Q4 2023 Inter Parfums Inc Earnings Call
Participants
Karin Daly; Investor Relations; The Equity Group, Inc.
Jean Madar; Chairman of the Board, Chief Executive Officer, & Co-Founder; Inter Parfums Inc
Michel Atwood; Chief Financial Officer, Director; Inter Parfums Inc
Linda Bolton-Weiser; Analyst; D.A. Davidson Companies
Korinne Wolfmeyer; Analyst; Piper Sandler & Co.
Hamed Khorsand; Analyst; BWS Financial Inc.
Presentation
Operator
Greetings, and welcome to the Inter Parfums 2023 fourth quarter and full year earnings conference call and webcast. (Operator Instructions) As a reminder, this conference is being recorded. At this time, I'd like to turn the call over to Karin Daly, Vice President at The Equity Group and Inter Parfums' Investor Relations representative. Thank you. Please go ahead.
Karin Daly
Thank you, Diego. Joining us on the call today will be Chairman and Chief Executive Officer, Jean Madar; and Chief Financial Officer, Michel Atwood. On behalf of the company, I would like to note that this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected results.
These factors may be found in the company's filings with the Securities and Exchange Commission under the headings Forward-Looking Statements and Risk Factors in our most recent annual report on Form 10-K. Forward-looking statements speak only as of the date on which they are made, and Inter Parfums undertakes no obligation to update the information discussed.
As a reminder, the company's consolidated results reflect its two business segments, European-based operations and United States-based operations. Certain Prestige Fragrance products are produced and marketed by their European-based operations through its 72% owned French subsidiary, Interparfums SA. When the company refers to their US-based operations, they are talking about their wholly owned subsidiary. It is now my pleasure to turn the call over to Mr. Jean Madar. Jean, you may begin.
Jean Madar
Thank you, Karin, and good morning, everyone, and thank you for participating in today's call. We are seeing ongoing momentum in the fragrance market, particularly within the prestige and premium category in which we play.
Much of the growth we have seen can be attributed to premiumization as consumers are increasingly seeking high quality and higher concentration fragrances in today's market. The ongoing demand in our prestige portfolio of brands led to a record net sales of $1.3 billion in 2023, an increase of 21% compared to 2022.
At comparable foreign currency exchange rates, net sales increased 20% in 2023, of which 5% was related to new brands. Similar to 2022, our successful growth during the year was attributable to our established brands and our new product pipeline dominated by extensions.
Sales for each of our largest brands, Jimmy Choo, Mont Blanc, and Coach rose above $200 million for the year, representing 49% of our total sales. Our fourth largest brand GUESS grew sales by a robust 23%. As we strategically planned pipeline of innovation, we believe GUESS is well on its way to also surpassing $200 million in sales in the coming years.
In our European brands, there were also significant gains made by our midsize brands in 2023, including Russia, Kaluga, Van Cleef & Arpels, increasing, respectively, 11%, 24%, and 20%. As you may recall, Donna Karan Dage DKNY joined us in July 2022, which explains the significant 200% growth in 2023. We anticipate that the substantial growth rate will normalize but will remain healthy, and the brand will well exceed $100 million in sales in 2024 as it continues to benefit from our expertise.
Relative to our newest brand, we began shipping lower-cost segments in January of this year after rebooting the brand's existing segments portfolio and creating all new freshly developed goods for our retail partners and consumers alike. Our Cavalier fragrance reboot coincides with the fashion house Renaissance efforts to evolve the powerful creativity of their apparel while opening new stores and increasing visibility. We have blockbuster launches in the US for both brands later this year.
As you may recall, our entry into Italian operations in June 2021 was strategically timed coinciding with the signing of the federal government. This decision, I think, was well-founded as the Italian fragrance market witnessed a plus 12% sales growth in 2023. In fact, Ferragamo fragrance sales outperformed the market, achieving 21% sales growth in the last year.
