Sligro Food Group N.v. · EURONEXT:SLIGR
Sligro Food — Investor Day (October 2023)
47 slides from Sligro Food's investor day presentation, Oct 19, 2023
Slide 1: Capital Markets Day Sligro Food Group
Capital Markets Day Sligro Food Group 19 October 2023
Slide 2: About this document
About this document Disclaimer forward-looking statements: This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts and include (but are not limited to) statements expressing or implying the beliefs, expectations, intentions, fore
Slide 3: Agenda & presenters
Agenda & presenters Agenda: Koen Slippens CEO, Sligro Food Group 1• Sligro at a glance With the company since 1998 2• Looking back Rob van der Sluijs 3• Looking forward CFO, Sligro Food Group •4 Belgium With the company since 2007 •5 Data and Technology •6 The Netherlands Dries Bögels 7• Summary and
Slide 4: Sligro at a glance
Li! i See Sligro at a glance
Slide 5: Sligro at a glance
Sligro at a glance Channels Delivery 66% Cash-and-carry 34% Sligro Food Group is a leading company in the food service market in the Netherlands and Belgium Comprehensive range of food and food-related non-food products and services in the wholesale market Revenue (x € million) ~26% ~3% market s
Slide 6: Strategy
Strategy Helping every professional in food truly get ahead Clear market leader in B2B foodservice markets in the 1 Netherlands and Belgium Focus on food and food-related non-food products and 2 services Our proposition combines customer focus and 3 operational excellence Decentralised commercially
Slide 7: Business model drivers
Business model drivers Continuous (volume) growth, organically and/or through acquisitions, transferred into economies of scale advantages Centralised in house procurement department, combined with strategic partnerships through Superunie and fresh partners Centralised IT infrastructure with integra
Slide 8: Sustainability at the core of our strategy
Sustainability at the core of our strategy As a listed family business, treating those around us 1 and the environment with decency and respect comes naturally Long-term effort, focus and proven track record on three major pillars where we believe we have most 2 impact: People, Environment and Produ
Slide 9: Double materiality assessment
Double materiality assessment 1 Scope & objectives H1 2022 Completed 2 Identification H1 2022 Completed 3 Assessment H2 2022 Completed 4 Engagement H2 2023 In progress 5 Reporting 2023 / 2024 In progress 8
Slide 10: ESG – material topics
ESG – material topics Environment Social G overnance Climate change ESRS E1 Own workforce ESRS S1 Business conduct ESRS G1 Greenhouse gas emissions Employment and working conditions Business ethics and integrity Energy consumption Employee satisfaction and development Information securit
Slide 11: Looking back
2 Looking back
Slide 12: Key economic indicators (2018-2023 YTD)
Key economic indicators (2018-2023 YTD) Consumer confidence negatively influenced by COVID-19, war in Ukraine, high inflation and political uncertainty in our geographies Low unemployment acts as a counterbalance to low consumer confidence Inflation (and interest rates) at these levels have a
Slide 13: Market position 2018 – 2022
Market position 2018 – 2022 1 Sligro Food Group Netherlands market share 1 Market share in the Netherlands: +1,3% 25,6% We have strengthened our market position significantly 0,7% over the last 4 to 5 years1 -0,4% 1,1% Fluctuation caused by COVID-19 impact and mix of 24,3% activities compared wi
Slide 14: Financials 2018 – 2022
Financials 2018 – 2022 Sligro Food Group EBITDA % Revenue x € ’000.000 Revenue recovered compared with 2018, mainly because of €2.500 €2.483 6,0% inflation (15%), which means 2022 market volumes are still 8% €2.395 €2.400 €2.346 5,0% below 2018 levels (including 7 weeks COVID-19 restrictions in €2
Slide 15: 2022 to 2023: continued challenging market conditions
2022 to 2023: continued challenging market conditions Ongoing optimisation Gaining market share in Clear agenda for and integration of the Netherlands and 2024/2025 focussed on Sligro-M Belgium results improvement 2022 2023 Disturbing impact of Market volumes and inflation and interest Dutch househo
Slide 16: Key developments in recent years
Key developments in recent years 2018-2022 Carve out of EMTE followed by restructuring of headquarters Done. Dis-synergies largely absorbed Significant upfront investment partnership with HEINEKEN Done. Upsell generation started during COVID-19, target 2018-2022 with full integration achieved in 202
