06 August 2020

DIA announces positive topline and adjusted EBITDA performance in 2Q20 on the back of effective response to COVID-19 crisis and initial results of business transformation initiatives, sustained post lockdown

  • Positive topline and adjusted EBITDA performance in 2Q20 on the back of effective response to COVID-19 crisis and initial results of business transformation initiatives, sustained post lockdown
  • Strengthened financials in 1H20 with improving trade working capital, positive cash flow generation and reduced net debt
  • Empowered country leadership delivering on strategic roadmap in 1H20 - accelerated rollout of online offer in all markets, launch of new private label products and improved assortment

MADRID, August 6th 2020: DIA Group, (“DIA” or “The Group”) an international food retailer that operates in Spain, Portugal, Brazil and Argentina, today issued its second quarter and first half 2020 financial results. 2Q20

FINANCIAL HIGHLIGHTS (all figures in €)

  • Net Sales: 1,819m (2Q19: 1,711m), up 6.3% despite smaller store network and Brazilian and Argentinean currency effects, thanks to positive effect of transformation initiatives and COVID-19 lockdown related consumer behaviors.
  • Like-for-Like: up 14.9% with all markets positive for first time since 4Q16, driven by increased average basket size which more than offset decreased number of tickets.
  • Gross Profit: 403m (2Q19: 303m) up 4.4% as percentage of net sales on increased volumes and early positive results of the operational excellence program activated in 2H19.
  • Labor Costs: 191m up marginally as the impact of 2019 workforce rationalization measures were offset by COVID-19 related staffing requirements and bonus payments.
  • Operating Expenses: down 1.4% as a percentage of net sales on the back of cost reduction measures and lower investment in advertising during COVID-19 lockdown.
  • Adjusted EBITDA: 60m (2Q19: -67m), driven by increased sales volume and improved gross margin supported by continued cost discipline.
  • Net Profit: -45m (2Q19: -267m) with improved interest expenses impacted by 16m negative currency effect.
  • Available Liquidity stable at 435m (1Q20:425m) with enhanced debt maturity profile following 2019 refinancing agreement.
  • Net Financial Debt: reduced at 1,253 million. 1H20

FINANCIAL HIGHLIGHTS

[€ million] 1H20 1H19 Change (%)
Like-for-like sales growth (%) 8.7% -7.9% -
Net Sales 3,515.2 3,444.6 2.1%
Gross Profit

716.1

672.6 13.2%

Adjusted EBITDA

59.7 (55.6) n/a
EBIT (52.0) (321.7) 83.8%
Net attribute profit (187.7) (418.7) 55.2%

 

[€ million] 1H20 FY19 Change (m)
Trade Working Capital (negative) 645.0 608.0 37.0
Net Financial Debt 1,253.3 1,322.2 (68.9)

 

H1 2020 TRANSFORMATION ROADMAP UPDATE

  • Optimized assortment: Rolled out to approximately 500 stores in Spain during 1H20 with a priority focus on DIA’s fresh fruit and vegetable offer.
  • Private Label: New product development and rollout initiated in Spain and Brazil as part of new offer combining quality, value-for-money and more attractive packaging.
  • Online & Express Delivery: Now launched in all four countries after accelerated roll out to meet customer demand during and post COVID-19 lockdown period and as long-term customer purchasing trends.
  • Franchise: Improved incentive-driven and customer centric franchise model rolled out to 470 locations in Spain ahead of launch of tailored offer in other markets.
  • Operations: Continued focus on cost efficiencies and reduced complexity in supplier relations, inventory, logistics and procurement management; initiation of new logistics plans in Spain and Brazil and renegotiation of rents across all markets.

Commenting on the results, Stephan DuCharme, Chairman, said:
“Our second quarter financial performance demonstrated the positive impact of both our response to the COVID-19 situation and our ongoing business transformation. Customers are responding to our attractive proximity offer and emerging online capabilities, and the maintenance of positive Like-for-Like performance in June and July post-lockdown is a good indicator of progress.

We have controlled costs in the face of increased industry-wide expenditure in terms of protective measures and staffing thanks to the major efficiency efforts carried out in 2019, while key financial metrics such as improving trade working capital and positive free cash flow are tracking in the right direction.

Looking ahead, we will continue to deliver on transformation roadmap initiatives in the second half, focused on the key pillars of our improved commercial value proposition and franchise model, underpinned by continued operational efficiencies.”

INVESTOR PRESENTATION DETAILS FOR PARTICIPANTS

Date: August 6th, 2020 at 10:00 a.m. CEST

Webcast link:
English: https://edge.media-server.com/mmc/p/mi6ggy6b
Spanish: https://edge.media-server.com/mmc/p/mi6ggy6b/lan/es

English conference ID: 7182356
Spanish conference ID: 4683759

Spain: +34 914146280
UK: +44 (0) 2071 928000
Brazil: 2140421335
USA: 16315107495

 

MEDIA
Lara Vadillo / Rebeca Matilla / Leyla Gallego
Phone: +34 619.22.65.87 / 609.41.57.21 / 616.02.51.89
Email: comunicacion@diagroup.com

INVESTOR RELATIONS
Miren Sotomayor / Natalia Amo
Email: investor.relations@diagroup.com

News Index