The customer get into Jan noted that they expect to see similar sales expansion in 2020. While we have seen new entrants into the Italian market across the industry recently driving healthy competition, we are confident our Italian affiliate affiliate will take advantage of the booming demand in Italy.
I have two questions, Bob. We have also leverage this new affiliate to serve as an anchor point to attract other Italian brands and increased company scale. I'm just starting to distribute all the brands from the United States based operation, January 2023, our team in Italy has also started to distribute the drug from our European-based operation since January 2025, problems with our Italian operations, managing that distribution for both segments.
We will expand cross-company synergies in that market and continue to improve gross margin as we sell directly rather than through a distributor routinely tell you started shipping debt-to-cap to cover the segments at the beginning of February 2024, and we look forward to fully capturing the potential of this other Colombian Fitch also achieved significant sales growth of 25% in 2023, in part due to the sustained popularity of our legacy sites.
Our initial success in the Phase 1 distribution rollout of CES was a leading contributor to the brand's growth in the back half of the year, and we expect to see further sales expansion as we commence Phase 2 in the first quarter of this year.
On another note, I've spent a lot of time traveling to meet with retailers, buyers and wholesalers across the globe 2024 is off to a great start. In fact, I recently visited Mexico to meet with buyers, and I was very encouraged by what I saw, including empty shelves representing a healthy sellout, particularly for Ferragamo, Loblaw guests and Generali. With the holiday season behind us and strong reorders, we are enthusiastic of the growth prospects in the 3G.
Turning to our stimulating pipeline of innovation. During the first quarter of 2024, we debuted new fragrance collection, formal Claire. We introduced five new ultra-luxury, assume six fragrances called list, so may not clear. And we developed also a premium quarter of Folgers tougher Donna Karan cashmere collection. The layoffs and more concentrated fragrance were unveiled in conjunction with the relaunch of Donna Karan fashion business and the reveal of the spring 2024 company, these premium fragrances deeply rooted in more than 200 department stores across the United we have.
And then we go aging lineup of products that for the balance of 2024, in addition to the new blockbuster fragrance for Caverion like cost I mentioned earlier, there is a new guest fragrance launch of the second quarter as well as a little more flanker in the first quarter extensions of Jimmy Choo, Taiwan through mobile Legends, Coach dreams and robust recovery signature offset to distribute throughout the year.
Furthermore, brand extension are also in the works for Ferragamo, MCN, Abercrombie, Hollister and discovery around with ongoing innovation in the development and marketing of our portfolio of fragrances, coupled with the overall strength in the fragrance market, we are poised for a dynamic year ahead.
We have successfully onboarded over 18 new team members just for our United States-based operations, exemplifying our unwavering commitment to developing robust operations capable of effectively managing and optimizing our the diverse portfolio of prestige mass in the ever-changing world of beauty, fragrance, innovation is at the forefront for our brands does with category penetration on the rise in the United States and in Asia and the continued shift towards more premium fragrances, we believe that the consumers' heightened appreciation and curiosity for fragrances, we'll be competing first for the future. I will now turn the call over to Michel for a more detailed financial review. Michel?
Operator
Mr. Atwood, you may be muted. Go ahead.
Michel Atwood
Oh, I'm sorry. Thank you, Jean, and good morning, everyone. As we reported yesterday, consolidated net sales grew 6% in the final quarter, reflecting 13% and 2% growth in our US-based and European-based operations, respectively.
For the full year, we are pleased to have achieved record sales and earnings results as previously disclosed, the quarterly growth rate in comparison to the full year reflects the elevated sales baseline from the preceding year. Compared to 2019, which was a much stabler year, our sales were up 85%, both for the fourth quarter and the full year 2023.
On a consolidated basis, gross margin expanded 30 basis points from the fourth quarter of 2022 to 64.7%, leading to a full year gross margin of 63.7%, broadly in line with the prior year with higher selling prices and channel product mix, offsetting the inflation headwinds and segment mix. In 2023, European operations gross margin eroded by 100 basis points from 68.2% to 67.2%.
