Good day, ladies and gentlemen, and welcome to Maisons GIMON First Half twenty twenty one Results Conference Call. At this time, all participants are in a listen only mode. We will conduct a question and answer session at the end of the management's presentation. And just to remind you all that this conference is being recorded. We would like also to inform you that this event is also available live with Synchronized Slide Show.
During this conference call, statements could be made that constitute forward looking statements based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the future results expressed, forecast or implied by such forward looking statements. All listeners are reminded to read the forward looking disclaimer on Slide 2 For a more complete list and description of such risks and uncertainties, please refer to Maisons du Monde's filings with the French authority, the March I would now like to hand the conference over to your speaker today, Christopher Welton, Head of Investor Relations. Please go ahead.
Thank you very much, and good morning to all of you, and thank you for joining us on this call to present Maison Du Monde's first half twenty twenty one results. Hosting today's call is our CEO, Julie Balbaum. She is joined by our CFO, Regis Massuyeux. Julien Regis will be making today's presentation, and then we will, of course, open up to questions. You have no doubt seen the press release that we issued this morning.
The conference call slides can be downloaded from and viewed on our website at maisondumond.com. This call is also being audio webcast and a replay will be available on our website later today. So without further ado, I'll turn the call over to Julie.
Thank you, Chris, and good morning to everyone. With solid growth in both sales and profitability, Maisons du Mont turned in an excellent performance in the first half, even while continuing to operate in an atypical environment with stores in France open on average for twothree of the period and stores in other European countries open on average for 3 quarters of the time. This situation compares slightly favorable to last year with a global average opening ratio in H1 of 70% versus 67% in 2020. Stores have mostly been functioning normally now since mid May. And as of June 30, all were open in operating normal hours, except for 5 stores that are undergoing refurbishment as per our plan to accelerate store investment to enhance brand appeal and customer experience.
These challenging circumstances allowed us to demonstrate once again both the strength of our differentiated omnichannel model and the attractiveness of our brand. The strength of our model first, as we posted broad based growth in the half with stores resuming strong growth of 30% and online continuing to gather momentum with 44% growth. This online growth was accelerated by the success of our online marketplace in France, of which we are especially proud, and I will come back to that later on. And the attractiveness of our brand as we continue to gain new customers in the house with 40% new customers in total while spread across our channel. This attests to the continued success of our strengthened collections designed to meet evolving customer needs.
Both our furniture and decoration collections have been very well received as they need customer designs for a return to a more handcraft spirit and more cozy fabrics as well as for colors and joyful patterns. Our collection this year speak particularly well to people who want to feel good in these turbulent times. The press has also highlighted particularly trendy accessories line this season. More sophisticated magazines have started featuring us in France, but also in Spain, in Italy and Germany. As a matter of fact, we are gaining brand recognition across Europe as measured by our annual brand survey.
Furthermore, in France, the patent study revealed that Maisons du Mont is once again France's 2nd favorite home decoration brand for the 5th consecutive year and the 2nd brand across all sectors when it comes to store experience. Finally, the group saw solid growth in its followers' base and social networks. Our Instagram community grew again by 13% to reach 5,900,000 followers and our monthly average Facebook reach increased by another 20%. All this translated into excellent first half numbers as we will see on the next slide. So slide 6, we sum up our first half performance in 4 key numbers.
Sales stood at €663,000,000 a rise of 36% compared to H1 last year. Like for like growth was almost exactly the same at 35%. To put things in perspective, total reported sales are also nearly 17% above pre pandemic levels, that is in 2019, as Regis would show shortly. EBIT now, which shrunk to a positive €52,400,000 in H1 from a negative 7 point €4,000,000 in the same period last year. So our margin grew by a very strong 942 basis points to reach 7.9% from a negative 1.5% in H1 last year.
This actually represents a historically high EBIT margin level for the period. As a reminder, for the year of 2019, the EBIT margin stood at 5.4%. The combination of strong sales and profits results in diluted earnings per share of €0.42 in H1, a very strong reversal from the minus €0.35 in the corresponding period last year. Enomobile finally showed its ability to generate cash, with free cash flow coming in at €57,000,000 €50,000,000 more than in the first half of last year. These, as we said, are very solid numbers, attesting to the adaptability of our omnichannel business model to the challenging circumstances in which we're operating.
On the Slide 7, we present our traditional look at sales by geography, channel and category. And as you can see, high double digit growth is across the board. This rebound was driven by the strength of the omnichannel model and the sound execution of our strategy priorities. By geography, 1st, both France and international were up strongly, respectively, by nearly 32% 40%, demonstrating that activity has picked up across all of our markets. As you can see, our growth is not only above last year, which was of course marked by the start the pandemic, but it's also above H1 2019, with France up 8% and international up almost 29%, whereas we had a lockdown this year and no lockdown in 2019.
