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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, welcome to the Groupe SEB Conference Call. I now hand over to Madame Nathalie Lomon, Senior Executive, Vice President, CFO; and Madam Isabelle Posth, Vice President, Financial Communications and Investor Relations.
Thank you very much. Nathalie Lomon speaking. Good evening, ladies and gentlemen, and welcome to our Q4 and full year 2020 provisional sales release. This has been a very atypical year with the unprecedented COVID health crisis that has spread around the world and that has massive impact on the economy as well as on our daily lives. Against this backdrop, Groupe SEB priorities have been employees' health and safety, business continuation, liquidity preservation and cost adoption plans. Name of the game was to navigate in the best possible way in a highly uncertain environment, featuring extremely low visibility. Obviously, the group's operation and business have been strongly affected by the lockdown measures taken in many countries throughout the year, including again in Q4, by disrupted activity in offline trade and in the HoReCa industry as well as by the shutdown of up to 25 of our 40 industrial sites in the spring. This has materialized, in particular, to a sharp drop in sales in H1 at a level unseen before. As you will see, the second part of the year proved much more dynamic in the consumer business, almost offsetting the very difficult start to the year in this segment. During this presentation, we will proceed, as usual, reviewing the group's overall full year 2020 and Q4 sales performance, then focusing on the businesses and geographies and ending up with our updated outlook for the full year. So let me first start with Slide 5, where you can see that full year 2020 revenue reached EUR 6.94 billion, down 3.8% on a like-for-like basis and 5.6% on a reported basis. Q4 revenue is EUR 2.228 billion, up 2.9% on a like-for-like basis, but down 0.5% on a reported basis. Getting into more detailed analysis for the full year. The sales of the consumer business have been almost flat versus last year on an organic basis. The business has proven its resilience and has delivered satisfactory performance in the light of the COVID-19 crisis. As a matter of fact, the SDA market has been quite well-oriented, notably driven by household spending towards home-related products, including especially cooking categories. Such sustained demand was largely fueled by booming e-commerce, which partly compensated for significant decline in offline sales due to store closures, limited opening hours and other sanitary measures, reduced footfall, et cetera. This key takeaway from 2020 regarding a steep acceleration of online sales is valid in all countries. We can also mention that the sustained demand has also led to a rather limited price erosion in the market. In Q4 alone, the consumer business achieved organic growth of 6.2%, 2.5% on a reported basis, and the sales were notably bolstered by increased growth drivers over the period in almost all geographies, as announced at the end of October. The new restructured measures, including new lockdown, store closures implemented since the end of October in several areas, did not have any impact on the selling at this stage. Oppositely, our professional division has been suffering all year-long from 2 factors. First one being the very high cost in 2019, and you may remember the large deal signed and delivered last year; and second are the huge impact of the COVID crisis on the HoReCa industry, needing our customers, the restaurants, hotels and convenience stores to suspend, to postpone or to reduce their investment in coffee machines. As such, the revenue of the Professional division has been down 28.5% like-for-like in Q4 and 30.7% like-for-like on a full year basis. Slide 6 shows the usual sales bridge between 2019 and 2020 sales. So 3.8% organic decline, as I mentioned earlier. The decrease mainly comes from volume impacts with the major hit stemming from the Professional business, as I just mentioned. Additionally, loyalty programs have been down on last year record amount, resulting in a circa 0.5% negative impact on our full year sales performance, which happens to be the equivalent of the Consumer business performance. And last but not least, we also bear the brunt of a mechanical effect related to the timing of the Chinese New Year in 2020 versus 2019, that I will give you more details on this later on. The currency effect has been negative at minus EUR 219 million. It is consistent with the minus EUR 200 million to EUR 250 million anticipation we shared with you at the end of October. And I will give you more granularity on currency fluctuations and impact on sales in a few minutes. Last, the scope, plus EUR 81 million, of which 3 quarters are coming from Storebound, the U.S. company that we acquired in July 2020, and the rest is from Wilbur Curtis and Krampouz that were not fully