Eurocash posted PLN 38.34m consolidated net profit attributable to shareholders of the parent company in Q2 2023, compared to PLN 15.1m profit a year earlier, the company said. Total consolidated net profit amounted to PLN 50.73m vs. PLN 19.19m loss a year earlier.
Operating profit was PLN 112.14m vs. PLN 104.48m profit a year earlier. EBITDA profit reached PLN 268.9 million against PLN 256.3 million profit a year earlier.
Consolidated sales revenue reached PLN 8,378.84 million in Q2 2023 against PLN 7,838.76 million a year earlier.
“The strategy laid out for 2023-2025 is delivering the expected results. The past quarter was the seventh in a row in which Eurocash Group recorded an increase in sales and EBITDA, while building operating cash flow and strongly increasing net profit. In the second quarter of this year, Eurocash Group’s net profit reached nearly PLN 51 million, over two times more than in the same period of 2022, when it amounted to PLN 19 million,” said Eurocash Group CEO Paweł Surówka commented.
As the CEO pointed out, amid weakening consumer demand and a decline in retail sales in Poland, Eurocash Group’s total sales in the second quarter of this year increased by 7% year-on-year.
“Thanks to cost discipline, we also recorded an increase in EBITDA of nearly 5% y/y, despite the accumulation of cost increases in recent months, related, among others, to increases in energy prices, rents or minimum wages,” the CEO added.
In the wholesale segment, total sales realised by Eurocash Group in Q2 2023 exceeded PLN 6.1 billion and were 8% higher y/y.
“Strong growth was recorded in the Eurocash Serwis format (+19% y/y) with stable sales in the Eurocash Distribution (+1% y/y) and Eurocash Cash&Carry (-1% y/y) formats. When comparing the revenue dynamics, it is important to take into account the high base from the same period last year, related, among others, to purchases made by and for Ukrainian refugees, the later date of Easter in 2022, as well as the warmer April and May last year, which translated into increased purchases in local shops, the company announced.
In an environment of rising costs (still high inflation and wage pressure related to the double increase of the minimum wage in 2023), EBITDA of the wholesale segment in the second quarter of this year increased by 6% y-o-y to PLN 216 million, it further reported.
The company notes that the decline in retail sales in food categories recorded in recent months translates into a slowdown in Eurocash Group’s sales growth in the Retail segment. In the second quarter of this year, sales of this segment slightly exceeded PLN 2 billion and were 3% higher y-o-y. In contrast, like-for-like sales (for the same number of outlets) of the Delikatesy Centrum chain increased by 4.6%.
Eurocash Group’s response to high price sensitivity and consumers’ search for savings are intensified promotional activities, introduced in close cooperation with franchisees. The result is a gradual improvement of Delikatesy Centrum’s price positioning vis-à-vis competing chains. Thanks to simultaneous efficiency-improving initiatives, the EBITDA of the retail segment in the second quarter of this year increased by 7% y-o-y to PLN 95 million, which translated into an increase in the EBITDA margin to 4.8% (from 4.6% a year ago), the company further announced.
Sales of the Projects segment in the second quarter of 2023 amounted to PLN 222 million, up 23% year-on-year. This is largely due to the opening of more outlets of the Big Ben liquor store chain and growing consumer interest in shopping at Frisco, it was also stated.
The Duży Ben chain had 371 shops at the end of June this year (compared to 305 at the end of 2022 and 249 in the middle of last year), and the chain’s total sales in Q2 this year amounted to PLN 98 million, up 43% y/y. LFL sales (for the same number of outlets), meanwhile, increased by more than 9% y/y.
Frisco’s sales in Q2 this year, meanwhile, amounted to PLN 105 million (+14% y-o-y), driven by an increase in the average value of a shopping basket to PLN 331 (+10% y-o-y) and an increase in the number of active Frisco customers to 91,000 (+5% y-o-y), it also mentioned.
At the end of June 2023, the total number of franchised, partner and own shops clustered in networks organised by Eurocash Group amounted to 15,607 outlets, 103 more than at the end of 2022. In its strategy for 2023-2025, Eurocash Group aims to attract an average of around 500 shops per year to its partner and franchise networks.
At the end of the second quarter of 2023, more than 4,600 shops were already integrated within EuroPlatform, which connects retailers with network organisers, manufacturers and consumers. This represents a 45% increase in integrated outlets compared to the end of June 2022.
In H1 2023, the company posted a consolidated net loss attributable to equity holders of the parent of PLN 13.31m compared to a loss of PLN 36.6m a year earlier, on sales revenue of PLN 15967.24m compared to PLN 14366.66m a year earlier. Total consolidated net profit amounted to PLN 1.05 million against a loss of PLN 31.14 million a year earlier.
EBITDA profit in H1 this year reached PLN 434.4m compared to PLN 407.3m profit in this figure a year earlier.
In the entire H1 of this year, Eurocash Group’s total revenues amounted to almost PLN 16bn, 11% higher than in the corresponding period of 2022, while consolidated EBITDA increased by nearly 7% y-o-y to PLN 434m. The Group also managed to fully recover the net loss from the first quarter (which is traditionally the weakest quarter of the year in FMCG trading) and ended the first half of 2023 with a positive net result of PLN 1 million compared to a net loss of PLN 31 million in the first half of 2022. Operating cash flow also increased significantly – by PLN 149 million – during the period, the company further stated.
On a standalone basis, net profit in H1 2023 was PLN 105.44m, compared to PLN 98.85m profit a year earlier.
Eurocash Group is the largest Polish wholesale distributor of FMCG products, the organiser of well-known franchise, agency and partner chains, such as ABC, Delikatesy Centrum, Groszek, Gama, Duży Ben, Lewiatan or Euro Sklep, the logistics and technology partner of local shops, and the owner of the No.1 e-grocery shop in Poland: Frisco.pl. The company has been listed on the WSE since 2005; it is a member of the mWIG40 and WIG30 indices.
Source: Eurocash and ISBnews
