Sligro Food Group N.v. · EURONEXT:SLIGR
Sligro Food — H1 2022 Earnings Presentation
38 slides from Sligro Food's earnings presentation, Jul 21, 2022
Slide 1: 2022 half-year figures
2022 half-year figures 21 July 2022
Slide 2: Agenda
Agenda • Welcome Koen Slippens • 2022 half-year figures Rob van der Sluijs • Developments in the Netherlands Koen Slippens • Developments in Belgium Koen Slippens • Developments in the Group Koen Slippens • Outlook Koen Slippens 2
Slide 3: Abridged statement of profit or loss: Revenue
Abridged statement of profit or loss 1 Revenue • Strong improvement due to lifting of COVID-19 containment measures over the course of Q1. • Revenue in all segments above pre-COVID level, excluding catering and healthcare. • Inflation approx. 7%. • Cash-and-carry/delivery service ratio changed to 38
Slide 4: COVID-19 impact on revenue in the Netherlands
COVID-19 impact on revenue in the Netherlands 1 Cash-and-carry sites in the Netherlands Weekly development in revenue (x € million) 2022 2021 2019 Delivery service sites in the Netherlands Weekly development in revenue (x € million) 2022 2021 2019 4
Slide 5: COVID-19 impact on revenue in Belgium
COVID-19 impact on revenue in Belgium 1 Cash-and-carry & delivery service sites in Belgium Weekly development in revenue (x € million) 2022 2021 2019 5
Slide 6: Gross profit
Gross profit 1 • Higher gross profit margin due to: - decrease in tobacco product revenue; - transfer of operating responsibility for Smeding; - recovery of Heineken’s service revenue; - better inventory control; - better procurement conditions and promo effectiveness. • Passing on price increases i
Slide 7: Other operating income
Other operating income 1 • 2022: €16 million one-off untaxed book profit on sale of stake in Smeding. • 2021: taxed book profit in property, plant and equipment of almost €4 million thanks to sale of former Van Hoeckel site in ‘s-Hertogenbosch. 7
Slide 8: Operating costs
Operating costs 1 Employee expenses: • Increase due to higher activity level. • Use of the NOW wage subsidy scheme2 and TWO wage subsidy scheme3 for an amount of €30 million in 2021 (2022: nil). Selling costs: • In 2021, release from provision for doubtful debts, increased income from modified custo
Slide 9: Depreciation, amortisation and impairment
Depreciation, amortisation and impairment 1 • Lower depreciation on fixed operating assets due to limited investments in recent years. • Higher amortisation of software as a result of further development of Hybris webshop and the introduction of Stibo item master data. 9
Slide 10: Financial income and expenses and income tax
Financial income and expenses and income tax 1 • Interest expenses are slightly lower due to reduced debt position and an improved net interest-bearing debt/EBITDA ratio. • Bilateral consultations on transfer pricing are ongoing between the Dutch and Belgian tax authorities, for now recognised as in
Slide 11: Abridged statement of cash flows
Abridged statement of cash flows 1 • Lower cash flow from operations due to change in operating capital: - Higher inventory level to handle supply chain disruptions more effectively and thereby continue to serve our customers. • Investments back to ‘normal level’: - Store conversions. - IT & data in
Slide 12: Segment figures
Segment figures! Sligro Food Group NV. Netherlands Belgium Group x€million H1-2022 -H1-2021 11-2022. H1-2021.-H1-2022.——-H1-2021 Revenue 1,026 719 103 69 1,129 788 Gross profit as % of revenue 27.3 23.9 23.5 25.3 26.9 24.0 Gross operating result (EBITDA) 67 38 (2) (3) 6 35 Operating result before am
Slide 13: Financing
Financing 1 • Improved results meant that we remained well within the financing covenants at the end of June: Net interest-bearing debts/EBITDA = 1.2. • Early voluntary repayment of long-term credit facilities amounting to €20 million. • In 2023, repayment obligations of €30 million, i.e. moved from
Slide 14: Net profit and earnings per share
Net profit and earnings per share 1 • Result has improved, dividend policy will be reinstated. • Excluding book profits, net profit improved from a loss of €7 million to a profit of €7 million. • Based on the H1 result and dividend policy: interim dividend of €0.30 per share in October. 14
Slide 15: EBIT 2022 vs 2019 (1/2)
EBIT 2022 vs 2019 (1/2) 1 • Revenue: - H1-2019 was still excluding De Kweker (approx. €55 million). - Lower revenue from tobacco products. - Cash-and-carry share in H1-2019: 32%, in H1-2022: 38% - Inflation approx. 11%. • Gross profit margin: - Decrease in revenue from tobacco products: 0.6% - Trans
Slide 16: EBIT 2022 vs 2019 (2/2)
EBIT 2022 vs 2019 (2/2) 1 • Increase in employee expenses due to: - H1-2019: incidental income from release from reorganisation provision: €3 million/0.2% - Increase in wages and social security contributions: €5 million/0.4% - Increase in temporary staff for HAND €1 million/0.1% - Increase in recru
Slide 17: Developments in the Netherlands
Developments in the Netherlands
Slide 18: General economic developments in the Netherlands
General economic developments in the Netherlands • Consumer confidence dropped to a low point in the first half of the year, due to international developments. It seems to have stabilised in recent months. • Tightness in the labour market has led to a historically low unemployment rate with signific
