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Answers |
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1 :
What do the letters SEB stand for? |
| The Société d’Emboutissage de Bourgogne (Burgundy Stamping Company), the name of the company in the early 50's when the Super Cocotte pressure cooker was introduced. |
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2 :
Is the founding family still involved in managing the Group? |
| The only member of the founding family still involved in managing the Group today is the Chairman and Chief Executive Officer, Thierry de La Tour d’Artaise. |
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3 :
Why is SEB SA listed on the stock exchange? |
| Groupe SEB has never gone to the market to raise new equity to fund its growth and has always financed acquisitions through debt, without ever jeopardizing its solid balance sheet. But in today’s actively consolidating small household equipment market, a public listing offers access to more sources of financing in case of acquisition, such as issuing new equity or facilitating share swaps, whilst also helping to offset any eventual dilution of the family shareholders’ stake. |
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4 :
Are you planning to develop online product sales? |
For consumer products companies like Groupe SEB, statistics show that online revenue generally represents only a small portion of total sales. So far, we’ve focused on developing relations with retailers rather than selling our products directly online. However, we haven’t taken an overly rigid or dogmatic position in this regard. Over the past two years, for example, we’ve noticed that sales generated via a variety of websites are experiencing somewhat faster growth, particularly in countries like Germany and the United Kingdom, even though the contribution of online business to consolidated sales remains marginal.
Nevertheless, the proportion of sales generated from alternative retailing channels (such as online sales, catalogue sales, proprietary stores and TV-shopping) is steadily increasing, to nearly 10% today.
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5 :
Are there still products that could be invented that would truly revolutionise the small domestic equipment or cookware markets? |
The trend towards commoditisation is not irreversible. On the contrary, it has had a collateral effect, which is the growth in demand for new, differentiated products that create value for customers and may have a true upmarket positioning. It’s our task to meet that demand with products that are more enabling, more ergonomic, more environmentally friendly and more attractive.
This focus on improvement has led to important new product concepts. Among our recent examples are the Actifry "oil-free" fryer, the ultra-quiet Silence Force vacuum cleaner, the Quick & Hot instant hot water kettle, the Espressaria fully automatic coffee maker and bread makers. All of these products provide new benefits for the consumer and they have proven very popular. We are leveraging their strong sales momentum to deploy them in international markets.
So there is still considerable potential for new discoveries that could be marketed worldwide. It’s up to us to invent the daily life of tomorrow. |
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6 :
You have a large portfolio of brands. Do you intend to keep them all? What’s your strategy in this regard? |
We have six global brands (All-Clad, Krups, Lagostina, Moulinex, Rowenta and Tefal) and 14 national/regional brands, which are all market leaders with strong identities. In a highly segmented small household equipment market, this brand portfolio gives us an important competitive advantage, enabling us to cover the entire market, from entry-level to premium. We are clearly committed to capitalising on this strength and therefore do not plan to eliminate any of the brands in the portfolio. |
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7 :
What about Groupe SEB’s environmental performance? |
Our environmental policies are intended to reconcile economic efficiency and social responsibility. That’s why our environmental management system has embraced eco-design and eco-production as its two priority objectives.
With the exception of Seb and Tefal—two special cases with significant stamping operations—our industrial processes are generally light and have only limited environmental impact. Our initiatives focus on recovering waste, reducing energy consumption, obtaining ISO 14001 certification for our sites, and recycling and reusing scrap products.
