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Tuesday, 24 January 2017, 18:05

HIGHCO : Q4 2016 Gross Profit

Paris, 24 January 2017 (6pm)

HIGHCO SHOWS REMARKABLE GROWTH IN 2016: GROSS PROFIT UP 11.8% LFL

Very strong growth in 2016

  • Q4 2016 gross profit1 of €20.66 M, up 6.2% on a restated basis2 and 5.5% LFL3.
  • 2016 gross profit1 of €81.06 M, up 12.6% on a restated basis and 11.8% LFL.
  • Strong growth surge for digital businesses: Q4 up 12.9% LFL, 2016 up 23.6% LFL.
  • Substantial growth in France: Q4 up 11.3% LFL, 2016 up 15.7% LFL.
  • Good annual performance in Belgium, despite an unfavourable comparative base in Q4 (growth of 21.6% in Q4 2015). Q4 down 6.8% LFL, 2016 up 3.6% LFL.

Disposal and investment

  • Closing under way on the sale of the joint venture POS Media in Central Europe.
  • Investment in another capital increase in Yuzu USA.

Guidance confirmed for improved profitability in 2016

  • 2016 headline PBIT before performance share plans4 estimated of more than €14 M.
  • Sharp rise estimated for 2016 headline operating margin before performance share plans4 (> or = 17.3%).
Gross Profit (in € M)1 2016 2015
restated2
2015
LFL3
2016/2015
Change restated2
2016 / 2015
LFL3 change
Q12 19.51 16.99 17.05 +14.9% +14.4%
Q22 21.76 18.50 18.68 +17.6% +16.5%
Q3 19.13 17.01 17.18 +12.5% +11.4%
Q4 20.66 19.47 19.60 +6.2% +5.5%
Annual total 81.06 71.97 72.51 +12.6% +11.8%

1 Data currently being audited.
2 In application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the businesses in the United Kingdom were classified and presented as discontinued operations as of the third quarter of 2016. For reasons of consistency, the data reported for 2015 and the first half of 2016 have been restated to account for the impact of the UK businesses. Net income and the loss on the sale of these businesses will be presented net of tax as a single item in the consolidated income statement under Net income from assets held for sale or discontinued operations.
3 Like for like: Based on a comparable scope (i.e. including CapitalData over 11 months in 2015 and 2016) and at constant exchange rates (i.e. applying the average exchange rate over the period to data from the compared period).
4 Headline PBIT before performance share plans: Profit before interest, tax and restructuring costs and before the cost of the new performance share plans. Headline operating margin before performance share plans: Headline PBIT before performance share plans/gross profit.

Didier Chabassieu, Chairman of the Management Board, stated, "I'm very proud of the work our teams have accomplished since 2013. It has made the strategy to digitise our offers and businesses pay off. Digital now represents 46.6% of the Group's gross profit and drove the Group's like-for-like growth to a historic level of 11.8% in 2016. This high growth has also brought a significant improvement in profitability. Moving forward with our strategy to refocus our International business on the digitisation of our solutions, we expect - following the disposal of our UK subsidiary in October 2016 - to wrap up the sale of our stake in POS Media in Central Europe by the end of the first quarter of 2017."

STRONG GROWTH IN DIGITAL BUSINESSES IN 2016

With like-for-like growth of 12.9% in Q4 2016, Digital has enabled the Group to maintain its strong quarterly growth. The share of digital business increased from 45.8% in Q4 2015 (restated for the United Kingdom) to 49.4% in Q4 2016. Offline businesses fell slightly over the quarter (down 0.9% like for like). As a result, the Group posted further business growth in Q4 2016, up 6.2% on a restated basis and 5.5% like for like to €20.66 M, for a 15th consecutive quarter of organic growth for HighCo.

In 2016, digital businesses grew 23.6% on a like-for-like basis, and the share of Digital increased from 41.7% at the end of 2015 (restated for the United Kingdom) to 46.6% at the end of 2016. HighCo has therefore met its target of Digital businesses representing a share of more than 45% of the Group's total business in 2016 and remains on track to reach a share of 50% in 2017. Offline businesses showed like-for-like growth of 3.2% over the year. The Group's gross profit totalled €81.06 M for 2016, up 12.6% on a restated basis and 11.8% like for like, for a fourth consecutive year of organic growth for HighCo.

Revenue for 2016 amounted to €155.5 M.

Driven by Digital, France posts robust growth for 2016

Up 11.3% like for like in Q4 2016, France continued its double-digit growth with gross profit of €14.67 M, representing 71% of the Group's gross profit. This gain was again driven by Digital, which rose 19.6% like for like over the quarter, with the significant expansion of In-store businesses and the strong performance of fully digital Drive to Store businesses.