The complementarity of our channels is demonstrated by 30% growth in store activity and an even stronger 44% in online as consumers kept shifting from one channel to another to adapt restrictions in different markets. Compared to the first half of twenty nineteen, that is pre pandemic, store activity is slightly down only by 5% due to the fact that our stores were closed on average for 30 percent of the time during the first half. In the meantime, online is up by an extremely strong 80%, validating our strategic decision to build a digitally driven omnichannel model and to launch on selective marketplace. And by category, finally, year on year growth was also strong with a 40% increase in decoration and not furniture. Sorry for the typo.
There was a mix up in the names of the categories. So we are talking here about 40% increase in decoration and 31% in Furniture. This is true also on a 2 year stack with Decoration up 16% and Furniture up nearly 19%. Now I suggest we turn on Slide 8 to the key personal milestones of the quarter. To continue to enchant our customers and address their evolving needs, especially in this situation, we launched our new Kits and B2B collection.
Kits is a growing and promising segment. We now have over 1,000 products with a stronger focus this year on sustainability and product modularity, which is a growing expectation from consumers, with new items such as convertible changing tables or modular bookshelves, which are proving very successful. In B2B, we are continuing our development with a sizable increase in the number of products and an enhanced focus on office related products, such as desks and chairs, to capture the new working from home trend. We also continued to improve our omnichannel proposition with the introduction of 24 hour delivery for decoration items ordered online and the continuous ramp up of our selective marketplace, which I tell you more about on the next slide. Finally, we continue to strengthen our brand opening with the successful opening of our 3rd Maisons du Mont Hotel and Suites in the city of La Rochelle, like the ones already opened in Nantes and Marseille.
This one showcases our furniture and decoration products in its 63 rooms and is a great way to highlight the brands and bring it alive to our customers. This hotel again was opened in partnership with the Vicartan Group and featured the same just like home atmosphere. All this contributed to the attractiveness of our brands and helped explain why we were again ranked by customers the 2nd Savary Home and Living brand by Parthenon. On Slide 9, we focus more specifically on our carefully curated marketplace, with extensive offer complements our own product range and with success contributes to our overall online growth. We did see a very good level of activity in the house with GMV reaching €32,000,000 That represents 1 quarter of our total French online GMV already, which is a very significant number so soon after launch.
We continue to see an increase in the number of brands on boarded, which grew from 4 100, sir, in March to 580, and we realized over 200,000 transactions already. Now for several sizable vendors, the Maison Timmer Marketplace is already the leading generator of sales after just a few months of activity. The marketplace now features more than 70,000 SKUs, and the best selling categories for the semester include outdoor furniture, indoor sofas and armchairs as well as bedding, a new category for Maisons Dumont and also bed linen. Finally, we have a very high level of customer satisfaction for those marketplace orders, which, as you know, is a key focus for us, with a score about 4 out of 5, which is at par with our own e commerce operations. We do expect to continue to ramp up the marketplace and are preparing the launch of the marketplace in the French store network and also a second online market both by 2022.
On the following slide, Slide 10, we look at our store network in the house. The current environment and the evolution of consumption habits has led us to slow expansion in terms of number of openings, but it does not in any way change our strategy of actively managing our store network to have bigger stores in choice locations. This helped improving our customers' shopping experience and build proximity with them, a key feature for our brand appeal. Stores also showcase our brand and are key enabler of our omnichannel strategies as they allow us to fulfill our online orders in a very cost effective way. At the end of H1, we operated 369 stores, an unchanged number versus December of last year.
Over the period, we opened 11 stores, most of them on side of France, and we closed 11 as well, 8 in France and 3 in the rest of Europe. So on an 8 basis, we have 6 stores in France and 6 additional ones in our international network. In terms of South Korea, we have added about 5,000 square meters over the period with a stable number of stores as part of the active management of locations as mentioned. On Slide 11 now, we look at the continuing progress we are making on our CSR commitments, a key focus of the brand, as you know. In H1, Maisons Dumont concentrated its CSR efforts on 2 key fronts.
First in that, the environment. We strengthened our sustainable offering with a number of spring summer decoration items meeting sustainability criteria, increasing by 50% year on year and eco friendly products in kids categories, up by 44%. In addition, in line with our commitments to reduce and optimize our energy consumption, we completed AASO 50000 and 1 certification of all of our French stores. 2nd France, social measures, which are particularly important in the pandemic environment we are facing. So let me go to a few actions.
1st, we supported our teams' purchase Empower through a bonus to all of our employees in Europe. And we did provide extra compensation on temporary unemployment to align all of our countries on French social security terms. 2nd, we signed a 3 year agreement with our labor unions to promote the inclusion of disabled persons in our workforce. 3rd, we financed a vaccination program for Indian potting suppliers, allowing 100 workers to be vaccinated to date. And 4th, we donated products to 21 hospitals in France, Belgium, Italy and Spain.