Our Annual Report presents all our environmental initiatives in a long, clearly identified section dedicated to sustainable development. It provides detailed information about the challenges we face, our initiatives and our improvement indicators. This information is also available on our website. |
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8 :
What is the principle of the environmental tax applied to domestic electrical equipment? |
| The directive on Waste from Electrical and Electronic Equipment (WEEE) integrates the principle of collecting and recycling end-of-life products when they’re ready for the scrap heap. All stakeholders in the process have a role to play, whether manufacturers, retailers, consumers or local authorities. The new tax in question is called the “visible fee.” Introduced on 15 November 2006 to finance the collection and recycling of end-of-life products, the fee is added to the selling price of new products. It is clearly marked (and will continue to be until 2011) so that consumers are aware of what they must pay for the recycling of a similar end-of-life appliance. It’s a set amount that varies from one product to another. The Eco-systèmes website (in French only) provides a wealth of information on the subject. |
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9 :
Who is the Group’s largest customer? What percentage of sales does it account for? |
| Carrefour is the Group’s largest account, representing around 8% of sales. Our ten biggest customers account for approximately 35% of revenue. |
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10 :
Is the Group planning to launch operations in India? |
| India is potentially a very large market for household equipment but it currently lacks an efficient, modern retailing structure. However, things are starting to change. We are watching the situation closely in order to leverage the development of a modern retail sector and are analysing potential targets in the country. |
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11 :
How big a share of the global small domestic equipment market is held by Chinese manufacturers? |
| It’s hard to estimate because we have access to very little reliable data. What we do know is that very few Chinese manufacturers hold a significant share of their local market. Many of them are specialised subcontractors, which makes estimates even less reliable. Clearly, however, for certain small electrical appliances, like filter coffee makers, kettles and toasters, China has become “the world’s factory,” manufacturing nearly all of these products. |
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12 :
What is Supor’s shareholder structure now that you’ve acquired a majority stake in the company? |
| We currently hold 51.31% of all shares, with the founders (the Su Family) and the Supor Group retaining a 36.26% stake and the public (investment funds and small Chinese investors) holding 11%. |
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13 :
Does Groupe SEB intend to increase its equity investment in Supor? |
| If we did, Chinese law would require us to launch a public tender offer for all Supor shares, which we will not do since there is a lock-up on certains shares until mid-2010 and we’ve made a commitment to the authorities to keep Supor listed. |
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14 :
What is required of a company listed on the Chinese market? |
| Companies need to have a quarterly reporting system, since financial statements must be released every three months, as well as a designated head of investor relations. The requirements are about the same as for a listed company in France. The fact that the company is listed ensures that the financial statements are audited regularly and that its investor relations are transparent. |
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15 :
Are you planning to relocate any R&D resources in China? |
| We feel that the close ties between R&D and process engineering give us competitive advantages that obviously will be maintained, notably in France. Moreover, Supor has R&D resources in China that are adapted to specific products and to the local market, and we fully intend to keep them, but we have no plans to offshore research and development operations to China. However, we have implemented a process of "cross-fertilization" between R & D teams within the Group, including Supor. |
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16 :
Will Supor’s integration into the Group result in plant closings in Europe, and more specifically, in France? |
The purpose of our equity investment in Supor is to enable Groupe SEB to develop in the Chinese market, not to offshore more operations. We have enough Chinese subcontractors for our business needs. There’s no reason to carry out a major transaction of this type just in order to subcontract more. So our investment in China will not result in the closing of production facilities in Europe. |
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17 :
Are other acquisitions planned? |
The Group has always alternated periods of organic growth and acquisitions. We are therefore constantly on the lookout for new opportunities that may arise, especially since our healthy financial position offers us leeway in this regard. We’ll always take a selective approach, however, primarily based on the strategic fit between products and geographic coverage.
The small household equipment market is still highly fragmented and the consolidation process now underway is expected to continue and perhaps gather momentum in coming years. New acquisition opportunities may emerge from the current crisis, but since no one can predict how long the recession will last or how serious it will be, we do not plan to make any acquisitions that could jeopardize the strength of our balance sheet.
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18 :
Groupe SEB bought back a large number of its own shares in 2008, to the extent that 8.6% of outstanding shares were held in treasury at 31 December. What do you plan to do with these shares and what will be your buyback policy in 2009? |
Like many other companies, we bought back a large number of our own shares in 2008 at what we felt were interesting prices, since we didn’t foresee the subsequent collapse in global stock markets. In practice, shares bought back on the market are intended for allocation of stock options and possibly for issue to employees. The 8.6% of shares held in treasury at the end of last year exceeded these needs, which is why the Board of Directors decided to cancel one million of the shares (on 30 March 2009) and to suspend the buyback program for 2009. |
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