just to better understand where are the main spots most dynamic for next year. The second question is about if you could elaborate a little bit more on the level of stock that you see in the trade by geography. And finally, on margin, if you could elaborate a little bit more the answer that you provided to the first question about your targets or your, I mean, aim to offset current headwinds.

Well, I can confirm the answer to the third question, which is we use pricing to offset in part the headwinds that we are facing. Pricing is one, but it's not the only one. And we've been saying consistently since the start of this surge of inflation and the headwind cost that we would be using a variety of measures to offset those, and we'll keep doing that through 2022. Now your first question on what products, what categories, what areas? I think it's a very, very question. The reality of the group is that we have a growth that is extremely balanced between countries, between categories, between channels. And we think that this balance of levers is actually a fantastic asset. We've seen in 2021 that most of these levers have been in positive territory, and we strive to make sure that this growth through a series of balanced levers keeps developing the same way. So I would say it is intrinsic to our strategy to not point a specific category, a specific market or a specific product. Your second question was on the level of inventory in trade. It is potentially -- probably a bit higher than it was in 2022 (sic) [ 2021 ] where it was fairly low. We don't see any area of concern one way or another about the level of inventory trade. It's a pretty vague question because the supply chain leaves a lot of disruptions. You hear about harbors being congested. You'll hear about lack of truck drivers. You'll hear about all these issues. And therefore, the validity of our supply to our trade customers is much lower than it usually is. So it's very difficult to give you a firm feel of stock in trade. We don't see it remarkably high or remarkably low.

The next question comes from the line of Mourad Lahmidi from BNP Paribas.

It's Mourad Lahmidi from BNP Paribas. So I have 2 questions. First one, I'm wondering how immediate you reflected the raw material swings in European. So we're seeing the headwind now is in your guidance over the past year. So I'm just wondering if raw material prices and input costs basically freight stay where they are. So basically, they have been receiving in the past few months. Is it fair to expect a lower raw material headwind in 2022 relative to 2021? So this is the first question. And the second question is related to the level of stock in the trade that we already asked. Just if you could be kind and characterize the sell in, sell out dynamic that you've seen in Q4 and probably since the beginning of the year.

I'll take the second one because we don't have yet the firm sell in, sell out for the Q4. We have -- we are on the 23rd or 24th of January, it's pretty early. Panels are not out yet. Our sale of data from customers are not out yet. So we don't have any information at this stage. What we can say is we don't see a massive change in stocking trade at the end of Q4. Nathalie?

Yes, on headwinds, so maybe first starting with 2021. So we haven't changed that much our vision, the vision that we have today versus the one that we discussed with you when we issued Q3 sales. Then moving forward, again, a bit difficult for you -- for us to give -- to share our vision on 2022. We still see that freight gets at a high level in terms of prices. But we do not see in comparison to what happened in 2021 pricing going up. So that's the difference. And then it's a bit early for us. And I think even for carriers and freight, forward is to tell what will be the average price in 2022. But at least this is what we are seeing currently. Regarding raw mat, I think that you are looking at the forward as we do. And if we look over the past 18 months and if we look at the forwards, obviously, forwards are much higher when compared to the average prices that we were experiencing in the past. So there will be an impact on raw mat, but a bit too early to comment on that.

Our next question comes from the line of Marie Fort from SG.

The first concern China, where you achieved a very good performance in Q4. Would it be possible to have the underlying trend excluding the Double 11 impact? My intention there is to estimate the part of your growth that you can -- that could be recurring over the next financial year. Also in China, do you see any impact from the resurgence of COVID there, either in terms of operational fluidity or also in demand? I've got also another questions concerning the part of your sales online. Could you tell us how much you estimate you have achieved with your online? And also how has evolved your DTC sales? And my last question is, how do you anticipate the momentum of new product launches in 2022? Do you plan, for instance, to invest in your category?