Slide 19: Developments in the Netherlands (1/2)
Developments in the Netherlands (1/2) • In the first half of the year, we focused on the restart of our sales markets against the background of a globally disrupted supply chain: - The speed of the recovery caused significant turmoil in the international supply chain. - The effects of the war in Ukr
Slide 20: Developments in the Netherlands (2/2)
Developments in the Netherlands (2/2) • In the first half-year, operations and the challenges there were our priority. • The vision for long-term strategic initiatives remains unchanged, but implementation will start later and extend over a longer period: - We did spend time working out our ambition
Slide 21: Delivery service customer satisfaction
Delivery service customer satisfaction • Our focus lay on operating smoothly in a severely disrupted global supply chain. We were relatively successful at this considering the present circumstances. • The number of new customers increased as a result of the Heineken upsell and our relatively good pe
Slide 22: Cash-and-carry customer satisfaction (1/2)
Cash-and-carry customer satisfaction (1/2) • Cash-and-carry revenue continues to grow strongly and shows a 10% increase relative to our successful performance in 2021 (excluding tobacco products). • The results of the ‘Next Gen Cash-and-Carry’ programme are very promising. After several years of lit
Slide 23: Cash-and-carry customer satisfaction (2/2)
Cash-and-carry customer satisfaction (2/2) Network of sites • Accelerated conversion to 3.0: - Already completed in 2022: Remodelling and downsizing of Arnhem cash-and-carry store (Q1) ENTRÉE Brasserie changed to ENTRÉE (11 branches). - Current refurbishment projects and projects planned later i
Slide 24: Financial returns in the delivery segment (1/2)
Financial returns in the delivery segment (1/2) • The impact of the third lockdown in early 2022 was again mainly visible in the delivery service activity. • A powerful and extensive recovery of sales markets combined with the globally disrupted supply chain led to staff shortages, tightness in the
Slide 25: Financial returns in the delivery segment (2/2)
Financial returns in the delivery segment (2/2) Network of sites: • Already completed in 2022: - Newly constructed fresh produce distribution centre in Veghel (Q1) - Installation of solar panels on the new fresh produce distribution centre (Q2) - Installation of solar panels at the delivery service
Slide 26: Developments in Belgium
Developments in Belgium
Slide 27: General economic developments in Belgium
General economic developments in Belgium • Consumer confidence recovered visibly in the second quarter. • Registered unemployment is still above the pre-COVID-19 level. In practice, however, the labour market is still very tight. 27
Slide 28: Developments in Belgium
Developments in Belgium Developments • Substantial increase in both cash-and-carry and delivery service revenue: - The delivery service offer has led to an increase in Sligro-ISPC’s revenue: due to staff shortages in their own organisation, customers opt for delivery more often than a visit to the c
Slide 29: Developments in the Group
Developments in the Group
Slide 30: New ERP landscape
New ERP landscape • A dedicated team of colleagues and partners in the Netherlands and Belgium is working to build, test and prepare the new ERP landscape. • A robust and thoroughly tested system is already in place: - The interim upgrade to a new release went smoothly. - When building the new ERP l
Slide 31: People and organisation
People and organisation • We have improved our labour market positioning and communications to more effectively present Sligro Food Group as an attractive employer. • The operational recruitment process has been optimised in connection with the tight labour market. • A new onboarding toolbox is now
Slide 32: Corporate social responsibility (CSR)
Corporate social responsibility (CSR) • Sustainability/CSR is an integral part of the strategy in the period up to 2025. • Sligro Food Group is on par relative to competitors, but we will still intensify our focus on sustainability in the coming years due to: - Intrinsic motivation - Stakeholder pre
Slide 33: Outlook
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Slide 34: Outlook
Outlook Market conditions • Consumer confidence is at a low level, but there have been signs of stabilisation in recent months. Inflation remains high and this increasingly affects consumer spending in almost all areas: - We are not yet seeing a change in spending for out-of-home consumption, possib
Slide 35: Slide 35
Slide 36: Statement of financial position
Statement of financial position 1 36
Slide 37: Segment cash flows
Sligro Food Group NY. x €million Netherlands Belgium Group H1-2022 H1-2021 H1-2022 H1-2021 H1-2022 H1-2021 Net cash flow from business operations Interest paid Dividends received from participations Income tax received (paid) Net cash flow from operating activities Net investment in operations Net i
Slide 38: EBITDA for ratio calculation
EBITDA for ratio calculation 1 • EBITDA reported from 2019 including IFRS 16. • Financing based on net debt/EBITDA ratio not including IFRS 16. • Not including IFRS 16 paints a better picture of the cash position. 38