Ongoing development of the Healthcare division
As part of its transformation plan “Transform To Accelerate – TTA 2.0”, Damartex
group announces the acquisition of 100% of the shares of Optimum Médical by
the holding company MSanté. MSanté was acquired by Damartex in July 2021
to expand its Healthcare division in the infusion and nutrition sectors.
Optimum Médical, based in the South of France, is a home healthcare service
provider (so-called PSAD), also specialised in infusion and nutrition.
This transaction should enable Optimum Médical to grow strongly, in particular
by benefiting from MSanté’s support in treatments for chronic diseases.
In addition, MSanté and the Damartex group will provide all the levers in terms
of know-how and resources to accelerate Optimum Médical’s development.
This operation is fully in line with the Group’s transformation plan.Damartex is
extending its national geographical coverage for home health services and
strengthening its Healthcare division, which is made up of :

• Sédagyl, homecare products distributor, present in France and in England.
• Santéol, a home healthcare provider specialised in respiratory assistance,
  present in France with a network of 6 agencies.
• MSanté, a home healthcare provider specialised in infusion and nutrition,
  present in France, in the West with 3 agencies, and now in the South with the
  integration of Optimum Médical.
  Optimum Médical, founded in 2017 by Sonia Zhar and based in Montpellier,
  expects a turnover of nearly €1.5m in 2021. The company already benefits from
  the trust of more than 800 patients who recognise the quality of service and the
  responsiveness of the teams in place.
  Optimum Médical will be integrated into the Damartex Group’s accounts from
  1 October 2021.

Acceleration of Business in Line with the Transformation Plan

For the 2020/21 financial year, the Group’s sales amounted to € 764.2 Mn, an increase of +11.4% at actual rates compared with the previous financial year (+11.6% at like for like exchange rates). After an upward trend in the first half of the year, the second half of the year saw a good recovery in business despite the continuing health crisis, with an increase of +20.5% (+20.4% at like for like exchange rates) at € 361.8 Mn. As a result, the Group’s annual activity is up +6.1% compared with the 2018/19 financial year, a period not affected by the health crisis.

In the 3^rd and 4^th quarters, business increased significantly compared with the previous financial year at +20.4% and +20.7% at actual exchange rates. In addition to the favourable base effect, the performance of all divisions exceeded expectations.

In the course of the Financial year, despite the sale of the Jours Heureux brand and the discontinuation of the La Maison du Jersey and Delaby brands,
the “Fashion ” and “Home & Lifestyle” divisions have shown good resilience with increases of +11.0% and +8.3% respectively. The “Healthcare” division saw significant growth of +42.1% at €31.5 Mn.

Fashion division

Sales for the Fashion division amounted to € 555.1 Mn over the financial year, up +11.0% at actual exchange rates.

Over the financial year, Damart’s turnover increased by +14.9% at actual exchange rates at € 439.5 Mn, driven in particular by France and England. As part of its transformation, Damart successfully continues to adapt and modernize its offer.

Over the year, Afibel remained stable thanks to a last-quarter growth of +19.3%. The brand is benefiting from the initial effects of its repositioning and a new commercial strategy in England. 

Home & Lifestyle division

The “Home & Lifestyle” division, dedicated to the comfort and well-being of seniors, grew by +8.3% at actual exchange rates over the year, with revenues of € 177.7 Mn.

The division’s growth was mainly driven by the very good performance of the Coopers of Stortford brand, whose business grew by +43.3% over the year at actual exchange rates. Vitrine Magique also experienced a strong acceleration in its sales in France, with an increase of +16.7%.

Healthcare Division

The “Healthcare” division, which focuses on home healthcare services (So called PSAD) and the distribution of homecare products, grew strongly during the year, with revenues up +42.1% at €31.5 Mn.

This increase was due to the integration of Santéol over the full year, the acquisition of Eden Médical in the Île-de-France region and the continued dynamic growth of Sedagyl, which rose by +24.8%.