However, as previously disclosed, the bulk of the erosion was attributed to the inventory write-off in the second quarter. Excluding this impact, gross margins would only have eroded by 20 basis points with pricing and regional mix almost entirely offsetting a higher inflationary costs in Europe. US-based operations' gross margin, on the other hand, continue to expand significantly from 54.7% in 2022 to 57% in 2023.
The US margin expansion stems from several factors, including price increases we took early in 2023 that were not fully offset by higher cost of goods due in part to our ongoing cost containment efforts. We also had favorable brand and channel mix as a larger portion of our higher priced fragrances are being sold directly to retailers as opposed to third party distributors. An example of that is what Jean explained is happening in Italy. We're also seeing that in the US with the US market growing faster than the rest of the of the other regions.
And then lastly, a significant increase in sales in 2023, which has allowed us to absorb fixed cost, namely manufacturing and depreciation of tooling. As expected, selling, general, and administration expenses as a percentage of net sales were 59% for the quarter, which is 450 basis points higher than the prior year period, mainly due to higher promotions and advertising spending.
For the full year, SG&A expenses as a percentage of net sales were 44.6% compared to 45.3% in 2022. This decrease was largely driven by continued sales growth during 2023, allowing for better absorption of fixed operating costs and favorable segment mix. As previously disclosed, we continue to invest heavily in A&P to build brand awareness, remained competitive and sustain our growth.
During the year, we dedicated 19.7% of net sales to advertising and promotion. And while we again spent below our target A&P of 21% of net sales due in part to higher than expected sales growth, we continue to deliberately converge towards this figure.
In fact, in the critically important fourth quarter of 2023 spending was 23% higher than in the prior year period, representing 33% of net sales, up from 28% in the fourth quarter of 2022. As you know, our fourth quarter, we typically spend double what we spent in the other quarters.
Royalty expenses are included in SG&A, an average approximately 8% in 2023 generally in line with the last three years. And finally, our operating margins aggregated to 19.1% for 2023 or 120 basis points improvement from 2022.
We closed the year with working capital of $514 million, including approximately $183 million in cash and cash equivalents and short-term investments resulting in a working capital ratio of 2.6 to 1. A long-term debt at December 31, 2023, was $128 million associated with the Paris headquarters and low-cost license acquisitions were our two main investments on the last couple of years.
From a cash flow perspective, accounts receivable was up 19% from year-end 2022. The balance is reasonable based on 2023 record sales levels and reflects a strong collection activity as days sales outstanding decreased slightly to 60 days in 2023 as compared to 64 days in 2022. Additionally, inventory levels are up 25% from year end 2022 of which inventory days on hand increased to 249 days in 2023 from 231 days in 2022.
This increase was fully anticipated and is primarily explained by the buildup of inventory related to the newly acquired licenses for lower costs and Kibali, which began shipping to customers in 2024. We expect inventories to start normalizing now that we have a sales and this inventory in our base.
And finally, touching on our 2023 execution and 2024 guidance, not only did we surpass our sales target of $1.3 billion in 2023 and achieved our all in bottom line goal of [$4.75] earnings per diluted share but on an adjusted basis and excluding the one-time tax assessment undergone by our European operations, we largely beat our bottom line guidance and achieve $4.82 earnings per diluted share, representing a growth of 22%.
For 2024 guidance, as we reaffirmed in yesterday's earnings release, the fragrance market, particularly in the prestige and luxury category, remains robust. This, coupled with healthy stock-in-trade level, gives us the confidence we can continue to grow and achieve approximately 10% annual sales growth to $1.45 billion. We expect first half growth to be a more modest, high single digit due to the seasonality of our pipeline of innovation and the sell-in of the newest brands of our portfolio.
