'Significant Groundwork' Undertaken To Turn Around Spain's DIA, Says CEO
The chief executive of troubled Spanish retailer DIA has said that "significant and crucial groundwork" has been undertaken in the process of turning around the business' fortunes.
Karl-Heinz Holland was commenting after DIA posted net sales of €6.87 billion for full year 2019, which was down 9.3% on the previous year.
“To fully recognise the company's situation is the first step to changing it," Holland said.
"We have started 2020 with significant and crucial groundwork done. Going forward, we are determined to build our own success story which will be based on a modern proximity offer, an attractive value proposition, freshness, operational excellence, a win-win franchise model and an outstanding own brand offer."
In its results statement, DIA said that throughout 2019, it has been operating in a 'highly disrupted and volatile business, financial and corporate context', which in turn has affected its performance.
Across The Group
Like-for-like sales at the business were down 7.6%, driven by a 0.7% decline in traffic and a 7.0% decline in average basket.
Adjusted EBITDA for the year was €34.1 million, compared to €376 million the previous year, while net financial debt was reduced to €1.32 billion (down €133.8 million).
In its core Spanish business, which accounts for three-fifths of sales, net sales were down 8.2%, while adjusted EBITDA dropped by 84.7%. In Portugal, net sales were 7.9% lower, with adjusted EBITDA dropping by 65.1%.
Argentina saw net sales down 5.5% (or +47.2% on an ex-FX basis), while Brazil was down 16.1% (-14.1% on an ex-FX basis).
In a statement, DIA said that some 87 new management professionals have joined the business across the four markets in which it operates, to increase the level of expertise and capabilities at a local level.
"DIA’s journey is today powered by very talented people with a unique local focus," said Holland. "We are fully committed to work on our transformation pillars to create the best customer experience.
"Our efforts have encompassed not only improvement and optimisation across all critical areas but, equally important, extending best practices throughout the group coupled with comprehensive financial controls. DIA’s transformation process gathers strength every day."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.