Maybe on your first answer on China underlying trend, excluding Double 11, well, that's -- I wouldn't dare go into making an evaluation because Double 11 is not any longer 1 day. It is 10 days at least or a month. And in fact, the sales calendar in China is paced by those events. We know Double 11, but there are plenty of others. So I wouldn't take out or de-out the activity during this event or that event to evaluate the underlying trend. Like I said, in China is that the growth has been building strength on strength through the quarters and the questions that were asked in Q1 and Q2, particularly regarding sales performance in China have been answered by the Chinese teams through the second half of the year, and we don't see any reason why this shouldn't continue. When it comes to the COVID impact, we hear here and there some disruptions of COVID impact or some [indiscernible]. We are able through a strong network of factories or warehouses or suppliers to weather those impacts, and we haven't seen in Q4 any impact in COVID that is material and worth talking about, and we don't expect any in the months to come, obviously, with what we know today. It's a very difficult to forecast of provisions on the Chinese -- on the COVID evolution. Our online sales have kept progressing. It's a bit early to give you statistics, but we expect online in 2021 to have made more inroads in terms of their weight in our sales. We don't have a number yet, but it's going to be anywhere between 2 and 4 points extra weight in our sales mix, profitable. We don't have any negative mix impact coming from the online channel compared to the off-line channel. Your last question is on our direct to consumer. We have a pretty stable direct to consumer off-line business. I'm talking offline. In positive, we've opened over 59 stores in 2021 in negative Germany, which is one of the big contributors in terms of number of stores has been under locked down for the best part of 6 months, 5.5 months, I think. So that performance is positive. When it comes to direct-to-consumer, we are establishing our sites. We're establishing our network of warehouse, ordering management system in several -- in many countries. It's a bit early to comment that performance. It's not material enough yet that it deserves a specific comment.

The question comes from Sarah Thirion from TP ICAP.

My first one has been already answered. It was about the manufacturing issues that you could have had in Asia regarding to Omicron. So I have a part of the ante. As far as I remember, when I talked to -- with Isabelle in December, you had sufficient stocks to end correctly the full year of 2021 in Asia. And I was wondering if you could give us a little more color on the stock that you have, and how you think you can deal with that in case there is issue -- there are issues, sorry, on the manufacturing side at Supor or outside of Supor. The second question is about StoreBound. It was a very exciting presentation that you made about that story. And I was wondering what is now the timing for the development of StoreBound outside of the U.S. My view is that it could match, I guess, the millennials in China demand. So I'm wondering if there is a plan to propose StoreBound products to Chinese soon or later.

Okay, Sarah. Nathalie here. I will take the first question regarding the level of inventory. So we have commented throughout the year that we were making bets regarding the level of inventory we have and that we are preferring to have more components and more finished goods in the stock than not be in a position to serve our customers. So this is a fully -- a decision that we have fully implemented. This is how we have managed to deliver the level of sales and the growth in 2021. So, I would say, the counterpart is that we have a bit more of inventory than maybe what we would have expected. But thanks to that level of inventory, we've been there when customers were asking for goods. So we are starting the year with a fair level of inventory. And we think that we will not be impacted at least in the first half by a potential manufacturing issue that anyway we don't know yet. So we don't think that we should have an impact for that, at least for the first 6 months. And then I will leave the floor to Stanislas for StoreBound.

Yes. Thank you for your question. I can feel your impatience. StoreBound is a fantastic -- it's a fantastic acquisition. I think the growth is over 30%. I was going to say for a second consecutive year, but in fact, it's fully multiplied by 15%, 20% in 2 years. So it's a fantastic story. It's a business that is developing on very sound ground, building communities, building a very strong trade franchise online and off-line, building strong credentials with a few hero products. And we are learning every day with them, what it takes to work with millennials and to build brands in millennials. StoreBound in China is a great question. I think we have our own agenda of developing these western side products or kids brands or baby brands with the Supor brand in China. Supor is a very, very strong brand in the Chinese market. So we are, of course, constantly thinking and evaluating that opportunity. But today, it is not on our direct agenda in terms of using the Dash brand in China. What I can say is that the learnings of StoreBound are far-fetched and go way beyond the United States. They -- in fact, in a positive way the entire group way of doing marketing and digital marketing.

So that was our final question, so I'll hand you back over to the hosts.

Well, if you have no further questions, I would like to thank everyone for attending this call. It's been a pleasure sharing those results with you, of course, and more importantly, being able to deal and tackle your questions. Our next appointment is on the 25th of February 2022, where we will disclose the full year financial results for 2021. In the meantime, I wish you all a great evening, and thank you for participating.

Thank you very much for joining today's call. You may now disconnect your handsets. Hosts, please stay on the line. Thank you.