However, we expect double digit growth in the second half. This will lead to an 8% increase in earnings per diluted share to $5.15. Of note included in our guidance the low-cost non-cash amortization impact of the acquisition cost is expected to reduce our 2024 earnings per diluted share by approximately $0.11. Excluding this impact, we are projecting EPS growth of 11% versus 2023.
While we are confident in the strength of the market and our ability to gain share with our overall portfolio, we have always remained our and we've always taken a conservative stance in our guidance. And this year, we are particularly keen on being cautious, especially in light of the ongoing conflicts in the Middle East and in Eastern Europe, given the potential for volatility and the lack of visibility at this time, we will revisit the subject of guidance as the year progresses. And as we attain greater clarity on the market and the successful offtake and expansion of our two new licenses.
Lastly, as announced in our press release, given our strong results, future prospects, and a robust financial standing. Our Board of Directors authorized the company to continue to purchase up to 130,000 shares through 2024. They also approved a 20% increase in the annual dividend to $3 per share from $2.50 per share. The next quarterly cash dividend of $0.75 per share is payable on March 29 to shareholders of record on March 15, 2024. With that, operator, please open the line for questions.
Question and Answer Session
Operator
(Operator Instructions) Linda Bolton-Weiser, D.A. Davidson.
Linda Bolton-Weiser
Yes, hi, good morning. So I was just wondering if you could comment a little more give us some color on those two regions of the world that you mentioned a little bit a lack of visibility, but Eastern Europe and the Middle East and specifically and the Eastern Europe, I know you had been shipping some excuse me still to Russia, I think in 2023, how much was that, you know, kind of roughly in revenue in 2023? And is that going to go down a lot in 2024? Can you just give us some more color on that? Thank you.
Jean Madar
Yes, I can try to. Good morning, Linda. Yes, we see a we see, of course, like everybody does in Europe. And even though the David, you know, it doesn't have a real impact on our sales and it makes us put some conservatism in light regarding the guidance when it comes to Russia for Russia, the very simple does not change we ship to Russia from the core, the products that are made in Italy or in France. We do not ship in Russia products that are made in USA. The business and share the size of [up to 4%] of our total sales, something like that. Michel?
Michel Atwood
Yes, it's [$50 million] or window, yes, whenever it's about [$50 million]. And that's kind of I believe it's actually disclosed in our 10-K.
Jean Madar
Do we expect this business to grow? No, but what we see is that the venues are not great from this part of the world and the and you and Sparks could run. We've not only stopped the business that we have a small business that we have in Russia, but it's also tension a rotten district, John Poland, et cetera, which represents a nice amount. That's why even though business is very strong, we have no reason to win. I prefer to have an approach that is more conservative.
When it comes to the Middle East, we do business, as you know, we have a very strong business in Saudi Arabia in Kuwait and the NDMA, each represents, Michel can give a percentage.
Michel Atwood
Yeah it's, about 8%. It's about 8% and Middle East and Africa represents [38%].
Jean Madar
I was in the region two, three weeks ago. Everybody here is fine. We continue to sell, but we see that if anything happens on the Midwest, we will see an impact on the region. So that's why we prefer to we'll have to wait and see. But our business, for instance, on cavalier about to have any more than 50% of the business is in the middle. So this is to give you some color of our own conservatism.
Michel Atwood
Yeah, just to build on, Jean, you know, I think the tone of caution is not relative to our business. The tone of caution is more coming from the macroeconomic environment, which we obviously don't control, but we're certainly feeling very good about the health of our brands, the level of offtake that we've had over a year ends and our ability to replenish and to successfully launch our two brands. But again, we are being prudent more because of the macro environment and by any concerns we might have with our business.
Jean Madar
But we think we will wait a couple of months before. I would say when we release the first quarter, we will review --. I hope we'll be able to to review the guidance, but not now.
Karin Daly
Okay, thanks. And then I know, Michel, you you were giving some color, I think previously that you felt gross margin in 2024 could be flattish. And then are you still shooting also for the A&P ratio to be about that 21% target in the year? Thanks.
