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Retail

Spain’s Dia Reports ‘Strong’ Performance In FY 2023 With Profitability Growth

By Branislav Pekic
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Spain’s Dia Reports ‘Strong’ Performance In FY 2023 With Profitability Growth

Spanish grocery retailer Dia’s proximity strategy proved successful in its 2023 financial year, with the retailer generating ‘strong results’, despite a challenging economic climate.

Sales reached €6.76 billion, with like-for-like sales growth of 3.3% driven by a strong performance in Spain. However, overall net sales decreased by 7.2%, due to currency fluctuations in Argentina, the company noted.

Adjusted EBITDA reached €216 million (+7.8%), while net profit improved by €94 million, bringing Dia’s losses down to €30 million.

Both Spain (€122 million) and Argentina (€6 million) achieved positive net profits, demonstrating the effectiveness of Dia’s strategy in diverse markets, the group said.

The company made significant progress in reducing debt, achieving a leverage ratio of 1.96x (down from 2.71x in 2022).

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‘Strategic Priorities’

Chief executive Martín Tolcachir stated, “We fulfilled strategic priorities, simplified our portfolio, and set the stage for future growth under our single banner.”

Highlighting the progress in deleveraging, Guillaume Gras, Dia’s financial director, added, “The solid performance and debt reduction allow us to look confidently at the upcoming refinancing process.”

Strengthened Presence

Grupo Dia ended 2023 with 3,956 stores across Spain, Argentina and Brazil, in addition to 994 Clarel beauty stores in Spain and 458 Minipreço stores in Portugal, the sale of which is pending in the first half of 2024.

Around 62% of stores in Dia’s core markets (Spain, Argentina and Brazil) are franchised, with the franchisee network accounting for 45% of net sales (up by 6.4% since 2022).

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In Spain, 86% of the group’s 2,318 stores are operating under the new model, thanks to the opening of 36 stores and the remodelling of 289 outlets in 2023.

Dia’s e-commerce services served 84% of the Spanish population, with digital customers growing by 29% and online sales now accounting for 3.5% of total net sales (up by 0.5%).

In Argentina, the retailer opened 76 stores and remodelled 234 outlets, raising the percentage of the network that operates under the new model to 82%.

However, an exchange rate devaluation impacted net sales, which fell by 30.6%, to €946 million. Digital customers in Argentina have grown by 24%, with 80% coverage nationwide.

Private labels accounted for 54% of the shopping basket in Spain (up from 52.6% in 2022) and 29% in Argentina.

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