Sligro's Decision To Offload EMTÉ Receives Cool Response From Analysts

By Steve Wynne-Jones
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Sligro's Decision To Offload EMTÉ Receives Cool Response From Analysts

It was one of the most-discussed topics in Dutch retail, which, after many months of rumours, has finally been confirmed. However, one retail analyst has labelled the news something of an "anticlimax".

Announcing its full year 2017 results, Dutch wholesaler Sligro Food Group has confirmed that it is formally beginning the process of offloading its EMTÉ retail business, which holds around 2.5% of the total Netherlands grocery retail market.

"During the second quarter of 2017, we evaluated the EMTÉ format and considered our future in Food Retail," chief executive Koen Slippens explained in the statement.

"In the second half of the year, we looked right across the market for the strategic alternative that would create the greatest value. The decision, based on our findings, was to start a formal process for bringing about a partnership or sale."

Slippens added that the disposal process is expected to lead to a transaction taking place some time this year, indicating, it would seem, that the group intends to move quite quickly.



Given that rumours about Sligro's disposal of EMTÉ have been brewing for some time, analysts were 'so-so' about the news, with an ING analyst labelling the announcement an "anticlimax", according to De Telegraaf.

Elsewhere, KBC Securities said it was 'disappointed' due to the lack of concrete news about what the business plans to to with EMTÉ, adding that the fact that a sale is confirmed for this year is nonetheless a positive value adding measure for the business.

John David Roeg of NIBC Bank added that "the potential sale or partnership for EMTE remains an important catalyst for [Sligro's] share performance in 2018."

Portfolio Change

Sligro's food retail activities comprise some 130 EMTÉ supermarkets, of which 34 are operated by independent retailers. Net sales in this division accounted for €828 million last year, compared to a total of €2.1 billion across the entire group.


The stores benefit from Sligro's in-house production facilities and vertically integrated supply chain, as well as the purchasing benefits of the group's alliance with CIV Superunie.

But while Sligro's foodservice division has seen a 7.9% increase in net sales in the past year, EMTÉ has posted just 0.2% growth, on the back of a 1.4% decline last year.

Wait And See?

In foodservice, Sligro "outperformed the market [...] in terms of organic growth and this underlines the strength of our formats. In the Netherlands and Belgium, we worked hard on integrating existing and newly-acquired operations and the related organisational and technical conditions."

Given the positive performance of its wholesale business, which was boosted by a recent agreement with Heineken, which will see the wholesaler carry out the beer manufacturer’s logistics operations for the Dutch hospitality sector, Sligro can afford to sit on its hands regarding EMTÉ, at least in the short term.


But with Slippens' mantra for 2017, 'Keep Building the Future', ringing in the ears, the group will no doubt seek to finally 'deal' with EMTÉ before the half year rolls around.

Last September, NIBC Bank outlined a couple of scenarios for EMTÉ, identifying Sperwer, home to the Plus banner, as an 'ideal buyer' for the chain, noting that Sligro has a previous relationship with the group - it sold convenience stores to Sperwer’s Spar banner in 2007 in return for a 45% stake in Spar.

Detailresult and Coop were named as other potential suitors, however Jumbo should be considered an 'outsider', NIBC suggested.

Let the acquisition games begin...

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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