consolidated in 2019. Moving to the FX impact on Slide 7. You can see that out of the EUR 219 million, EUR 109 million are coming in Q4, i.e., it's half of the annual negative impact. As indicated previously, there has been a massive deterioration in the FX environment that has started at the beginning of the summer. This negative impact mainly comes from emerging currencies, such as Brazilian real, Russian ruble, Chinese yuan, Turkish lira and Mexican and Colombian pesos. All these currencies have continuously and significantly depreciated against the euro with a sharper trend since the summer. And as seen on the bar chart of this slide, the U.S. dollar also had a double-digit negative impact on our sales in 2020. Moving to Slide to Slide 9 and now looking at our businesses. So given the significant volatility that we have observed since the beginning of the year, let me come back on the quarterly sales evolution of our 2 businesses, Consumer and Professional. In the Consumer business, our sales have been broadly flat organically on a full year basis, but the phasing of this performance has varied quite materially over the quarters, including also high volatility within quarters. The year started with a substantial fall in Q1 revenue, down 17%. That was primarily due to China the first market clearly hit by the COVID-19 crisis, where a very strict lockdown, including plant closings, translated into a massive drop in sales. In Q2, the pickup in China offset in great part, the downturn in other regions, mainly in Americas, limiting the decrease in the Consumer business turnover to minus 3.2% like-for-like. However, the quarter proved extremely erratic with a low point in April at circa minus 40% and skyrocketing sales in June, owing to large restocking by retailers. In Q3, we enjoyed further strong momentum, with revenue up almost 10% like-for-like, fueled by ongoing restocking effects in July and a buoyant September. The dynamic remained solid in Q4, especially towards the end of the year, with December above our expectations, boosted by the fresh stimulus given by the increased growth drivers over the period. As for our Professional business, we have been penalized all over the year by a challenging 2019 base, where sales have been boosted by mega deals with U.S. customers. In this context, the revenue showed some kind of resilience in the first quarter with a circa 10% organic decline, as restaurants and hotels were still largely open. As of the second quarter, the story has been quite different. The global outbreak of the pandemic and the severe lockdown or shutdown measures hit hard the HoReCa industry, and consequently, our Professional business, as customers are very reluctant to invest. This led to this collapse in revenue that has quite softened somewhat, moving over to the next 2 quarters. Thanks also to slightly less demand in 2019 comps. Nevertheless, the new restrictive measures implemented since October and mainly in Europe continue to severely impact our activity. Now on Slide 10 with a similar graph than on the previous slide, but on a half year basis. I won't spend too much time on this one, but I just want to highlight 2 main points. First, in 2020, we have seen a stronger than usual seasonality of our sales with H1 accounting for only 41% of full year sales versus an average of 45% in past years. And the bulk of the business being achieved in H2 with 59% of full year sales versus 55% usually. Second, 2020 shows a slightly mixed picture with revenue down 12.6% like-for-like in the first semester, while the second part of the year marks the return to growth with sales up 3.6%, driven by the Consumer business. The gap is huge. It's 15 points, and it's even wider for Consumer only. Moving to Slide 11 with our product category. With cooking being a strong focus for consumers during the confinement period, no surprise, food prep and electrical cooking have achieved sustained growth in 2020. Both categories have enjoyed another strong quarter with sales up double digits again in Q4. Blenders, meat mincers are among the best sellers in food prep, while oilless fryers, grills and convivial cooking have nurtured the growth in electrical cooking with a clear acceleration in the fourth quarter. Remaining in the kitchen electrics. The decline in sales for the beverage preparation category is mainly due to high comps in 2019, mainly coming from BeerTender entered a slow start to the year. But the momentum has gradually improved over the quarters with Q4 sales up high single digits, driven by coffee-related products, the full auto espresso machines and single-serve coffee machines. Still in the cooking area, but nonelectric, the cookware sales has been slightly down year-on-year, as we've been penalized by the extended shutdown of the Wuhan plant in China that has sale shortages in products. These were not fully caught up despite the solid growth in Q3 and Q4, notably driven by T-fal's pots and pans. If we were to exclude China, cookware sales