These efforts are all part of a drive to become an ever more sustainable company. And with this, let me now hand over to Regis.
Thank you, Julie, and hello to everyone. Really happy to be with you this morning to comment on this strong set of results. Let me start on Slide 13, 1.3. Just important for me to set the background backdrop, sorry, against which we operated in H1. The environment continued to be something of an acid test of our omnichannel model.
We proved to be very well adapted to the disruptive context in which we are operating and allowed us to turn in the excellent performance just Julie described. Some of these elements are important because they will prevail some of the tendency for the rest of the year. First, some elements of contact about the stores. Getting into the detail. In terms of stores, H1 sales up 30% is a bit of 2 momentum: 21% in France international at 42%.
This was achieved despite challenging circumstances. French network was about was open about 2 thirds of the time in H1 with Q2 particularly impacted if we all remember as half of our stores were closed on average in the period. At the same time, our international network was open 74% of the time on average. But in this case, it was really Q1 that saw more closures with about onethree of stores closed during that period. In that context, really happy that we were able to maintain the traction and the growth pace with very similar growth rates in Q1 and Q2.
2nd element is obviously about the web. Web continued to help pick up the slack as consumers shifted online. Online sales up 44% in the half with France growing faster than international. Online accounting in the semester for 40% of sales, up 26% versus 2 years ago. As mentioned by Julie, marketplace is really satisfactory in that set of results and did develop above expectations.
Finally, and it's an important element, I think we may talk a lot about this today. The H1 context is a lot about as well the supply. We are not immune to the global disruption on supply chain from Asia. And as in many other sectors, we have been facing new disruptions since the start of the year. In terms of sourcing and supply, we managed to contain the rise in shipping costs so far, but we continue to face capacity constraints in maritime transport and our suppliers also face bottlenecks that make their factories run below capacity.
As a result, our inventory rebuild is taking longer. There are issues that we expect to continue to see over the second half. Those 3 operational elements are essential to understand the profile of the performance of Maisons du Monde during the semester. And I propose now that we get into the detail so to understand as well all the dynamics. On slide 14, let's look at the building block of our H1 sales growth, classic bridge that we comment every time.
As you can see from the bridge, we added €173,000,000 in sales between H1 2020, H1 2021, representing growth of 35.5 percent during the semester. I think it's important to remember that it's close to €100,000,000 more versus H1, 2019, I. E, 17% growth on a reported basis. Roughly, and to make things simple, €125,000,000 extra on web and €25,000,000 less in stores due to COVID versus 2019, but very good development versus this pre pandemic season. A major part of this growth you can observe was organic as like for like growth accounted for more than €150,000,000 of additional sales showing a strong pickup in activity in stores as I commented and obviously online were being very dynamic.
Development added to the period another €9,300,000 in sales with roughly 2 thirds of that, I. E, €6,000,000 coming from stores opened in 2020 and the remaining third coming from this year's opening. Finally, Modenie and Renault added another €9,000,000 in sales. Let me just spend a couple of seconds on Moden, which notably increased 43% versus last year, adding €10,000,000 more than last year's sales, benefiting from market conditions with people moving to the south of the U. S.
And from its capacity to source product in an efficient way. All told, I would like to flag another element, which is about COVID defects. Classically, since last year, we are commenting on this development and this impact. We estimate that lockdowns in the first half reduced our total sales in the period by €45,000,000 down from the €110,000,000 of last year in the same period. This represents a balance between a sales decrease of €60,000,000 in stores, partly offset by additional online sales of €15,000,000 Turning to slide 15.
We break down our performance by quarter. So to give you a more precise view of our performance and visually observe by business development over 2 years. As you can see, our sales were almost similar in both quarters, believe me, not so many still that way, but Q1 and Q2 are €331,000,000 That performance is obviously quite sharply above last year, which was marked by strict lockdown as the pandemic set in last year. In both quarters, our sales were roughly 35% above the corresponding quarters last year. Part of this growth is, of course, due to the fact that we operate 3 more stores on a net basis that we did in H1 of last year.
But again, what's particularly noteworthy is that our performance, we can visually observe that, is significantly above prepending mix on each of the quarter, with Q1 18% above Q1 to 2019 Q2, roughly 17% above the same quarter 2 years ago on a reported basis, which is an equivalent like for like growth of 12% over the semester. All of this reflects the steady progress we have made on our strategic priorities, such as digital notably the marketplace. What is important to observe is Q1 profited from the strong growth of WEP, 76%, remember. Q2 saw a strong rebound in store activity when reopening as of mid May. Just to conclude on this slide, note also that we did not start our traditional promotions since really the back end of June, June 30 this year.
So therefore, had virtually no impact on our H1 performance. Finally, looking at the graphic, I think it's important to bear in mind what we can see on 2020. 2020 post lockdown created an H2 high comparable base, notably for stores and that the 2nd full half year last year was significantly stronger than the first half, creating a high hurdle for us to jump this year in H2. We will comment later on the H2 business outlook. Let me switch to Slide 16 now, where we focus especially on online.