Michel Atwood
Yeah, so hi, Linda. And she certainly are working towards a flat gross margin for next year with some pretty much the carryover pricing that we took this year, offsetting some of the inflationary costs that we might still expect. But broadly, I think the costs are contained and looking looking looking good for for now and on the A. And B, I think we've been very clear. We want to remain competitive. Some of the reasons why we've been below our 21% goal is because we continue to see a lot more market growth than than potentially anticipated.
And that obviously has an impact on our denominator as we do not divide the spending by about where sales we continue to plan or were gating and gating or investments. I'm sure we can land that number better. And I think I've been very clearly indicating that now for a few quarters that we're refining our ability to forecast and plan these expenses as the sales come in. So yes, you should assume that we will continue to work in that direction.
There's another element that's actually quite important to keep in mind here, and it's not always very obvious, but if you compare our European operations to our US operations, while the margins are roughly the same overall operating margins and have been converging, there's a big difference in our operating model, which is European operations has much higher gross margins, but also much higher IoT spending.
And if you compare that to US operations, it's the opposite, lower margins and lower A&P spending as the US operations becomes more and more like the European operations, you're starting to see the gross margins converging, but you can also expect to see the A&P also increasing as that business book starts to look more and more like the European one. And I think that creates some segment mix, both on the COGS, which is going to be favorable and on the A&P, which will be unfavorable.
Jean Madar
If I may add the 2023 our operating margin was higher, 19%, I think it's a great level. So it's higher than what it was in 2022 that is one of the reasons you know, Linda, I want to spend the seven advertising. Is that one, this advertising we spent a lot in the fourth quarter to ensure. And when I see that our new boosters and all our so the programs are sold through by the end of the year, EBITDA we are showing for the year after. So I think it's very important to continue to spend at this level.
Linda Bolton-Weiser
Yeah, thank you. And then my final question has to do with capital allocation. And that's a nice healthy, dividend increase, 20%. And you've had big increases in the last few years, know, quite frankly, your your free cash flow in 2023 was not too much above the dividend about. So I'm wondering why are you expecting to have more robust free cash flow and a better, a bigger margin of safety? And I just wonder if we should worry that your dividend is getting actually too high relative to your cash flow? Thanks.
Michel Atwood
Yeah. So if you look at really on what's been going on for the last couple of years, couple of years, right? As I think we've been delivering very healthy operating profit growth, the challenges that a lot of the that has been consumed and free cash flow either through the inventory and the AR buildup, which is commensurate with our growth, particularly, I would say, inventory. So inventory has consumed a lot of cash and what we're seeing at this point in time, is that out are we getting to a level of inventory that we feel is quite comfortable.
And we have now, as I laid out in my prepared remarks, we have built the inventory now for low-cost and for Kibali. And so we are expecting going forward that a lot less of our operating profit will be consumed through an increase in inventory. And so that will definitely provide us with some good tailwinds.
And then the last piece is we have made two significant investments that have consumed cash in the last couple of years. There's been the with the acquisition of art of our head, our headquarter. It does, and there's also the cost of purchase, which, as you all know is not typical in this industry. But so overall, we're feeling very, very good about our prospects for next year and our ability to generate more free cash flow from our earnings.
Linda Bolton-Weiser
Thank you. Thank you very much. That's it for me.
Operator
Korinne Wolfmeyer, Piper Sandler.
Korinne Wolfmeyer
Hey, good morning and thanks for taking the questions. I'd like to touch on how you're thinking about the outlook for both the cost and volume licenses this year. Does seem like the guidance you laid out is factoring in maybe a little bit more conservatism, and it does sound like you're being more prudent with expectations, especially with what's going on in Middle East. But can you just provide a little bit more color on how you're thinking about the trajectory for both these licenses this year and maybe how we could -- how or when or none in what areas, could we see some upside to both these licenses this year?
Jean Madar
(multiple speakers) go ahead, Michel.