would have been slightly up more than 2% over the full year. Now regarding home and personal care, situation has been quite different depending on product categories, from comfort, from momentum to fans with favorable weather conditions. In personal care, sales have been broadly stable despite challenging comps last year due to the change in the Steampod range. And in home care, vacuum cleaners, like-for-like flattish sales in 2020, must be put in perspective of the outstanding performance achieved over the past 3 years. The home care activity has resumed positive development in Q3, further accelerating in the fourth quarter and registering double-digit growth, mainly thanks to the success of the versatile models and the introduction of new product lines, notably the robots subcategory. And finally, the linen care revenue has been substantially down in 2020, yet outperforming a global declining market, combining these trends and the negative effects of containment on ironing. Now I'm on Slide 12, dedicated to the Professional business, which now accounts for around 8% of the revenue of the group this year. I have already described and explained the rationale behind the collapse in sales, combination of high comps, consequences of the COVID crisis on the HoReCa industry. Beyond suspension, postponement or reduction of our customers' investments, service and maintenance, a recurring business, representing approximately 30% of Professional annual revenue, has also been limited owing to the situation. Following some sort of rebound in the third quarter, the service business has slowed again, hampered by the new restrictive measures implemented in Q4, especially in Germany, which is our main market for such activities. However, the diversified customer portfolio we have, including restaurants, hotels, fast food chains, convenience stores, offices, partnership with roasters and the international footprint of both BMF and brands have helped us somewhat to mitigate the impact of the crisis on the core business. And furthermore, we resolutely pursued commercial activities in order to seize further development opportunities and increase the pipeline of potential contracts. So we now hand over to Isabelle Posth for more details on the market. We move into Slide 14.
Yes. Thank you, Nathalie. Good evening, and happy new year to all of you. So being on Slide 14. As usual, the review by geography focuses on the Consumer business. As an introduction, you will find here the quarterly phasing of sales changes in the group's 3 continents since the beginning of the year. Business volatility, highlighted by Nathalie earlier is obviously also rooted in geographies. Also phasing might be slightly different from one continent to the other. Early outbreak of the pandemic in China dragged down Q1 sales in Asia, while the rest of the world was hit later in Q1 and in Q2, which was kind of a rollercoaster-type quarter. As from Q3, quite tonic, all 3 continents have been back to growth with momentum being significantly stronger in the Americas and EMEA than Asia. We confirm that across the board, business has been largely driven by a sharp acceleration in online sales. This has massively increased the weight of e-commerce in group sales. In depth, consolidated analysis has not been completed yet for the full year, but depending on countries, the share of e-commerce in revenue has been up by some 10 points. Now moving to Slide 15. In 2020, EMEA has represented 47% of Groupe SEB's consumer sales, including 35% for Western Europe and 12% for the other countries. In Q4, we achieved solid organic growth in the region of 7%, while sales were up 1.5% like-for-like for the full year. Start with Europe. Full year sales have been slightly down, like-for-like, minus 1.5%, with a lag effect stemming from H1, not totally offset by a much better H2. Following a strong rebound in Q3, where sales have been up high single-digit like-for-like, the end of the year has been softer, yet positive, mainly due to high comps in Q4 2019 related to loyalty programs in several countries. Excluding these negative impacts of loyalty programs, the core business would post 4.6% growth like-for-like in Q4 and would be only slightly negative for the full year. Good momentum was fueled by firm household spending towards small domestic equipment in the context of stay-at-home imperative and also increased homemade cooking. As such, our champion product in Western Europe has been electrical cooking appliances, such as grill or fan cooking devices, but also full espresso coffee machines, food preparation categories or everything which is cooking. Also vacuum cleaners featuring a large and renewed product line. As announced, the group increased significantly its investment in marketing and advertising campaigns in the last quarter in order to boost business. Regarding country performance, apart from the U.K., which is a specific situation beyond the COVID-19 issues, in Belgium, whose Q4 sales have been