Again, it will not surprise you that the digital sales in the first half accelerated sharply this year versus last year to reach €260,000,000 over the period, nearly double the size of 2 years ago basis. As said, growth was particularly strong in Q1, 76%, as a real ramp up last year began in Q2. But Q2 this year again is quite strong at 25%. Overall, underlying sales in H1 of this year represented 40% for 0 of Maisons Dumont. Total sales, a 2 point increase over the same period last year and 12 point jump over Q1 2019.
In that scope, France was the top performer, ahead of Germany, Italy and Spain. Overall, 2 years CAGR is above 30%. On a more operational classic KPI, mobile continue to be far the biggest driver of our online activity. In H1, our best in class mobile platform represented 72% of traffic, 5 points more than in 2020 and 39% of sales, 10 points more than last year, very good development. I would like to flag as well and to highlight that as well that the number of store only customers who bought online for the first time was up 38 percent, while online traffic overall was up 40%, four-zero.
On the following slide, we move the spotlight to our store performance. Overall, as I said, stores are up 30% versus last year, but down 5 market was impacted by the lockdown measures in Q2. Market was impacted by the lockdown measures in the different markets. In H1 of 2021, stores were opened 70% of the time compared to 66 last year. The opening rate of our international stores was higher than that in France with a key exception in Germany, where I do remind you that stores were closed fully from January to the end of May.
That, combined with expansion of side of France, contributed to the weight of international in our mix, being 4 points higher in H1 this year than it was in the same period last year, 5 points higher than 2 years ago. Before moving to the profitability part, let's turn now to categories to conclude on sales. Declarations are up 40%. As you can see on the slide over the past 2 years, we have seen a shift in balance with decoration increasing as part of the overall mix. It now represents 51% of total sales versus 49% 2 years ago.
Part of that, we may recognize is due as well to the increasing to the fact that we are supporting shipping capacity constraint in H1, making it harder for us to restore furniture in our inventory. But the increase of this ratio is strongly based on the success of our decoration collection. Despite supply issues and preventiveness in securing a return to normal of inventory, as I just said, I would like just to flag that we have for furniture as well a strong 30% growth during the semester, with outdoor keeping performing very well as mentioned already in May. Other bestsellers, including arches, sofas, frames, dressers and textile. Closing the section on sales, I would like now to switch and to turn to EBIT on slide 19.
As Julie mentioned earlier, we're trying to positive first half EBIT of €52,400,000 in H1, reversing the negative exceptional €7,300,000 recorded last year in the semester. This came with a historically high margin of 7.9 sort of a one of a kind, up by a very strong 942 basis points. I mentioned one of a kind indeed because this level is partly related to what I would call a non normative cost baseline and some elements of payroll or rent were not at the right level due to continued subsidies, albeit less than last year. However, this rebound shows a profitability fully on the back of the excellent sales performance. This adds EBIT growth was largely driven by positive mix, I mentioned, driven by more decoration as well as less promotion.
For your information, promotion ratio decreased year on year by 2 points. 2nd, we have obviously on the back of this growth a positive leverage in the gas that is notably visible on logistics. Logistics is, however, moving ahead in the ambition, improving well with strong operating efficiency in transport to store and customer. That's so fair to highlight that this margin expansion was held by the fact that last year, we had to face COVID-nineteen related one off costs that obviously did not reoccur this year. For example, last year, we had extra logistic costs related to the Ducker strike in France that we did not incur again this year.
And some of other extra costs related to logistics to COVID period and sourcing. But this positive leverage is as well visible on store and central cost despite the fact that we benefited last year from a higher amount of government support on wages and we negotiated store rental reduction. Net of absorption and incremental costs, we can see a favorable development on ratio of 138 basis points. Finally, and I think it's important to have always this element in mind, to support web growth and other initiatives to support activities of Maisons Dumont, marketing investments increased to an absolute amount of €35,000,000 a rise of €13,000,000,000 1.3, mainly on web in parallel with some savings for catalogs. Those are essential to support Maisons du Mont Grand Equity and develop web and store traffic.
We are really keen on developing these investments, always considering a strong discipline and demanding culture on return on investment. Closing on EBIT and before handing the mic over to Julie, let's now turn to cash flow on slide 20 and then briefly to EPS. On cash flow, you have seen that we recorded a €15,000,000 increase in free cash this semester, reaching €57,000,000 This evolution was primarily driven by 2 factors. First, €64,000,000 positive swing in EBITDA for which I just gave you some of the main components explaining the elements on EBIT. 2nd, unchanged working cap requirement that was €44,000,000 lower than this year than last year.
Remember, it was mainly related to inventory movement in the first half of twenty twenty and twenty twenty one. You may remember that at this point of time last year, we stopped all inventories orders following the 1st COVID lockdown in March. As a result, inventory declined to a rather low level. So this induced a rather sharp improvement in the working cap requirement last year. This year, we have had exactly the opposite effect.
