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2020 was a year of significant disruption and change resulting from COVID-19.

The pandemic accelerated many structural changes already underway, stimulated and challenged by consumer trends, technological disruption, and the increased relevance of sustainability to retail strategies.

L1 Retail is a differentiated investor with a longer-term investment horizon than many other financial investors. It seeks to deploy capital into platforms that can be positioned for strong sustainable growth over ten years and beyond.

L1 Retail owns Holland & Barrett, which
provides attractive exposure to the growing health and wellness market. It also owns 74.8% of Distribuidora Internacional de Alimentación SA (DIA), the Spanish food retailer.

As essential retailers, both portfolio companies responded swiftly and decisively to serve their customers safely during the pandemic.

Holland & Barrett

Holland & Barrett is Europe’s leading health and wellness retailer with over 1,000 stores across the UK, Ireland, Netherlands, and Belgium.

Holland & Barrett experienced significant change in the year, with disruption in its retail business being offset by exceptional growth in its digital business. In each of its core markets, Holland & Barrett was categorised as an essential retailer during COVID-19 and has played an important role in serving customers and local communities, providing advice and products to support immunity, healthy and specialist food, and broader nutritional and wellness supplements.

Undoubtedly, COVID-19 has increased customer awareness and interest in immunity and wellness, and Holland & Barrett is well positioned to serve these growing needs. In 2020, Holland & Barrett achieved its 11th consecutive year of like-for-like growth, ahead of the overall retail market, despite the challenging overall retail environment impacted by COVID-19 and the uncertainty of Brexit. While the lockdown did impact the footfall on the high street, it was offset by strong digital performance. Health and wellness, including immunity, can be expected to play an even more important role in people’s lives in the future.

The group’s revenue for the year ended 30 September 2020 increased by 1.7% (2019: 2.6%) to £727m (2019: £715m). Gross profit rose to £446m in 2020 compared to £422m in 2019. Sales performance reflects a decline in retail footfall, offset by strong growth in the online channel driven by the COVID-19 impact on customer behaviour. Distribution and operating costs of £280m (2019: £304m) represent a cost to sales ratio of 38.5% (2019: 42.5%) driven by cost efficiencies as well as the change in channel mix to digital sales. Holland & Barrett reported a profit before tax of £29m (2019: loss before tax of £26m).

L1 has a clear long-term vision and growth ambition for the company to become a trusted partner to over 100 million customers in health and wellness. Achieving this ambition will be driven by digital transformation of all aspects of the current business to become a leading omnichannel retailer, as well as developing new technology products to move Holland & Barrett beyond retail to support many more customers’ wellness journeys by combining products and services into personalised solutions.


DIA is a Spanish multinational company specialising in the distribution of food, household, and personal care products. It is a leading proximity food retailer network with over 6,000 owned and franchised stores in Spain, Portugal, Brazil, and Argentina.

Despite the impact of COVID-19, DIA delivered stable top line performance, with like for-like improvement showing early positive results of its business transformation plan, with fewer stores and adverse currency effects. Throughout each quarter in 2020, DIA achieved positive group like-for-like growth, reaching 7.6% for the full year covering both pre-COVID-19 and post lockdown periods. The lockdown period, which affected each of its markets in different ways, was clearly a contributor to group like-for-like as restaurants, schools, and offices were shut and people prepared meals at home. 2020 saw the Brazilian real depreciate by 24.1%, while the Argentinian peso depreciated by 33.7%.

This performance was supported by continued cost discipline and underpinned by a strengthened financial structure with positive cash flow, lower net debt with an enhanced maturity profile, and improved working capital. EBITDA was up strongly to €302m thanks to improved gross profit, and DIA continued cost discipline as well as a decrease in restructuring costs. DIA recorded positive Adjusted EBITDA up to 1.8% of net sales driven by increased gross profit and continued cost discipline.

Find out more at: www.letterone.com/our-businesses/l1-Retail/