penalized by the nonreceipt in 2020 of large LPs in the end of 2019, but core business is positively oriented. All markets have contributed to the Q4 dynamic, starting with France, where following a brisk Q3, as a reminder, plus 15%, sales trend was more modest in Q4, momentum being notably subdued by a different phasing in 2020 of loyalty programs implementation. Well, excluding this phenomenon, growth in Q4 in France would have been in the order of 5%, fueled primarily by kitchen electrics and vacuum cleaners, versatile and newly enriched range of robots. And it is also worth mentioning the good dynamic in coffee machines, full automatic but also Dolce Gusto as well as Cookeo, the sales of which have been bolstered by the introduction of Cookeo Touch, with strong marketing activation around it, featuring notably, Cyril Lignac, our chef partner, in a big event in November, the Moulinex Grand Live. Over the full year, revenue has been up, including a strong contribution of the cookware category, whose sales have been boosted by a major LP with one of our large mass retailers. As in previous quarters, activity in linen care has been down, however, continuing to outperform the declining market, leading ultimately to strengthen leadership position. In the other European countries, Groupe SEB has achieved a good performance in core, with the vast majority of markets posting sustained growth or even robust in some countries, despite the implementation of restriction again, partial containment, curfews, closures of stores as of mid-quarter. This has been the case for Germany, where it is worth noting that VMS products have had a firm contribution to growth with reinforced presence online. The Netherlands also, thanks to a massive boost in online sales via pure players. And Q4 dynamic was also solid in Spain, including a strong momentum for VMS products, both cookware and SDA, Portugal, Italy, Nordics, et cetera. In all countries, e-commerce has been a key growth driver, but the group has also continued to develop its strong partnerships with its traditional offline retailers. Moving now to Eurasia, where the overall environment has been quite volatile, combining COVID-19 crisis, economic issues. For instance, VAT rate tripled in Saudi Arabia, also boycott of French products at the end of the year in the Middle East and also unfavorable FX evolution. Comments that I made for Q3 regarding increased FX volatility since last summer are still valid, with ongoing and amplified depreciation of currencies against the euro and especially on the ruble, the Turkish lira or the Ukrainian hryvnia. And that was the case for the last 2 quarters and represented clearly heavy headwinds for the group. This, of course, leads to a substantial gap between reported sales and like-for-like figures for the full year and more importantly, for Q4. However, very much in line with Q3, our organic growth in the region was outstanding, with sales up almost 20% against the backdrop of well-oriented small domestic equipment market. Elsewhere, market dynamic and group solid momentum has been driven by 2 main factors: one, the stay-at-home categories with strong positive impact on our sales in home cleaning. Automatic espresso coffee machines were mainly [Audio Gap]Second, e-commerce, including brick-and-mortar, the fastest-growing channel as well as pure players, and these are mainly national ones in the region. This very special year, the clear focus and acceleration regarding digital activation and execution have led to a sharp increase in the weight of e-commerce in group sales in Eurasia probably by around 10 points with ultimately market share gains online. Leveraging its longstanding partnership relations with offline retailers, the group continued to gain broad also in the other distribution channels due to consolidated position in the market. In parallel, the group also made new inroads in its D2C approach, nevertheless, still tiny at this stage. In terms of markets, performance was driven by our large markets, Russia, Poland, Turkey, Ukraine, Romania, all repeating high double-digit revenue growth. At the same time, the ongoing development of our business in South Central Europe and Central Asia and also smaller countries have contributed to our growth path in the region. Turning now to Slide 16, Americas. It represents around 14% of group sales and have been posting flattish annual sales on an organic basis and a plus 6% like-for-like growth in Q4. Overall, the health situation remained very critical in the continent over the past month, and more particularly in the U.S., Mexico and Brazil. Things also deteriorated again in Colombia recently. My comments will be focused on the U.S., where COVID-19 crisis has really urged offline retailers to hugely accelerate their shift toward online sales. This did not prevent banners, including longstanding ones, to announce massive store closures during the year resulting from pandemic financial pressure. Situation of the American