We are in the process of rebuilding our inventory, so there is a swing in the other direction. As a consequence, working cap to net sales ratio went from a negative to flat due to this higher level of inventory and accounts receivable compared to H1 last year. Having said that, I'm talking about inventory. We are running behind what we were forecasting and the increase of inventory remains a key objective for us in H2, but it will take longer. Free cash flow changed as we include the €5,000,000 increase in CapEx versus H1 last year, reaching €24,500,000 This increase is mostly for store development.
CapEx to net sales stood at 3.7% in the first half, but we do expect this ratio to increase to a level very close to 5% in the full year. Turning now on slide 21 to earnings per share, which we consider a very important metric to measure our performance and demonstrate the importance we attach to the shareholder value. In H1, our EPS increased €0.77 to 0 point €42 as a result of our significant top line growth and what I commented on margin expansion,
all of
this brought €0.90 per share. In addition, you can observe a slightly negative effect on the finance part, mainly due to some ForEx year on year effect. Regarding tax, we have a quite stable ETR. The negative is driven mechanically by increase of profit, but this one being limited by a 2020 tax accrual that created a one off variable base element. Again, good developments translating and really showing the conversion of profitable growth agenda.
With that, let me hand back to Julie.
Thank you, Regis. So on Slide 23, we focus on our commercial priorities for the rest of the year, starting with addressing the supply chain challenges in Asia induced by the COVID outbreak. Indeed, we are working to manage maritime freight capacity constraints and cost hikes driven by the expanding pressure on freight from Asia, more specifically China, India and Vietnam, with container prices reaching new highs. Furthermore, the infra typhoon that hit the East Coast of China over the last couple of days, especially the 2 main ports of Shanghai and Ningbo, has been creating further disruption, putting the activity of these ports on hold for a to be defined period of time, could be days, could be weeks, based on the history of the Suez Channel and more recently of the Yanqian Port in the Tianjin region, the 3rd main port in China, which was closed for 2 weeks in June, this momentary interruption is likely to drive further delays and increased pressure on container and freight forwarder capabilities for a certain number of weeks. Manufacturing capabilities are also currently reduced in Vietnam as the pandemic is expanding rapidly in several regions, especially since the last couple of weeks, including in the region of Ho Chi Minh where several of our suppliers are.
Our own factory is currently closed for an estimated 4 to 5 weeks. Finally, although the situation in India has been slightly improving since our last communication, capabilities will stay significantly reduced over the next quarter after a 4 week lockdown in May June. As a result of all this, a key priority for the semester will be to keep working towards normalizing the supply level in our different product families. Our teams are fully mobilized to strike the right balance between product availability and cost management, supported by a series of tools and processes that we implemented last year. Besides addressing these short term challenges, we will not lose sight of our strategy priorities, which stay broadly unchanged.
Therefore, we will keep strengthening our offering based on reinforced consumer feedback loops. We will maintain our efforts towards our sustainability and product waste management, especially by advancing our efforts on product repairing and recognitioning. And finally, as said before, we will continue to reinforce our omnichannel model by accelerating our digital growth and preparing the launch of the marketplace in the French store network and a second online market both planned by 2022. On Slide 24 now, let me share with you a bit of color on how we see H2 activity so far and how we view the half at home. 1st, commercial activity.
As we stand today, our stores are open and functioning under normal hours. July activity has been sustained by summer sales promotions that began, as Regis said, on June 30 versus July 20 last year. However, we are not seeing in Q3 a repeat of last year's post lockdown boost. Indeed, after strong traffic in stores and online in the first half, traffic is now normalizing as consumers have shifted part of the spending to other categories such as travel and leisure activities following alleviated sanitary measures starting end of May. In addition, we will be facing a substantially higher comparable base in H2 as last year's activity was very much skewed towards the second half with a 5% sales growth in H2 compared to a minus 13% in H1.
And we also remain vigilant concerning the evolution of the health situation in Europe, where, as you know, COVID cases are on the rise again. After commercial activity, second item, product availability and gross margin. As we said and I have just detailed, we are continuing to see challenges on the supply front, and we cannot rebuild our inventories at the pace we anticipated. We also expect our H2 gross margin to be impacted by maritime freight price increases to a higher extent than what we planned for at the end of Q1. To face this uncertain environment, our teams are fully focused on providing the best possible experience to our customers and striking the best possible balance between supporting sales and protecting margins.
So let me conclude on Slide 25 with our full year guidance. When I presented our 2020 full year numbers back in March, I told you that last year was very much a tale of 2 halves with a sharp drop in H1 and a strong rebound in H2. Well, the same can be said of 2021, but in the reverse order. Our H1 was indeed very strong, and we faced a higher comparable base in H2 as well as a number of challenges. One could say we are too cautious based on these excellent results to date as our full year guidance implies negative growth of around 10% for the second half.
