Eurocash Group Sees Sales Up 2% In First Half
Poland's Eurocash Group has reported a 2% year-on-year growth in sales, to PLN 12.36 billion (€2.70 billion), in the first half of its financial year.
Consolidated EBITDA for the period amounted to PLN 202.6 million (€44.3 million), down from PLN 336.6 million a year ago.
The company's wholesale segment saw a 5.1% growth in EBITDA to PLN 288.2 million (€63 million), while sales increased by 0.3% year-on-year to PLN 9.04 billion. This growth was driven by progressive digitisation, including growing sales via the eurocash.pl platform.
At the end of the first half of 2021, the ABC network comprised 9,234 stores, 270 more than in the previous year.
The number of partner and franchise stores associated in the Lewiatan, Euro Sklep, Groszek and Gama (PSD) chains totalled 5,449 outlets, which is 282 stores more compared to the same period last year.
In April, the company announced plans to implement new store management system across 4,000 stores by the end of the year.
'Decline In Sales'
Jacek Owczarek, member of the board and financial director of Eurocash Group, said, "Sales of food in small and medium-sized stores, which include independent retailers, which are the main group of Eurocash Group customers, fell by 1.2% in the first half of this year compared to the first half of last year.
"We experienced the strongest decline in sales in Cash & Carry wholesalers, mainly due to the much lower demand for alcohol year on year. On the other hand, we recorded good sales results in the Eurocash Dystrybucja format, and in the second quarter, we also saw a clear rebound in the Eurocash Gastronomia format, due to the opening of restaurants, closed a year ago due to the pandemic. The Eurocash Serwis format, responsible for the distribution of tobacco products and impulse products, also continued a strong increase in sales."
In the retail segment, external sales exceeded PLN 3.0 billion in the first half to register a 1.5% growth compared to last year.
The segment's EBITDA declined by PLN 5.4 million compared with a gain of PLN 81.7 million a year earlier.
Owczarek explained, "The results of the second quarter and the entire half of this year were burdened with a write-off of PLN 80 million, which we decided to create in connection with the planned closure of 59 own stores operated in the Delikatesy Centrum chain.
"These are the units that performed the worst in the market and where the corrective actions taken did not promise a lasting improvement in results. Our goal is to build the largest chain of small supermarkets in Poland based on profitable and prospering retail outlets. In terms of efficiency, other own stores are also inferior to establishments run by franchisees. Therefore, we will strive to keep them up, which should translate into an improvement in the profitability of the retail segment, starting from next year."
The retail group's Inmedio banner, which operates around 428 outlets, saw sales up 23.3% to PLN 225.8 million.
The company's projects segment reported sales of PLN 247 million in the first half, almost three times higher than in the corresponding period of 2020, driven by the full consolidation of Frisco.
In the first half of this year, Frisco generated sales worth PLN 137.6 million, of which PLN 10.9 million was outside Warsaw.
The expansion of the Duży Ben alcohol store chain also contributed to the sales growth in the division.