Slide 17: Looking forward
3 Looking forward
Slide 18: Mid-term objectives
Mid-term objectives EBITDA Belgium Target 2025: structurally 7.5% 7.5% of sales profitable Focus of this presentation Market share gains through organic growth and Employee satisfaction acquisitions improve to 70 ‘E&H’ product range Carbon reduction (as % of revenue) NL: 15% -40% in 2025 BE: 10% -50
Slide 19: 7.5% EBITDA improvement
7.5% EBITDA improvement EBITDA % High end Low end 8% 7% 6% 5% 4% 3% 2% 1% 0% Normalised Logistics BE Centralised Sligro-M Upsell NL Remaining Tobacco Target cost Gross margin EBITDA 2025 EBITDA operations organic growth reduction 7.5% Based on the initiatives presented, we aim to improve EBITDA towa
Slide 20: Economic outlook
Economic outlook Value pin transactions. Source: Macro bond, CBS and ING research Number of bankruptcies of businesses and institutions (including sole proprietorships adjusted for court sessions days). Source: CBS 110 Change in behaviour from 500 Q3-2023 105 400 100 Household consumption 300 an
Slide 21: Market outlook 2024
Market outlook 2024 * Consumer spend in EUR; growth rates vs. 2023 1 FSIN expects the Dutch OOH market to grow in 2024 (6.1%) TURNOVER FOR FOOD & BEVERAGE 2024 Growth is slowing down as inflation is coming down, volumes 2 expected to increase slightly € 75.257 m* + 3.5% Downtrading continues in 2024
Slide 22: Market outlook 2030
Market outlook 2030 * Consumer spend in EUR; growth rates vs. 2023 1 FSIN expects the Dutch OOH market to grow towards 2030 (31%) TURNOVER FOR FOOD & BEVERAGE 2030 Slowdown in 2024, markets to pick up thereafter, correlation to 2 consumer confidence expected to restore € 87.400 mln* + 20% Out-of-hom
Slide 23: Looking forward: Belgium
4 Looking forward: Belgium
Slide 24: Change of course in Belgium
Change of course in Belgium Apply learnings from past years and successful acquisition & integration strategy at Sligro-M Disconnect Belgian operational performance improvement from SAP development and roll-out Roll in legacy IT and harmonise ways of working according to proven policies, proce
Slide 25: Efficiency gains through network optimisation
Efficiency gains through network optimisation Customer delivery situation in 2023: All delivery service locations (Ghent, Liège, Antwerp and Rotselaar) in Belgium supply customers all over Belgium Customers are bound to their format and location: • Former ISPC customers to Ghent and Liège • Form
Slide 26: Efficiency gains through network optimisation
Efficiency gains through network optimisation Customer delivery situation by end of 2024: Belgium divided in 4 delivery regions, with customers assigned to nearest delivery service location Customers commercially remain in their original format, Sligro-ISPC / M or JAVA, but can logistically be s
Slide 27: Efficiency gains through network optimisation
Efficiency gains through network optimisation Veghel Optimise around the Central Distribution Centre in Veghel: Antwerp 2023 As a result of a fragmented legacy IT landscape and non- harmonised product portfolio, there are daily logistics Ghent Rotselaar flows between all locations in Belgium to tran
Slide 28: Optimise and integrate Sligro-M
Optimise and integrate Sligro-M Situation in 2023: Cash & Carry operations in 8 locations up and running, moving towards 70% of original sales level by the end of 2023. Operations in Middelkerke from pop-up store at less than 10% of potential volume. Delivery operations to be relaunched (histo
Slide 29: Optimise and integrate Sligro-M
Optimise and integrate Sligro-M Situation in 2024 - 2025: Cash & Carry operations in 9 locations moving beyond 90% of original sales level, reopening Middelkerke at original location Adding two new locations to the network in Leuven (2025) and Charleroi (2026) Delivery operations to gradually regain
Slide 30: Synergy on marketing and branding cost and power
Synergy on marketing and branding cost and power 29
Slide 31: Looking forward: Data and technology
5 Looking forward: Data and technology
Slide 32: Change of course in ERP (lessons learned)
Change of course in ERP (lessons learned) Management attention Management focus, COVID-19 survival mode People Dependency on external expertise & experience Role of partners (SAP & KPS) Solution Quality control on solution design SAP Implementation approach Choice of lead deployment site