Well, let me be very clear on this point. This is not our main working scenario, and we are currently implementing a detailed action plan to maximize product availability for the remainder of the year in our constrained environment. That said, uncertainty is currently too high on a number of factors, and the product availabilitycost equation needs to be managed carefully. This is why we feel it is appropriate at this point in time to leave our full year guidance unchanged. We will update the market at the Q3 results call.
Therefore, based on the excellent H1 performance, we are confident in confirming our full year targets: high single digit top line growth year on year with a broadly stable store count at year end and improved EBIT margin increasing by up to 50 basis points versus 20 20 and free cash flow higher than last year. I'm also pleased to announce today that we plan to hold a Capital Markets Day in Paris on Monday, November 8, to present our updated strategic road map. We will provide more detailed information on the exact location and time in September and look forward to seeing you there. This ends our presentation, and Regis and I are happy to take your questions.
And your first question comes from the line of Nicolas Langley from Exane BNP.
Yes. Hello, everyone, and thanks for the presentation. I've got 3 questions, please. So first, it seems that the recovery in France has been a bit softer compared to international in Q2. So you mentioned the impact of the same period timing and there were also some stock closure impact, I guess.
But beyond those two elements, are there any reason why we should see divergence of trend between France and the rest of countries? And are you seeing any diverging consumption trend in France compared to other countries? 2nd question on the gross margin. So you mentioned some headwind for H2, but you had some positive mix effect in H1. So what should we think about the gross margin H2 taking the different variables in mind?
And finally, you mentioned some product shortage impact in H2. Are you able to quantify what impact on sales you are expecting from that?
Thank you.
Thank you, Nicolas. I would take your questions 1 and 3 and Regis will answer on the second question on margins. So to your questions around recovery trending difference in France versus international, well, it is very much due to indeed the store opening ratio as we call it, which was very different in France and internationally in international. I'll tell you some more specific numbers that could help. So in France, it was basically stable, 67% of the time this year versus 68% last year, so really stable.
But international was pretty different. We were in H1 open for 74% of the time versus 60 4% last year. So it's a 10 point difference. And this was particularly the case in Q2. International was open for 80% of the time versus only 50% last year.
So this explains completely the difference in recovery trends that we could see. Otherwise, there is no big change in consumption patterns that we can see. On the 3rd question so maybe second question, I'll get back to the 3rd.
Yes. Okay. Thank you, Julie. And thanks, Nicolas, for your question. Indeed, we do envisage gross margin to be with an impact, which is higher than the one we mentioned in May, if you remember.
Already at that point of time, we were flagging probably up to 200 basis points of combination of raw material and freight at this moment of time. You may observe that at the moment there are already soaring increase of spot market on the freight, marketing freight. We are not staying at that level. However, despite having, I would qualify, good contracts with our freighters, we are, however, exposed to some volatility and inflation to secure the capacity. So we do envisage now a higher impact of those elements, probably to reach 300 basis points for the company.
In parallel, we are not changing our priorities at this point of time. I think the uncertainty we are flagging today does not change our priority for the rest for the short and mid term. So we do envisage to keep investing behind growth and support all the priority we set at the beginning of the year. So these are two reasons: one for gross margin, the other one will have an effect on EBIT. That's yes, today put me in the situation to explain about a decreasing H2 margin versus last year.
So yes, you mentioned mix. I'm not at all concerned about the development of decoration in general, but indeed the furniture availability will have an impact on that one. So we are monitoring inventory management there. Obviously, if the trajectory of H2 may be in the negative zone, depending on the way those, let's say, turmoil or challenges could translate into. There will be a negative leverage effect on the equation, which is an element that will appear on the equation of the gross margin.
And to answer your third question on product shortage impact, so if you if we remember the last call of indication, we said that we had manufacturing constraints in India that would impact Q3 in the region of EUR 50,000,000 to EUR 60,000,000. While we do have this impact in Q3, it's a little bit less in the region of €10,000,000 less because the situation has been slightly improving, but it's still materially impacting Q3 performance and a bit of Q4. Now the two elements that have occurred in the very last few days are China with the recent closure of the Shenzhen Harbor in June and now the Infa Typhoon over the last couple of days to Ningbo and Shanghai. So China, plus plus and then a bit of Vietnam with the pandemic spreading over the last couple of weeks. So these two countries and the sourcing constraints linked to that will be affecting more Q4.
So we could see more product shortage in Q4 compared to Q3. And in terms of product categories, this would impact more furniture compared to decoration for a number of things. But in Vietnam, and the supply is mainly composed of furniture. And second, in terms of shipping priorities, we are now prioritizing decoration for the end of Q4 to secure the Christmas season and also the implementation of the new collection in the springsummer next year. So shortage will be observed more in furniture compared to decoration.