In addition, on 20 July 2021, the Group announced the acquisition of MSanté, a home healthcare service provider (so-called PSAD) specializing in infusion and nutrition. The Group intends to eventually cover the entire country with Santéol for respiratory assistance and MSanté for infusion and nutrition, with the aim of accelerating the development of the Healthcare division.

In an unprecedented environment, the Group successfully continued to implement its “Transform To Accelerate TTA 2.0” transformation plan. The strong growth in e-commerce of +47.0% at €137.9 Mn, the development of new markets in the Healthcare and Home & Lifestyle divisions, and the turnaround in the Fashion division as a result of the ongoing modernization of the brands, confirm the strategy undertaken.

The marked increase in sales will have a positive impact on the result, without reaching the proportions of the first half of the year, as the Group has chosen to invest in a more favourable context.

As part of its transformation plan, “Transform To Accelerate – TTA 2.0”, the Damartex group announces the acquisition of 80.0% of the shares of MSanté by Damartex S.A.

MSanté is a home healthcare service provider (so-called PSAD), specializing in infusion and nutrition. It was created in 2013 by Stéphane Freche, who remains a shareholder in the company with 20% of the capital. The head office is located in Granville in the Manche département in France.

The team, made up mainly of nurses and nutritionists, is recognized by the main hospitals in western France, and coordinates the implementation of homecare programmes for over 2,000 patients. The company boasts a turnover of €1.5 Mn and 3 agencies, located in Caen, Nantes and Rennes (France).

In accordance with the integration strategy of the Damartex group, Stéphane Freche and his team will keep the management of the company autonomously in order to ensure its development, while benefiting from the skills and support of the Damartex teams.

DEVELOPMENT OF THE HEALTHCARE DIVISION

The Damartex group is thus strengthening its Healthcare division, which now consists of 3 brands in high-growth businesses:

• Sedagyl, a retailer of homecare products, which is present in France and in England. The expansion of the “health” product offering and the acceleration of digital technology are at the core of the company’s development;
• Santéol, a home healthcare service provider (so-called PSAD), specializing in respiratory assistance, and which is present in the Grand Est, Ile de France and Mediterranean regions of France, with a network of 6 agencies; and
• MSanté, a home healthcare service provider, specializing in infusion and nutrition, which is present in the west of France with 3 agencies.

For the home healthcare business, the Group’s aim is to cover the whole of France for the two brands separately, either through organic growth with the opening of new branches, or through external growth.

MSanté will be integrated into the Damartex Group’s accounts as of 1 July 2021.

Acceleration of the Growth Momentum to +20.4% for the 3^rd quarter

Damartex closes the third quarter with +20.4% growth at actual exchange rates (+20.8% at like for like rates) with a turnover of €195.2 Mn. This increase confirms the good business momentum observed in the first two quarters of the financial year, which were up +1.3% and +6.2% respectively at actual exchange rates. Although the Group benefited from a favourable base effect, this good performance was achieved in an economic context that remained deteriorated (with health measures, or closed stores in several markets). These good results reflect Damartex’s willingness to continue to invest in order to increase its turnover. This is particularly the case in the e-commerce channel, where the digital acceleration is reflected in a +75.6% growth in business over the third quarter and +60.9% for the first nine months of the year at actual exchange rates.

Over the first nine months of the year, Damartex has recorded a clear improvement in sales of +9.0% at actual exchange rates (+9.5% at like for like exchange rates) to € 597.5 Mn. This increase is significant in all divisions and all distribution channels.

Sales for the “Fashion” division came to €436.0 million for the first nine months, up by +5.6% at actual exchange rates (+6.0% at like for like exchange rates). In the third quarter, sales improved by +18.4% at actual rates (+18.7% at like for like exchange rates).

Over the quarter, growth was driven mainly by Damart, with growth of +29.5% at actual exchange rates (+29.9% at like for like exchange rates). This momentum demonstrates the positive impact of the modernization strategy and the marketing investments made. In France, sales rebounded by nearly +25% at actual exchange rates across all distribution channels (stores, mail order and web). In Belgium and the United Kingdom, business remained solid with increases of +20.1% and +50.2% respectively at actual exchange rates.

