18.06.2021

SAH annual meeting: A well-positioned brand and even more ambitious prospects

SAH annual meeting: A well-positioned brand and even more ambitious prospects
18.06.2021

The Société d'Articles Hygiéniques (SAH) held its Ordinary General Meeting on 18 June 2021, at a distance, to approve the accounts for the financial year 2020, during which, despite the health crisis, the group continued its sustained growth.

2020 proved to be a record-breaking year for the group co-founded by Ms Jalila MEZNI. The figures presented by the group's financial director, Mr. Mohamed Amine Ben Malek, at the annual shareholders' meeting, back this up.

Last year, the SAH group achieved consolidated sales before patronage refunds of 645.2 million Tunisian Dinars, an increase of 12.6% compared to the previous year. Also, consolidated local sales grew by 23.8%, while regional sales (including exports and sales of foreign subsidiaries) decreased by 6.2% due to logistical difficulties related to maritime transport and the closure of the borders with Libya and Algeria.

Baby care sales represent 38.5% of the SAH Group's sales, followed by paper products which contribute 22% of the Group's total sales. Detergent sales reach 20.6% of group sales versus 10.3% in 2019.

SAH's sales growth was mainly driven by the increase in sales of Azur Détergent (+125%) and the sustained performance of SAH Tunisia, despite the decline in exports. In addition, the group's performance was negatively impacted by the decrease in SAH Algeria's sales due to disruptions in raw material imports caused by the sanitary measures related to Covid-19.

The sales of the parent company SAH Tunisia represent 58% of the group's sales, followed by the subsidiary Azur Détergent which contributes 18.6% of the overall sales. The sales of the subsidiary Azur Papier reached 10% of the group's sales, followed by the Algerian subsidiary which contributed 7.3%.

Profitability targets achieved …

In 2020, SAH achieved a gross margin of 264.9 million Tunisian Dinars, up 27.3% compared to 2019. The gross margin rate reached 42% compared to 37% in 2019, an improvement of 5 percentage points. This growth is mainly due to lower raw material prices in 2019, especially for cellulose, super absorbent, and pulp, positively impacting production costs in 2020.

The group also benefited from the impact of optimising its production process, which resulted in lower waste rates for first and second choice products.

SAH group's EBITDA reached 115.5 million Tunisian Dinars, i.e., a growth of 42%. Also, the EBITDA margin reached 18.3% compared to an EBITDA margin of 14.4% in 2019. This performance is the result of the improvement in the gross margin combined with the economies of scale achieved on the group's purchases and consumption.

In 2020, SAH achieved a record net profit of 33.5 million Tunisian Dinars, up 51.2% compared to 2019, representing a net margin of 5.3% versus a net margin of 3.9%. Adjusted net income for 2019, considering the change in the scope of consolidation (6.5 million dinars) is estimated at 15.6 million Tunisian Dinars, i.e., a growth in the adjusted net income of approximately 115% in 2020.

SAH's overall indebtedness increased from 334.4 million Tunisian Dinars as of December 31, 2019, to 382.2 Tunisian Dinars as of December 31, 2020. The increase in debt is mainly due to the increase in short-term financing in connection with the financing of the stock dedicated to the second Azur Papier line.

Net debt reached 333.5 million Tunisian Dinars at the end of December 2020 against 294.9 million at the end of December 2019. The adjusted net debt at the end of 2020 is estimated at 255.3 million Tunisian Dinars, i.e., a net debt/EBITDA ratio of 2.5x.

The main adjustments consist of subsidies not yet received of around 20 million Tunisian Dinars, investments financed but not yet operational and a stock of raw materials at Azur Papier in preparation for the entry into production of the second line (+35 million dinars).

It goes without saying that the interruption of the installation of the second line of its subsidiary Azur Papier, the closure of borders forcing Italian engineers to return to their countries and the delay in the delivery of local orders, due to traffic restrictions, and export orders, due to the closure of borders, affected the group's activity in 2020. Nevertheless, these delays were made up for during the months of April and May thanks to obtaining the necessary authorisations for national transport and the securing of a maritime delivery, notably to Libya.

Promising prospects …

According to the group's management, its development strategy is focused on consolidating its local and regional market share, exploring new export markets, and diversifying its product range by developing its subsidiaries' activities.

In Libya, the group plans to increase its paper production with the start-up of a paper towel line in February 2021, as well as the start-up of an additional paper towel line and a new baby nappy line in 2021. As for Algeria, a new paper towel and nappy machine has been installed with production scheduled to start in the third quarter of 2021.

In Senegal, the launching of the production of baby nappies is estimated towards the end of the second quarter of 2021 in addition to the installation of a machine to produce napkins in 2021. While in Côte d'Ivoire, a project to install a paper towel production machine is planned for 2021.

For the Detergents business, the group expects sustained growth in detergent sales with the expansion of exports to Congo, Gabon, Burkina Faso, and Mauritania. The project to expand the liquid and powder units as well as the plastic unit (to produce packaging) is still ongoing with a planned start-up in the second half of 2021.

Building on the successful launch of its Lilas detergents range, whose sales reached 124 million Tunisian Dinars during the first (full) year of operation, the SAH group is considering exploring another equally large and buoyant segment, which will be announced later.

15 million Tunisian Dinars distributed in dividends

The Ordinary General Meeting approved the distribution of a dividend of 0.230 dinars per share for the financial year 2020 corresponding to the total sum of 15 million dinars to be deducted from the results carried forward prior to 1 January 2014 and from the resignation premium.

The dividend payment date has been set for 23 June 2021.

About SAH Group

Created in 1994 by Jalila Mezni and Mounir El Jaiez, the SAH group is the Tunisian leader in the production of hygienic articles, marketed under the Lilas brand. The group started its operations with the production of hygienic products and then moved into the production of cellulose wadding and, in 2019, launched the production of detergent products.

The Group operates state-of-the-art plants and high-speed lines in Tunisia, Libya, Algeria, Côte d’Ivoire, and Senegal.

Contact

Khadija Cherif

Director of Communication and Investor Relations

+216 71 809 222 | khadija.cherif@lilas.com.tn