distribution, thus, remains quite tense. As for the group, we have continued to fuel this massive dynamic and gain additional listings online, developing special programs dedicated to millennials, intensifying digital marketing activity. The American market, SDA as well as cookware, has been both well-oriented, propelled by more focus on home products, of course, but also by the financial subsidies granted by the American administration to more than 150 million consumers in order to incentivize consumption. There have been one-off checks of $1,000 during the period as from the beginning of the crisis, plus also complementary federal unemployment benefits hovering between $600 per week and lately $300 a week. In this context, Groupe SEB achieved a satisfactory year with full year revenue up by close to 6% like-for-like, while it was slightly down for the quarter after a very dynamic Q3. The performance was propelled by a very good momentum in cookware, driven by the cooking-at-home trend, of course, and obviously, fostered by the above-mentioned stimulus package. Our 3 brands contributed to the dynamic, T-fal, All-Clad and IMUSA. T-fal has continued to grow in all distribution channels, and the brand has also entered new programs with some retailers. And T-fal, along with All-Clad, has made major progress -- and have achieved major progress with clubs and also online, with a growth in online sales that has been exceeding 50% with few players and brick-and-mortar. IMUSA has achieved in Q4 and full year a great performance based on 3 factors: successful extended distribution with a major development in presence -- in its presence in large national banners; second, the ongoing success of IMUSA iconic products in cookware; and three, an extended product offering in cookware with new materials and also in SDA. On the contrary, and despite better distribution exposure since last year's channel extension, Rowenta linen care business continued to be penalized by both a declining market and poor demand related to the pandemic shopper behavior [Audio Gap] However, Rowenta outperformed the market and consolidated its leadership position in ironing. Newly acquired Storebound achieved outstanding performance for both the year and the quarter with sales up by respectively 50% and 60% in dollars versus last year. Its robust momentum has been driven by the DACH brand, posting major successes in cooking appliances, such as egg cookers, waffle and muffin makings, dog cake makers, a huge success and small food processor. Now going to South America, where the overall environment has proved quite challenging due to persistent and tough health crisis and major FX issues regarding all currencies in the region. Following the solid pickup in revenue in Q3, the group confirmed in Q4 a strong dynamic in the context of a buoyant cooking market. Turnover growth exceeded 20% like-for-like, driven by higher volumes, but also substantial price increases implemented to offset the depreciation of the Brazilian real against the euro. Yes, I did mention that I was in Brazil here. I am in Brazil. Our Q4 sales have thus been primarily nurtured by electrical cooking, with oilless fryer being the fastest growing category, food preparation, blenders and kitchen machines, linen care and fans, whose sales have been boosted by favorable weather conditions. For the full year, robust momentum in H2 compensated for a very difficult first semester, penalized by the brisk outbreak of the crisis and plant stoppages. This allowed us to post sale stability at constant exchange rates for the year as a whole. As in other region, online sales have been steeping -- have been steeply accelerating in Brazil, especially via click and mortar circuits but with offline retail being generally open. Growth was also omnichannel. In Colombia, the second part of the year has definitely been -- has definitely marked a turnaround in the business with double-digit organic growth around in the 20s. Obviously, this high growth rate also includes price hikes to compensate for the weakened Colombian peso. Nevertheless, Q4 story in Colombia has been very similar to that of Q3 with the rise in revenue being mainly fueled by outstanding results in blender, skyrocketing sales in oilless friers and [Audio Gap] Now I am moving to Slide 17 for Asia, which represents close to 35% of group sales and has been up 4.5% like-for-like in Q4, while down 3.4% for the full year, dragged down by China's difficult first semester. Speaking of China, sales for the full year have been declining by 6% like-for-like, 9 months of positive growth failing to offset the dreadful start to the year. Focusing on Q4, performance has been more or less consistent with the overall trend we have seen in H2 following the upsurge of sales in the second [Audio Gap] As such, China has been posting a 3% organic growth in Q4, close to that of Q3. However, as already mentioned previously, the increase is made out of a dynamic online distribution on one hand [Audio Gap] strongly negative trend for offline channels, which means that retail patterns are not really back to normal in China. E-commerce, thus continues to be the major growth driver on the market, now representing more than probably 60% of Supor sales. To give more granularity on Q4 performance, and I know that you are all waiting for this figure, organic growth of 3.1% needs to be put into perspective due to the negative effect this year, very limited sell-in for the Chinese New Year to fall on February 12 versus last year. As a reminder, such sell-in boosted growth in Q4 2019 by a little more than 7 points, building a high base of comparison. Taking this into account, growth rate for Q4 2020 would gain around 5 points, bringing growth rate to 8% like-for-like in Q4. For the full year, the impact would be of around plus 3.5% -- 3.5 points to be added to the yearly performance. By product category, after dull business due to the impact on supply chain of the extended closure of the Wuhan plant, which is dedicated to cookware for the domestic market, recovery was confirmed in Q4, back to solid sales expansion in cookware, highly driven by online channels, of course, whose weight in cookware -- in cookware, total sales has significantly strengthened this year. Most product families have contributed to Q4 dynamic. And to mention only a few, I would talk about woks, pressure cookers, frying pans and thermal mugs, as on-the-go items are back among our hero products. Turning towards small electrical appliances, sales grew slightly in Q4 with quite contrasting performances between categories. Kitchen electrics, high-speed blenders remain the main driver, thus consolidating its #2 ranking on these key products. May it also be noted that breakthrough with the VMS brand in premium products, our strong momentum for newly developed, and I would say, more western categories, such as oilless fryers and ovens that have gained significant ground. All in all, in a very volatile year in China, in which it has been crucial for Supor to accelerate digital activation specifically towards millennial communities to increase leverage of social networks, enhance development of live streaming e-commerce, capitalizing on influencers and celebrities having millions of fans and also followers to market the products on hugely popular platforms, such as [indiscernible].In Asia, out of China, excluding China, the group has achieved a very satisfactory full-year performance with revenue increasing by 5.2% like-for-like. Q4 was of good quality, sales being up 8.3% organically, not that far from the 12% like-for-like growth posted in Q3. But after a strong October and November, the month of December has slightly weighed on the quarter's performance due to epidemic resurgences in some Asian countries. As in Q3, the vast majority of countries [Audio Gap] focus my comments on Japan and South Korea only. In Japan, a resilient market, we achieved a buoyant fourth quarter, plus 8%, driven by some true bestsellers, such as the electric pressure cooker category, featuring an enriched lineup with the highly successful Sakura cooker, which [Audio Gap] rice cooking option and newly launched Cook4me Mini. Among our flagship and champion products, cookware has been another key growth driver over the period, especially via the Ingenio range. In order to support the business, strong advertising and marketing campaign has been implemented and rolled out, both online and offline. Worth to be mentioned, the group's retail network now comprising 45 stores, including the 6 openings of [Audio Gap] have continued to enjoy solid growth over the quarter and the year. And now, last but not least, South Korea. The strong momentum in Q3 faded somewhat in the last quarter. That was mainly due to 2 reasons: one, a drop in store traffic in relation with new COVID outbreak; and second, a negative impact on volumes of price hikes taken in October on around half of our products. However, full-year revenue was slightly up like-for-like, driven by our bestsellers, such as [Audio Gap] vacuum cleaners and garment steamers. This ends up my comment. [Audio Gap]
Thank you, Isabelle. So now, we're now on Slide 19 with the 2020 guidance update. So as a reminder, at the end of October, we told you that we were expecting the group operating results from activity to be down between 25% to 30% year-on-year. The better sales performance of our Consumer business in Q4 notably driven by increased growth drivers over the period, should finally lead us to a more limited decline in operating results for 2020. So as such, we now expect full year of -- to be around EUR 600 million. This includes an unchanged assumption for FX impact with an expected headwind, slightly above EUR 100 million, and a slight positive raw material effect. So that's it for this presentation. We're now happy to take your questions, so please go ahead.
[Operator Instructions] First question on the line is coming from Mr. Nicolas Langlet from BNP.