Afibel’s business, down -8.5% at actual rates over the last three months, continues to be impacted by its transformation. At the end of the period, the brand unveiled its new positioning accompanied by a media campaign whose first effects are expected in the next financial year.

Sales for the “Home & Lifestyle” division came to € 137.9 Mn, up +16.5% at actual exchange rates (+17.2% at like for like exchange rates) over the first nine months. Sales for the second quarter amounted to € 48.8 Mn, a sharp increase of +25.2% at actual exchange rates (+25.8% at like for like exchange rates).

This rebound can be explained in particular by digital and marketing investments aimed at highlighting the renewal of the offer and increasing the share of the Web in the sales mix. Thus, over the quarter, while Coopers of Stortford recorded growth of +75.3% at actual rates, the 3Pagen-Vitrine Magique brand increased its activity by +15.4% at actual rates.

The “Healthcare” division, which includes the Sedagyl and Santéol brands, posted sales of €23.6 Mn, up by a significant +40.1% at actual exchange rates (+40.7% at like for like exchange rates over the first nine months). For the quarter, sales rose by +28.4% at actual exchange rates (28.7% at like for like exchange rates) to € 8.2 Mn. This momentum is being driven by both brands, including Santéol, which has benefited from the effective integration of Eden Médical since 1 January 2021.

Outlook

The latest publications for the current financial year demonstrate the Group’s strong ambition, through the implementation of its strategic plan: “Transform to Accelerate 2.0” to return to growth thanks to a strong positioning in the silver economy segment.

The Group is continuing its efforts to implement its strategy to generate profitable growth. However, it remains cautious in view of the health situation which is still tense.

Continued Transformation and Development

ACTIVITY

Sales for the first half of the year came to €402.3 million, up +4.2% at actual rates compared with the same period last year (+4.7% at like for like exchange rate).

Sales for the “Fashion” business came to €297.8 million, a slight increase of +.6% at actual rates. (+1% at a constant exchange rate). After a decline in activity in the first quarter of 2020-2021, due to the impact of the health crisis and restrictive measures, the division recorded a sharp rebound in the second quarter (+2.6% at actual rates). This momentum observed in the first half of the year, was driven in particular by the Damart brand (+1.5% at actual rates) mainly due to the excellent performance of mail order. The “Home & Lifestyle” business continued to grow at a dynamic rate of +12.2% at actual rates (+13.0% at like for like exchange rate) for €89.1 Mn of turnover. The division also returned to excellent momentum in the second quarter (+14.4% at actual rates) driven by the favourable reception given to the renewed Coopers of Stortford range, as well as strong growth in the 3Pagen and Vitrine Magique brands.

Finally, the recently created “Healthcare” division, dedicated to healthcare activities, confirmed its objectives with an increase of +47.3% at actual rates (+48.1% at like for like exchange rate) with a turnover of €15.4 million. This growth is supported by the two brands that make up the division: Santéol (integrated in 2020) and Sedagyl.

RESULTS

The operating EBITDA closed with a significant increase to €26.6 Mn (compared with €11.5 million in the previous financial year). This performance is explained by the rebound in activity recorded mainly in the second quarter of 2020, combined with a careful policy of cost control, particularly in marketing, in order to prudently address a deteriorated market environment.

The current operating income (so-called ROC) therefore shows strong growth at €15.3 million (compared with €2.4 million in the previous financial year). This performance applies to all the “Fashion”, “Home & Lifestyle” and “Healthcare” divisions, with a ROC of €8.5 Mn, €5.4 Mn and €1.4 Mn respectively. Net earnings stand at €11.1 Mn (compared with €1.9 Mn for the previous financial year).

Damartex thus returned to a good level of profitability in the first half of the year, confirming the trend initiated in the 2019 financial year.

FINANCIAL POSITION

The net financial position stands at €+17.9 Mn (against €-42.5 million in the previous financial year). This increase is the result of the growth in activity and is mainly based on two levers:

• the taking into account of the exceptional capital increase of €33.9 million; and 
• the excellent management of working capital requirements (€-9.9 Mn compared to €31.8 Mn in 2019) despite an extremely volatile environment due to the health crisis. This performance is the direct consequence of the efforts undertaken in axis 4 of the transformation plan (priority to agility).