Yes. Okay, perfect. And just
to come back on Regis' comments on the gross margin. So if you look at the H1 'twenty one gross margin, what was the impact of raw material and freight costs only for H1?
It was negative already, more in the direction of what we mentioned originally at the time we communicated the guidance. So it's more EUR 100,000,000 to EUR 150,000,000. It does not translate into the gross margin level as you have seen because some of the elements I mentioned visavis mix, vis some one off costs last year in term of freight did reverse this element. One element I could flag out proactively because visavis this development of freight and raw material for the rest of the year, I would like to complement my answer. We have decided to go for a selective pricing to when I say selective, it's really category, subcategory by subcategory to compensate part of this.
I think we are in a situation now that we can consider that some of these elements will last for a portion, and it was important for us to mitigate this as well. So pricing will be embarked into the equation. The reason I did not flag it to your question on H2 is that the effect will be limited due to the implementation of it and the phasing of this implementation because obviously, we will manage this price increase in strategy along the way we implement the new collection notably. So effect this year will be limited, but H2 2020, sorry, effect will be there to help us obviously monitoring the cost margin, which remains a key priority in everything we do, so to support the equation. All right.
Okay, perfect. Thanks a lot.
Thank you. And your next question comes from the line of Clement Genelot from Bryan Garnier. Please ask your question.
Yes, good morning to everyone. I've got questions from my side, if I may. The first one is on Q1 trading. Are you seeing softening trend in late June and also in July, given the full year earning of our restaurants in and so on across Europe and especially in France? And my second question is on the marketplace.
So you said that the marketplace already quite a contributing to the sales in H1. Is it also the case in our EBIT? And do we have to, let's say, expect another contribution to EBIT in H2? And is it allowed to, let's say, quite offset some additional costs on the raw materials and so on?
Okay. Thank you, Clement. I will take both of your questions. So first, on the current trading. Indeed, you're right.
The evolution should be observed month after month. And if we take traffic, which I think is a good proxy for market demand, I can comment on store traffic and I can comment on also online traffic, but like really for the category based on Google searches and different market indices, we have a good view on the category itself, which do translate into our numbers by the way. So in terms of store traffic, we saw a very strong Q2 in traffic and sales with a material difference, as we said, between France and international due to different store opening ratios. But even in France, we had a positive traffic trend in Q2. And indeed, it started to slow down from June onwards and also in July and shifted to negative growth in July concerning store traffic.
And it's really interesting because in the retail world, in the physical retail world, we did see because we follow a number of panels and indices, we did see an uplift in store fashion retail. So it seems like people wanted to shop around again and buy their new dresses for summer and really go back to physical stores, but really for summer items and especially fashion. When it comes to online, we did see a very strong trend in traffic up until April. And then it started to slow down in May and a bit further in June and a bit further in July. And the online dynamic was pretty different because we did see also this decline in other categories such as fashion, but we saw a major increase in categories such as travel and leisure.
So it feels I mean based on all of the numbers we see on market and also based on our own traffic numbers, it feels that really from the 2nd fortnight May, then June, then July in this incremental way, we did see traffic fading a bit away. So is it very much contextual? Part of it, yes, because I think that after people have gone on holidays and bought their some addresses, they will go back to spending on other categories. And some of it could be dependent on the consumer confidence index, depending on the evolution of the health situation. But it is true that there is a very much of a summer effect here.
To your second question around the marketplace, so just to clarify, it is indeed a very big portion of the French online GMV, like this 20%, which again and as market indices say again is a very strong performance after just a few months of operation, we're actually beating record in terms of marketplaces as our partners say. And we are one of the fastest expanding marketplaces in the sector over the last few years in France. So this is really good news. But this is in France, of course, because this is only country we're operating. So France is half of the online activity.
So this 20% contribution on French activity is only 10% on total online activity. It does have a positive contribution on EBIT, but this contribution is very limited right now. Why? Because we have decided to proactively invest this year and again next year on marketing to really support the deployment of the marketplace to make sure we have this kick effect because that marketplace runs on the network effect system. So we really need to boost traffic on the marketplace.
And as category demand is a bit slowing down, we will further invest in marketing in Q2 to support online growth including marketplace growth in France. So the EBIT contribution of the marketplace structurally is positive to a material extent, but this year will not be seen for the reasons I've said.
Understood. Thanks.
Thank you. And your next question comes from the line of Florent Cittin from MidCap.
Just one question on my side. It's regarding your online profitability. Are you able to isolate the online EBIT margin versus stores EBIT margin? And do you see any improvement of online profitability due to the volume increase on it? Thank you.
Yes. Thank you. I'll talk to the online P and L structurally and then the evolution. So we do we can report and we do follow EBIT and P and L by channel. And we've been saying a number of times in past communication that the big strength of a model that online is not dilutive compared to other models.