Michel Atwood
So, Korinne, hi. Right now, we are assuming in our forecast about $90 million in combination, both for low-cost and for Kibali for the total year. And so far, we've been able to get some healthy sell-in. And so overall, that's kind of the number we're working towards. As I explained, the Middle East remains a pretty volatile region and half of Kibali is pretty much going to be in the Middle East.
So while we currently have about $90 million in our forecast, we're probably in our guidance, assuming a slightly smaller number than that. So right now, if you look at our building blocks of the 10%, we're looking at about kind of 4% to 5% coming from the base, the base business and then the balance coming from the new licenses. And we understand that that's a little conservative right now. We do expect the market to be more around high mid-single digits, call it around 6%. But again, we are being prudent at this point in time.
Korinne Wolfmeyer
Very helpful. Thank you. And then can you just touch on kind of your longer-term expectations for A&P spend and I know you're not guiding beyond 2024, but how should we be thinking about proper run rate for operating margin beyond this year if you are keeping our A&P spend heightened and specifically like is it reasonable to think we could get to levels delivered here in 2023 over the coming years? Or is it (technical difficulty)
Michel Atwood
(technical difficulty) we have, I don't think we're necessarily looking to further expand. I think we've had a really, really good run. We're comfortable at the level we have. I think as the business growth continues to grow. We'll continue to have operating efficiencies and scale gains. I think that would potentially drive a little bit of margin appreciation, but we are being very vigilant. And again, as I was explaining before we have a lot of them.
Yes, there's some mix impacts, segment mix impacts that can kind of go through some of these things off. If you look at our A&P, right now we're at 19.7%. But if you look at our European operations we are at 22%, and the reason why we're lower than that is because US operations is more in the [15% to 16%] range and it's the same thing on COGS. So I think what you can probably expect to see really over the long term is for US operations, gross margins will probably continue to improve. A&P will continue to increase and that overall margins will remain roughly the same.
Korinne Wolfmeyer
Great. Thank you.
Jean Madar
Excuse me, I would like to if we have time, I would like to go back to this interesting point of LabCorp and Covance, which are the two new licensor that just started. We took them over January run. And I think we're going to see some good surprises on both because the former licensee don't put a lot of inventory in the market and days from the orders which we are receiving in the first quarter.
We see that there is a large appetite for her that cost existing product and also for our buck already from the troops that NattyMac, we see empty shelves and we have to we can the shelf very quickly. So it varies if it continues at the level that we are seeing now, we have a lot of chance to make the bigger numbers for Cavali for this year.
Operator
Ashley Helgans, Jefferies.
Hi, this is Sydney (technical difficulty) on for Ashley. I was just wondering if you can talk a little bit about what you're seeing in terms of consumer price sensitivity and maybe it's also sensitivity to promotion, then any kind of color you can give in terms of what you're expecting for the broader fragrance category, promotional environment looking through to 2024?
Jean Madar
I can try to answer. But as I said before, today, we have seen a premiumization in the market. For sure there are more and more consumer willing to spend more for higher quality segments when they say higher quality, meaning more concentrated segments. So instead of the bank in order to allow the rebate or the buffer, so it could be more expensive.
We see low milk price resistance. When it comes to the fragrance, we see also the worldwide more people buying larger size, which which is also a sign on our fragrance them usually three sizes and it's going to small, medium and large, more than [60%] of the sales are in the larger size.
So this, of course, helps a business. It has not always been like that. And so and we see this trend to continue. We see it in brick and mortar business. And of course, in the very important to e-commerce business. Michel, you have something to add?
Michel Atwood
Yeah, no, I think I would say the market has been generally very strong. And so even if there is if there were to be any price elasticity related to pricing. We're certainly not seeing orders are very strong, underlining trend that's kind of pushing the market up that would be offsetting that. And on the promotion side, we're not really seeing any significant increases in promotional levels. You know, typically holiday when you get your normal gift sets, there are some various events throughout the holiday season to facilitate itself, but we haven't really seen any significant increases in promotional activity there.