The Group’s financial strength enables it to accelerate its transformation plan and pursue an opportunistic external growth policy in line with its development ambitions in the Silver Economy market.

OUTLOOK

This commercial performance, despite the health crisis context, combined with a reinforced financial soundness, are solid assets to address the future. Damartex is thus proactively pursuing the deployment of its TTA 2.0 transformation plan, particularly on the digitalization aspects, enabling it to address the challenges of the Silver Economy market. However, the Group remains cautious in view of the remaining uncertainties related to the novel coronavirus epidemic

Performance in line with the transformation plan

Damartex ended the first half of the 2020/2021 financial year with sales of € 402.3 million, up +4.2% at actual exchange rates (+4.7% at like for like exchange rate). Second-quarter sales rose sharply by 6.2% at actual exchange rates to € 247.2 million. (+7.0% at like for like exchange rate).
The Group experienced sustained growth, the first visible effects of the
implementation of the “Transform to Accelerate 2.0” (TTA 2.0) plan. This growth was driven in particular by the strong increase in e-commerce (+54.2% at actual exchange rates over the half year) and the increase in mail order sales. Both channels benefited from a circumstantial “Covid” effect, but this change in consumption patterns is more of an acceleration than a transitory effect.
The retail channel, on the other hand, experienced a slowdown in sales during periods of lockdown. Following the relaxation of these measures in its main markets, Damartex benefited from a strong recovery inconsumption in December 2020.

Sales for the “Fashion” division came to € 297.8 million for the first half of the year, a slight increase of +.6% at actual exchange rates (+1% at like for like exchange rate), driven in particular by a +2.6% increase in sales at actual exchange rates in the second quarter (+3.3% at like for like exchange rate).
Over half year, Damart brand sales rose by +1.5% at actual exchange rates.
(+2.0% at like for like exchange rate) driven by the excellent performance of
mail, particularly in France and the United Kingdom. Sales in Belgium were
nevertheless significantly impacted by the closure of stores, which remain the main distribution channel.

Afibel’s activity was down -3.7% at actual rates. This downturn is in line with expectations and reflects the initial output of the strategic repositioning, the full effects of which is expected by the Group in the coming seasons.
The “Home & Lifestyle” division continued its solid growth with sales of € 89.1 million, up +12.2% at actual exchange rates (+13.0% at like for like exchange rate). Second-quarter sales came to € 53.2 million, up sharply by +14.4% at actual exchange rates. (+15.8% at like for like exchange rate).
Over the half year, Coopers of Stortford, a brand present exclusively in the
United Kingdom, recorded a +59.0% increase in sales. (+63.1% at like for like
exchange rate). This over-performance is the result of the continued renewal of its range, digital acceleration and a supply closer to its markets allowing for greater responsiveness.
The 3Pagen and Vitrine Magique brands, whose sales in the 1st quarter were hindered by a delay in the sales plan, rebounded strongly in the 2nd quarter and posted +5.0% growth at actual exchange rates in the first half.
The “Healthcare” division, posted first-half sales of € 15.4 million, up +47.3% at actual exchange rates. (+48.1% at like for like exchange rate). This increase is explained by the integration of Santéol, whose activity is in line with the Group’s objectives, as well as by the good performance of Sédagyl, which posted strong growth of +8.3% at real rates (+8.8% at like for like exchange rates).

Damartex announces the launch of a capital increase of its shareholders for a gross amount of approximately 29.5 million Euro, which can be increased to 33.9 million Euro if fully exercised.

L’Autorité des marchés financiers (AMF) approved the Prospectus relating to this operation on September 30, 2020.

Since its creation in 1953, Damartex has developed by focusing on the senior market (Silver Economy) in France and then in Europe around strong values: social responsibility, respect, empathy, team spirit, innovation and entrepreneurship !

 Its business model is structured around three distinct and complementary activities – Fashion (ready-to-wear), Home & Lifestyle (home, decoration), Healthcare (health) – based on eight strong brands.