I've got 3 questions. The first one on China. So you mentioned a recovery on the cookware segment. Have you been able to recover all the market share loss on that segment at the end of Q4? Or should we expect further benefit in the coming quarters? And also on China, do you have any comment to make regarding the performance for the first weeks of January? How does the Chinese New Year look like for you at the moment? Second question on the adjusted EBIT guidance increase. What are the main drivers of the increase? Is it all related to better Q4 sales performance or you also adjusted some costs in Q4? I remember that you expected a strong increase in growth driver cost in Q4. Was it really the case?And finally, on the raw material environment, we have seen a sharp increase in raw material prices in recent months. Based on your hedging, what sort of impact are you expecting at this stage for 2021? And have you already planned any price action to offset it?
Thank you, Nicolas, for your questions. So first, starting with the question on China. Yes, we have obviously lost some sales in the second quarter, and that was due to the fact that our main producing plants was closed for 2.5 months. But when we take a bit of -- when we look at the overall behavior of the Chinese market, we don't think that we have lost market share on a full year basis. So we have recovered from that event. Now talking about the Chinese New Year, a bit early for us to tell you. We expect that things should go on smoothly, but it will be more a story of January and also February as there are more and more states that are now down to online, direct to consumers. And so the extended period for recognizing the revenue is different compared to what it was previously. Moving to your question regarding the performance in the fourth quarter. It's a combination of everything of what you said. So definitely, we had a stronger performance in the consumer business in the fourth quarter, mainly in Europe, not only, but significantly better than what we're expecting in Europe. We have implemented the growth drivers expenses as per what we had said in the third quarter. So you may recall that we would -- we told you that we would increase our expenses if the market was there and the demand was there. So that was the case. So the was -- has been working quite well, and this is the main reason for us being able to deliver an operating result that is a bit above the expectations. And last, but not least, your comment on -- or your question on raw materials. So thank you for raising the question. For this year, we expect that we will have a slight positive impact of the raw material price, including hedges compared to 2019. That will not be the case in 2021. We think that the impact will be a negative for us, and in absolute value, certainly more important that the slight positive impact that we benefit from in 2020. So obviously, there will be, as usual, action plans to pass on the increases to our customers. But again, have in mind that the overall impact will be negative.
The next question comes from the line of Alessandro Cecchini from Equita.
The first one is about, I mean, the ForEx situation. So the previous question was your view of raw material for 2021. I would like to better understand at current spot rates, what kind of situation do we expect for 2021? And then actually, what is your view? It's a little bit early, but for the next year, if you expect is it possible to return your view to an ORfA level that is roughly speaking, in line with 2019? So just to understand -- or better, if you can, just to elaborate on potential drivers for 2021.
Thank you, Alessandro. So thank you for asking the question, but you know that it's a bit early for us to guide on 2021. Usually, the group does not guide before the end of the first semester. And given the current context and the lack of visibility that we have, it's not an easy question to answer. But what I can tell you regarding the FX is that given the sharp drop and the significant impact we have faced mainly in the second semester, we expect also that at least in the first semester next year to have also a negative impact on FX. And then coming back to what will be the performance for 2021, again, really too early for you -- for us to answer that question. But having in mind that fundamentals of the group are good, we are very confident on the resilience of the business model. This has been proven throughout 2020. We're confident on the pertinence of the business model. So multi-product, multi-brand, multi-geography. And the only thing I can tell you is that the teams here are fully committed to overperform 2020. That is for sure.
Okay. And then my last question is about E&P. For this year, could you share with us the percentage of sales for the full year in terms of E&P on sales?
Okay. So it's, again, a bit early. It's not a full-year release call. It's only focusing on sales, so I suggest that we wait a couple of -- maybe 2 to 3 weeks -- 3 weeks, and then I will provide the detailed information regarding the P&L.
We have no more questions on the line. [Operator Instructions] Next question comes from the line of Charles-Louis Scotti.
I've got 3 questions. The first one on the level of stock. Do you have the visibility of the level of stock at retailers levels? And has the better-than-expected performance in December being fueled by restocking? My second question on your guidance, basically, excluding FX, it suggests a 10% profitability. Can you help us quantify the positive one-off that has been -- that will be booked this year as the furlough or partial employment in France? And my last question on the Professional business. Can you share with us your view on the recovery of this segment. And as it is probably -- it would be quite tough next year. Do you intend to scale back a little bit operation there?