In 2016, gross profit totalled €56.22 M in France, rising 15.7% like for like. Digital businesses grew 28.9% like for like over the year, and their share in gross profit reached 55.4%.

International: Strong performance in Belgium

Despite a like-for-like drop of 6.8% in Q4 2016, due to the essentially unfavourable comparative base (growth of 21.6% in Q4 2015), gross profit in Benelux for this period totalled €5.77 M, representing 27.9% of the Group's gross profit. With like-for-like growth of 3.6% and gross profit at €23.86 M, Benelux turned another positive performance in 2016.
Businesses in Southern Europe (Spain and Italy) remain strongly positioned, with annual like-for-like growth of 9.5%, representing 1.2% of the Group's gross profit in 2016.

DISPOSAL AND INVESTMENT

Planned sale of POS Media currently being finalised

After announcing in October 2016 that it had sold MRM in the United Kingdom and entered into exclusive negotiations to sell POS Media, which operates in Central Europe, the Group states that this deal is still in progress. It expects to finalise the disposal by the end of the first quarter of 2017. As a reminder, the deal would involve selling all shares owned in the Dutch company POS Media BV, representing 47.55% of its share capital. The Group expects the impact of this sale on attributable net income for 2016 to be practically zero and a slightly positive impact on the figure for 2017.

Yuzu USA: Increase in HighCo's stake from 20% to 33%

HighCo announces that it has invested in another capital increase in Yuzu USA, an innovative French-American start-up specialised in targeting solutions. Yuzu's exchange platform offers shoppers high-quality, value-added deals that are targeted and adapted to their shopping habits. The capital increase, reserved exclusively for HighCo and the company ZTP (Mulliez family), has led to HighCo's additional investment in the share capital of Yuzu USA, now reaching a 32.9% stake. This deal brings the Group access to a team of experts specialised in distributing ultra-targeted, customer-segmented offers to shoppers while strengthening its expertise in targeting, following the acquisition of CapitalData in early 2016.

CONFIRMATION OF IMPROVED PROFITABILITY FOR 2016

Based on the 2016 year-end closing in progress, HighCo projects headline PBIT before performance share plans4 of more than €14 M, i.e.:

      - an increase of equal to or more than 25% based on reported 2015 headline PBIT of €11.15 M;

      - an increase of equal to or more than 30% based on restated 2015 headline PBIT2 of €10.71 M.

Estimated headline operating margin before performance share plans4 is expected to rise sharply to equal to or more than 250 bp, i.e. equal to or more than 17.3% (14.8% reported for 2015).

Estimated net cash5, including working capital resources from the Data businesses, totalled more than €49 M at 31 December 2016 (€40.77 M at 31 December 2015).

The 2016 annual earnings will be released on 21 March after market close. A financial analysts' meeting is scheduled for 22 March at 2.30 p.m.

5 Net cash: cash (asset) minus gross financial debt (liability).

About HighCo

Since its creation, HighCo has placed innovation at the heart of its values, offering its clients - brands and retailers - Intelligent Marketing Solutions to influence shopper behaviour with the right deal, in the right place, at the right time and on the right channel.
Listed in compartment C of Euronext Paris and eligible for the "long-only" DSS, HighCo has more than 700 employees and since 2010 has been included in the Gaia Index, a selection of 70 responsible Small and Mid Caps.

Your contacts

Cécile Collina-Hue                                             Géraldine Myoux
Deputy Managing Director                                   Press Relations
+33 1 77 75 65 06                                              +33 1 77 75 64 67
[email protected][email protected]            [email protected]

Upcoming events

Publications take place after market close.

2016 Annual Earnings: Tuesday, 21 March 2017
SFAF financial analysts meeting: Wednesday, 22 March 2017 at 2.30 pm (location TBC)
Q1 2017 Gross Profit: Wednesday, 26 April 2017
Q2 and H1 2017 Gross Profit: Wednesday, 19 July 2017
2017 Half-year Earnings: Wednesday, 30 August 2017
Conference call on 2017 half-year earnings: Thursday, 31 August 2017
Q3 and 9-month YTD 2017 Gross Profit: Wednesday, 18 October 2017
Q4 and FY 2017 Gross Profit: Wednesday, 24 January 2018

HighCo is a component stock of the indices CAC® Small (CACS), CAC® Mid&Small (CACMS) and CAC® All-Tradable (CACT).
ISIN: FR0000054231
Reuters: HIGH.PA
Bloomberg: HCO FP
For further financial information and press releases, go to www.highco.com

This English translation is for the convenience of English-speaking readers. Consequently, the translation may not be relied upon to sustain any legal claim, nor should it be used as the basis of any legal opinion. HighCo expressly disclaims all liability for any inaccuracy herein.




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Source: HIGHCO via Globenewswire