The seniors market: a market undergoing profound change and with strong growth potential

Damartex operates in a fast-growing market, driven by the aging of the population (population over 65 expected to reach 28.5% by 2050 against 20% in early 2018 in Europe – Eurostat), a trend heading for extend life at home as well as an increase in consumption.

The Covid-19 health crisis and the effects of containment have accelerated the digitalization of consumption habits and highlighted the ever-increasing need for health services, particularly at home.

Damartex has been committed since 2018 in a transformation plan, Transform to Accelerate, aiming to restructure its business model around 5 strategic axes :

– IMAGE REVOLUTION: modernization of the brands and customer experience to provide a more appropriate response to the new consumption behaviors of seniors.

– DIGITAL TRANSFORMATION: prioritizing investments in digital to capture the growth potential offered by e-commerce

– NEW BUSINESS DEVELOPMENT: accelerating the growth of Home & Life Style and Healthcare, high-growth market segments

– PRIORITY TO AGILITY: optimizing the multi-channel distribution strategy and strengthening operational synergies between the different divisions

 – CHANGE OUR WORLD: placing responsibility at the heart of the Group’s development policy.

In order to regulate its economic situation, Damartex has strategically refocused its brand portfolio to provide a response adapted to the expectations of seniors and thus conquer the Silver Economy.

Today, the proceeds of the Capital Increase will be used to provide the Company with additional resources to accelerate the deployment of its strategic plan Transform To Accelerate 2.0 for :

• Capture the immense growth potential of the Siver Economy

• to ensure ROCE and financial independence based on a sustainable and profitable business model

• to create careers while offering a respectful, motivating and creative work environment

Half of the net proceeds of the Capital Increase will be used to finance the external growth of the Healthcare division and the balance will be used to finance the acceleration of the implementation of the five strategic axes.

In the event that the Capital Increase is limited to 75% of the expected amount, the Group will reduce its external growth ambitions as a priority.

Are you interested? Find the main terms and conditions of the operation in the official document (french version) :

The Company’s shareholders are informed that an Extraordinary General Meeting will be held on Thursday 16 July 2020 at 2:30 pm.

Against the backdrop of the Covid-19 epidemic and in compliance with health measures to contain the epidemic, the Management Board decided at its meeting of 28 May 2020 to hold its General Meeting in camera without the physical presence of shareholders at the Company’s headquarters.

No admission card will be issued. Shareholders are invited to participate in the General Meeting by voting by mail, by giving a Power of Attorney to the Chairman of the General Meeting or by giving a proxy to a third party (in accordance with statutory provisions) by using the form provided for this purpose, which can be downloaded from the company’s website (www.damartex.com).

The precise procedures for voting by mail or by proxy will be described in the prior notice and the notice of meeting.
The notice prior to the General Meeting, including the agenda and the draft resolutions to be submitted to the shareholders’ vote, will be published in the Bulletin des Annonces Légales et Obligatoires (BALO) on 10 June 2020. The notice of meeting will be published in the BALO on 1 July and in a legal gazette.

On this occasion, the shareholders will be invited to vote on the completion of a proposed capital increase with preferential subscription rights as part of the “Transform To Accelerate 2.0 ” strategic plan communicated today. Preparatory documents and information for the Meeting will be available for viewing and downloading from the Company’s website: https://damartex.com/informations-reglementees/

PROFILE
The Damartex Group, one of the leading European distributors for seniors, aims to become the European leader in the silver economy. It includes three divisions:
• “Fashion” – Damart, Afibel, La Maison du Jersey, Xandres
• “Home & Lifestyle”, 3 Pagen, Vitrine Magique, Coopers of Stortford, Jours Heureux, Delaby
• “Healthcare”, Sedagyl and Santéol
The Group mainly operates in Europe, including in France, Great Britain, Belgium and Germany.

www.damartex.com

CONTACTS
Damartex: Bruno Defache
Tel: +33 3 20 11 45 30
bdefache@damartex.com
Shan: Alexandre Daudin
Tel: +33 1 44 50 51 76
alexandre.daudin@shan.fr