So first off thing with the PCM business, yes, that's clearly the area in the group where we have delivered, I would say, the worst performance throughout the year. It's really related to, I would say, the health of the underlying sector, which are hotels, restaurants, and more generally, the catering industry. We don't expect a strong recovery in 2021. We think that it will take a few quarters to go back to the situation that we have benefited from in 2018 and 2019. Our customers are postponing their investments. The level of the pipe is good, though, but again, it's more a matter for them to decide when it will be relevant to make further investment in their coffee machines. So regarding the streamlining of the operation, I think we already mentioned that it's been currently ongoing. We are not considering that we can keep the level of structure of the business at the level it was when it was delivering a stronger sale, so we have started to review the setup of the PCM business to come up with a lower cost base in 2021. Then you had a question on the update on the guidance for 2020, right?
Yes, exactly. Excluding FX, it's basically above 10%. But I'm just curious to know what -- where the positive one off as well to the furlough, for example.
Well, we had -- so I'm not sure of the percentage you mentioned, what it relates to. So yes, we have a few positive one-offs, especially coming from partial unemployment. We'll get back to you with the exact figures, again, when we release our full-year numbers. But it is nothing that is explaining the performance of the fourth quarter. Performance of the fourth quarter is really coming from higher sales versus expectation, and this is the reason why we are adjusting our guidance. And then your first question on the level of stocks at retailer level, what is the visibility we have, I would say, quite low. We have seen throughout the year, ups and downs in the orders of the retailers with very strong volatility from one month to another. What we think, though, is that if we look at the very first publication of some of our customers is that the level of sales at the end of the year was quite good. So we could expect that their level of stock is not that high, but we don't have a full visibility on the level of stock they have.
The next question from comes from the line of Marie-Line Fort from SG.
I would like to know what is the percentage of your sales made online, and does it put into question your offline presence, particularly in Germany through VMS or in China?
So in '20 -- well, 2019 percentage of online sales were around 20%, 25%. We're still working out the numbers for the full year, but we think that this percentage should increase by roughly 10% for the full year, but to be confirmed. Does it mean anything regarding our offline presence in Germany and in China? No, we are constantly monitoring the performance of our stores -- of 9 stores we have entered, but for another last 3 years in VMS, into a program in which we are regularly closing and opening stores depending on their profitability and the level of traffic we have. That is the same thing for the presence in China. So for the time being, the fact that online sales developed strongly is more a consequence of the pandemic and the confinement measures, but it doesn't mean that we are having a different strategy regarding the development of our offline presence on the worldwide basis.
Yes, all altogether, at the end of the year, we will have a slightly lower figure at the end of December compared to last year -- compared to the [Audio Gap] number of stores.
Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect. We have one more final question. Would you be happy to take it?
Yes. Yes.
Perfect. And the next question comes from the line of [ JP Roland ] from [ LT Funds. ]
In terms of acquisitions this year, can we expect anything material or just tiny things or nothing really or bolt-on? So are you working on something?
Thanks for the question. So you know that...
Is there something cooking at SEB?
I like this one. So you know that we are monitoring the market super regularly, and we're always looking at potential options for M&A for the group. So I don't have, obviously, any precise answer to give you. The only answer I can give you is that we are ending up the year with a very strong balance sheet. And so should something happen or should we find a nice target to purchase, we have all the means in our balance sheet to do so.
We have no more questions on the line.
Okay. Yes. So thank you for all your questions. As a conclusion, again, coming back on the fundamentals of the group, strong business model, strong teams, strong commitment on the sector, which has proven its resilience throughout the year. Regarding the Professional segment, we still think that the fundamentals are there, which will take some time to recover. In the meantime, we are, as usual, as the group has always done, adjusting the structure, and we're looking forward to talk to you at the end of February for our full year financial releases. So thank you for attending the call, and thank you for your questions.
Thank you. Bye-bye.
Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.