Portuguese retail group Jerónimo Martins invested just under half (49%) of its total capital expenditure last year in its Polish operation, Biedronka.
Of the €724 million the retail group invested in its operations, the next highest beneficiary in percentage terms was Ara, its nascent operation in Colombia, which accounted for 23% of capital expenditure.
Some 14% was allocated to Pingo Doce, while 4% was allocated to Recheio, its Portuguese supermarket and wholesale operations respectively.
Expansion Investment
Of the €724 million worth of investment, expansion accounted for 51% of spend, while refurbishments accounted for 35%, and 14% was allocated to ‘other’.
The retailer revealed its investment spend alongside its full year results, which indicated that Jerónimo Martins saw a 9.4% increase in sales last year (excluding foreign exchange impact) to €16.27 billion, or 11.3% higher if foreign exchange impact is included.
EBITDA was up 4.7% (excluding foreign exchange impact) to €922 million.
‘2017 was a year of growth in the Group. Our consolidated sales reached 16.3 billion euros, 11.3% higher than the previous year,’ the company said in a statement.
‘The net result presented a year-on-year growth of 6.7%, on a comparable basis, to 385 million euros. In the same period, we invested 724 million euros, 51% of which were allocated to expansion (new stores and distribution centres).’
Contribution To Sales
Biedronka accounts for more than two thirds of the company’s sales; around 68%, according to the retailer.
Pingo Doce accounts for 22.5% of sales, while Recheio accounts for 5.8% and Ara accounts for 2.5%.
Hebe, its chain of specialised health and beauty outlets, accounts for 1% of sales, according to the retailer.
Biedronka’s contribution to EBITDA is even more pronounced, at 87%, compared to 20% for Pingo Doce and 5% for Recheio. Other parts of the group’s porfolio, including adjustment, have a negative effect of 13% on the group’s EBTIDA.
2018 Priorities
For the coming year, Jerónimo Martins said that growth will continue to be the group’s ‘strategic priority’, with an estimated 70 new Biedronka stores to open in Poland, and some 150 new Ara outlets in Colombia.
‘We will sustain the high levels of investment in our businesses (€700-750) to continue to bolster the market position of our banners and create conditions for continued profitable and sustained growth,’ it said.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