So this is why we can expand online in such a healthy way. And as time goes, to your second part of your question, it goes better and better for 2 reasons. First, as you said, scale. So indeed, we are squeezing fixed costs based on scale. And also because we are developing the omni channel model, which is so close to our heart.
And what we could see that the share of online orders fulfilled at store level, so the free delivery in stores really does contribute to part of the relation of the online model. And this growth has been significant especially since end of last year where we really did accelerate on deployment of click and collect. And we see the positive contribution of that to online EBIT. This is one of the reasons why we think omnichannel mobile really is the key. And furthermore, the marketplace as we go, not this year as I said, but in the next few years, will also be an element that will further improve the EBIT margin profile of online.
Okay. Thank you very much.
Thank you. And your next question comes from the line of Guillaume Cristel from Alize. Please ask your question.
Thank you very much for taking my question. Actually, I would have 2, if you allow me. One would be a follow-up on an earlier one on the marketplace. Could you give us some color on the gross margin level for the marketplace against the overall Maisons du Mont margin? And second one would be, could you give us an idea on the timing for active net new openings?
Well, space has been stable this year. When would you consider starting an actual active openings campaign? Thanks.
Okay. Thank you. I will answer your questions. So first, on the marketplace and the gross margin, we did say when we announced the launch of the marketplace 18 months ago, that we would look for a sales commission and that we will look for a dropship model that is the vendor would actually fulfill the order. So we would get the self commission out of the order value.
And then after the logistics and the customer care services would be supported by the vendor. So gross margin is kind of like net margin and with a very nice drop through down to EBITDA and EBIT. So this sales commission, we said back in the time that we would be around 15%, which was a bit above market standards, but we thought that we could defend that based on the quality of our proposition. And we are there. We are there and stably there and I think in a sustainable way.
So I think this is really good going forward and will contribute nicely, as I said, to the EBIT profile improvement of the web. To the active net new opening question, so this year will be pretty stable, flat plus over the 2nd semester and then the year. The Capital Markets Day in November will be the occasion for us to give you more details on our plans going forward. Again, as we update on our strategic plans overall, we will obviously update on this part.
Thank you.
There are no further questions on the audio lines. I hand over to Christopher Walton to go for the web questions.
Thank you very much. We've got a question from Christian de Vima. Christian's question is, the selective price increase effect will be limited in the second half of twenty twenty one, but are you aiming to offset a large part of the raw material and transport price increases in H1 of 2022?
I can take this one. Thank you, Christian. It will be a portion. It will be a portion because we want to maintain our price competitiveness and we have other elements in the toolbox to manage gross margin. Mix.
We mentioned the leverage behind the growth, some operational efficiencies as well. And we do count on these priorities. It's really important. So we maintain equity and image of pricing of Maisons Du Mont. So I think this is why I mentioned selective.
It has to be both, I would say, enough so to cover the risk embarked, but at the same time preserving capability to maintain our growth agenda. And we have another question from Marillyn Foehr from Societe Generale. Is the increase in marketing spending will be recurrent over the second half? Given your expansion plan, what level of CapEx do you project for the full year? Okay.
Thank you, Marillyn. So two questions, 1 on marketing, advertising investments, 2nd on CapEx. On marketing, yes, we monitor month by month our advertising investment agenda and marketing investment. We do envisage indeed so far at this point of time an increase on H2. I will not quantify, but definitely it should be negative in the way you look at EBIT bridge.
For me, it's a positive regarding supporting the growth. I mentioned during the call that we are really monitoring this with a strong culture of return on investment and I do preserve this as a key element for decision. It's really monitored month by month. Obviously, you know that a big portion of this investment are on the web. And web, it's really important.
We go for investments that bring traffic, that bring extra transformation on the traffic, that's the intention. So to that perspective, as long as we can monitor the positive behind investment, we will keep monitoring this way the trajectory to support the growth. On CapEx, I did mention it indeed. The ratio on sales at the end of H1 is quite low. We are behind our internal agenda due to the pandemic and the reason of opening and maintenance of the network as well as some delays in other projects.
As I mentioned, by the end of the year, we do rest of the year. On sales ratio on CapEx for the rest of the year. Hope it helps clarifying Marini.
So I don't see any more questions. I'd like to turn the call back over to Julie.
Thank you, Chris. So just a couple of words to recap. Just to say that we did turn an excellent H1 performance, which does attest, in my view, to the strength of the model and how it fits to this real sort of new world, so to say, with strong brand and consumer proximity, with CSR historical track record and recent acceleration and finally to the complementarity of our channels and real strength of online. So the strength of the model allows us now to fully confirm the full year guidance despite the context as we described. So one might say we are on the cautious side, but we think this is appropriate position for this point in time, and we will be happy to update the outlook on the next call at Q3 results.
Thank you very much for your time, and I wish you a very good day.
Thank you all. And obviously, Chris and myself are available today to follow-up on this call up this morning. Thank you very much.
This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.