Got it. That's helpful. And then just one more from us was any updates you can kind of give us on the travel retail channel and what you're seeing there.
Jean Madar
Travel retail is really back and we have all the operators, the largest operators and there is less and less it doesn't have them going back strong with a lot of programs at the higher price and the new UP in the US and in in Asia, except China, except China, we will see a nice increase, you know, well, the travel retail.
Thank you so much.
Operator
Hamed Khorsand, BWS Financial.
Hamed Khorsand
Yes, good morning or good afternoon. So first thing I was asking though, are you seeing any difference in your relationship with the retailers and what's going on with the go and direct, how beneficial that is for you? But are they buying more because you having established relationship? How is it different?
Jean Madar
I am not sure. Michel?
Michel Atwood
So let me try to take that and then Jean you can maybe fill in. I mean, obviously, there's always a benefit in going direct because if you go direct, you can you can obviously pick up a piece of the pie of the overall value that that is that is out there, if you can do it obviously efficiently.
The second benefit that you get is effectively you're closer to the business. You're closer to the pulse of the business. You don't when you're selling through a distributor, you know, you don't necessarily have as much visibility on what the retailers are doing. Obviously you have ongoing conversations with your distributors, your stock, your truck stock and trade, you track their stock levels, you look at offtake.
But when you're one step closer to that consumer to that retailer, it definitely helps on the relationship. You're also the one talking about your brands. And obviously, we always know how to talk about our brands, even if partners are also very well trained, we definitely are one step closer as well. So I think all of that just creates positive momentum and that inevitably now kind of helps us.
Jean Madar
We have a direct relationship with retailers in countries and the of course, we can respond much more faster than when you have a distributor in them for sure.
Hamed Khorsand
Okay. And then have you changed up any of your timeline for new releases this year? Are you staying foot?
Michel Atwood
Yeah, I think there's some you know, if you really look at this business overall, typically what you see is some from a seasonality standpoint. I mean, a lot of you know, if you look at a stable FMCG business, you know, it's pretty much everybody's buying every quarter, roughly a quarter a quarter a quarter. What you see on the fragrance business, it's much more skewed to the second half of the year. And if you look at what we did this year.
This year, we are roughly 47% of our business was in the first half and 53% was in the second half. Normally it's more like a [46-54] split. And this year was a bit of an outlier because we had a very, very strong Q1 last year with a lot of innovation, particularly on mobile on ND. So this is one of the reasons why we're guiding to a slightly slower growth relative to last year. It's more driven by seasonality of this market in this industry, which was a little bit off last year versus what we normally say.
Hamed Khorsand
Okay. Thank you.
Operator
Thank you. And there are no further questions at this time, I'll turn the floor back over to Michel Atwood for closing remarks.
Michel Atwood
Okay. Well, thank you all for joining our call today. Really before I end the call, I wanted to take this opportunity to really thank our teams have been really the unsung heroes here. They're not on this call, but they're all behind us for those that have been following us for a while. I think you've all seen the pace of growth and transformation over the last few years, it's been really considerable and we could not have achieved this It not only achieved and sustain these record results with all of their hard work and dedication.
So really, again, wanted to really thank our teams today to all of you and last thing I would like to do is just also maybe announce some upcoming events. So first, Jean and I will be joining a D.A. Davidson's inaugural best of breed by some virtual conferences on March 8. And separately, Jean will also be attending the Raymond James leaders dinner in London on March 19. So please reach out to the respective sales representatives if you're interested in protecting in these events.
Obviously, if you have any additional questions, you can contact Karin Daly from The Equity Group, our Investor Relations representative. Our telephone number and email address can be found in our most recent earnings release. And obviously, I'm always available as well to answer any questions for you. Look forward to the next conference call and everybody wanted to thank you again and wish you all a great day.
Operator
Thank you. And that concludes today's conference. All parties may disconnect. Have a good day.