Slide 33: Change of course in ERP (way forward)
Change of course in ERP (way forward) SAP is confirmed as the target solution, with ambition to be live in 2026 in both the Netherlands and Belgium Management attention Dedicated executive ownership People Investment in internal expertise & experience Resetting the role of partners Solution
Slide 34: Continuously improve functionality and features that reduce costs
Continuously improve functionality and features that reduce costs More satisfied customers and efficiency gains through (digital) 1 cost reduction programmes like ‘self-service’ 2 Launch self-service features in our portal Reduce incoming calls/emails, automate repetitive tasks and cross-functiona
Slide 35: Continuously improve cross & upsell to boost top line result on our platform
Continuously improve cross & upsell to boost top line result on our platform Convenient and personalised online shopping experience leads to an increase in turnover and higher margins Increase in traffic to cash & carry through personalised promotions by mail Promote private and exclusive brands
Slide 36: Looking forward: the Netherlands
6 Looking forward: the Netherlands
Slide 37: Targeted upselling improves relative returns
Targeted upselling improves relative returns Distribution of revenues to existing Deliver Service customers (excl. National Accounts) Market size of independent delivery service customers estimated at Yearly turnover in euros 40,000 outlets of which 50% are an active Sligro Food Group € 140.000 cust
Slide 38: Upsell examples
Upsell examples Bar Bascafé Nijmegen Golfclub De Haenen Restaurant Grevelingen Bruinisse 2022: €36k (drinks) 2022: €35k (drinks) 2022: €40k (dry groceries only) 2023: €140k (wine & food) 2023: €220k (wine & food) 2023: €400k (all categories)
Slide 39: Improving mix in customer base and product mix
Improving mix in customer base and product mix Business channel mix Cash-&-Carry Delivery Customer mix Regional Key accounts Focus on retaining (and slightly improving) current market share levels but improving mix Adding volume through upselling with existing customer as explained before 61,4% 62,9
Slide 40: Efficiency gains through central governance
Efficiency gains through central governance Clarity and control on the correct application of Group policies will lead to faster and better decision-making Simplifying the organisation structure leads to a more hands on management style, reducing complexity and creating a more efficient organisation
Slide 41: Efficiency gains through cost reduction programs
Efficiency gains through cost reduction programs Business as usual: Stabilisation of SAP Phasing out legacy Small (digital) Shift from physical to cost drive and strict program leads to technology reduces innovations to reduce digital marketing tools budget management lower OPEX burden (double) cost
Slide 42: Restoring the balance in pricing mechanism
Restoring the balance in pricing mechanism Gross profit margin (as a % of sales excluding tobacco and fees) Annual improvement of purchasing conditions (as a % of sales) Historically, gross margin improvement was driven by YoY improvement of purchasing terms (average 0.4%) and passing on Avg. YoY im
Slide 43: Summary & key takeaways
7 Summar y & key takeaways
Slide 44: 7.5% EBITDA improvement
7.5% EBITDA improvement EBITDA % High end Low end 8% 7% 6% 5% 4% 3% 2% 1% 0% Normalised Logistics BE Centralised Sligro-M Upsell NL Remaining Tobacco Target cost Gross margin EBITDA 2025 EBITDA operations organic growth reduction 7.5% Based on the initiatives presented, we aim to improve EBITDA towa
Slide 45: Financial framework
Financial framework Target reduction of working capital Target reduction of CAPEX below Dividend policy remains as is, (between 0 – 5 days of sales), long term 2.5% of revenue ambition at pay-out of 60% of net profit mainly through inventory reduction 44
Slide 46: Key takeaways
Key takeaways 7.5% Well positioned to gain Focus on cost Gradual ERP transition to ESG ambitions more Mid-term target of 7.5% market share and retain management and achieve end state in 3 explicit to address CSRD EBITDA retained, and expand position in efficiency improvements years in a controlled a
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