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L’Occitane reports unaudited quarterly financial results

L'OCCITANE

L’Occitane International S.A., an international group that manufactures and retails beauty and well-being products that are rich in natural and organic ingredients, announced the unaudited quarterly update for the period ended 31st March 2020.

SEE ALSO : L Brands reports first quarter 2020 results

Despite the rapid development of the COVID-19 pandemic in the last few months, the group still registered three strong quarters in FY2020. Net sales in the year ended 31st March 2020 were $1,792.9 million, an improvement of 12.8% at constant rates and 15.2% at reported rates compared to last year.

The group maintained good sales momentum in January 2020, but its business operations in the subsequent two months were seriously interrupted by restrictive measures imposed by governments around the world in response to the COVID-19 pandemic such as travel bans, lockdowns and shop closures mostly in China, Hong Kong and Japan. Its retail, travel retail and B2B channels were the most affected. On the other hand, e-commerce, marketplace, web partners and TV channels all posted significant growth and compensated for some of the decline in brick and mortar channels. Net sales for the three months ended 31 March 2020 were US$368.6 million, a decline of 1.6% at constant rates and 0.7% at reported rates compared to last year.

In FY2020 12M, Web Sell-out channels continued to excel and grew by 41.8% (including ELEMIS) at constant rates, equivalent to 19.0% of the total Sell-out sales. Excluding ELEMIS, sales growth of the group’s Web Sell-out channels accelerated to 21.8% at constant rates, equivalent to 16.8% of the total Sell-out sales.

Despite the impact of COVID-19, L’OCCITANE en Provence still delivered growth of 3.9% at reported rates in FY2020 12M, thanks to attractive product offerings online and offline, particularly during the festive season. ELEMIS remained robust throughout the year and grew more than 20% (unaudited), driven by its e-commerce and TV channels. Meanwhile, LimeLife and other brands grew by 1.2% and 2.5% respectively at reported rates.

In terms of geographic areas, the UK was the fastest-growing market in FY2020 Q4 with 164.5% growth, followed by the US with 14.4% growth. Growth in both these countries was driven by ELEMIS. Taiwan achieved growth of 5.6% in FY2020 Q4, thanks to its timely campaign that boosted sales of hand care products. Among the other geographic areas, Korea posted the fastest growth of 18.8% in FY2020 Q4, a result of the Group’s continuous success in marketplace campaigns especially for hand washes, hand creams and pillow mists.

The group is providing an update on the initiatives it is undertaking to manage the social and financial impact of the current COVID-19 pandemic.

Reinold Geiger, Chairman and Chief Executive Officer of L’Occitane, said, “The global COVID-19 pandemic is an extremely challenging period for all of humankind. We are committed to doing everything we can to meaningfully support healthcare authorities and healthcare workers around the world. We also take the welfare and safety of our workforce and customers extremely seriously and we are following the advice and guidance of local authorities closely. I continue to be inspired by the resilience and solidarity shown by our team in donating hand sanitizer and other hygiene products to support the global relief effort, in line with our corporate values, while still maintaining
our day-to-day operations.”

In the current situation, the group stands firmly alongside the global community in the fight against COVID-19 and in the support of healthcare workers.

The group reassigned some of its manufacturing facilities in Manosque to the production of hand sanitizer, and has donated a million bottles of care products in support of healthcare workers.

In the face of the crisis, the group’s long-term contracts and pre-financing of 50–80% of cost before harvest is more valuable to our producers than ever, giving them the security of being able to sell their stocks and securing their revenues

The group implemented protective measures for its staff at a very early stage of the crisis and is complying with all recommendations and legal obligations to protect its employees’ safety and health.

Although close to 75% of the group’s store network is closed (throughout Europe, the Americas, as well as a majority of stores in Japan and Australia), the group is ensuring business continuity.

In view of the uncertain environment, the Group is applying a 25% reduction from base compensation for Directors and Senior management, reduction of dividends, renegotiating commercial rents, reducing staff costs through unpaid leave, optimizing marketing and promotion investments, delaying or cancelling store openings and
renovations.

SEE ALSO : Korean airline industry reports its first quarter 2020 results

Mr. Reinold Geiger concluded, “While it is too early to gauge how the COVID-19 pandemic will impact our ongoing performance, we are taking various steps to minimize the fallout from the very serious turndown in business. This includes optimizing our cost structure while ensuring that we maintain the capacity to resume growth as strongly as possible when the conditions allow. We believe that the inherent strength of our brands, our careful management and our passion for our work will lead
us back to growth in the future.”

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