Sligro Food Group N.v. · EURONEXT:SLIGR
Sligro Food — FY2022 Earnings Presentation
47 slides from Sligro Food's earnings presentation, Feb 2, 2023
Slide 1: 2022 annual figures
2022 annual figures 2 February 2023
Slide 2: Agenda
Agenda • Welcome Koen Slippens • 2022 annual figures Rob van der Sluijs • Acquisition of Metro Belgium Rob van der Sluijs • Developments in 2022 Koen Slippens • 2023 annual plans Koen Slippens • 2023 outlook Koen Slippens 2
Slide 3: Abridged statement of profit or loss: Revenue
Abridged statement of profit or loss 1 Revenue • Strong revenue improvement due to fewer COVID-19 restrictions in 2022. • Change in legislation reduced tobacco revenue by €16 million. • Inflation approx. 9.7%, partly passed on in the price. • Cash-and-carry/delivery service ratio changed to 34/66 (2
Slide 4: Gross profit
Gross profit 1 • Higher gross profit margin overall in NL due to: - Transfer of operating responsibility Smeding; - Better inventory control; - Reduction in tobacco revenue share; - Slight negative effect of cash-and-carry/delivery service mix; - Better procurement conditions and promo effectiveness
Slide 5: Other operating income
Other operating income 1 • 2022: - €16 million one-off untaxed book profit on sale of stake in Smeding. • 2021: - Book profit of €4 million from the sale of the former Hoeckel site in ‘s-Hertogenbosch; - Income flow of €2 million due to settlement with Heineken. 5
Slide 6: Operating costs
Operating costs 1 Employee expenses: • Increase due to higher activity level. • NOW wage subsidy scheme2 and TWO wage subsidy scheme3 had zero impact in 2022 (2021: €29 million). Selling costs: • In 2021, release from provision for doubtful debts, increased income from adapted customer events and ta
Slide 7: Depreciation, amortisation and impairment
Depreciation, amortisation and impairment 1 • Lower depreciation on fixed operating assets due to limited investments in recent years. • Software-related impairment of €3 million in 2022 due to failure to use licences in the new ERP landscape. • From December 2022, €1 million extra amortisation per
Slide 8: Financial income and expenses and income tax
Financial income and expenses and income tax 1 • Agreement with Dutch and Belgian tax authorities on transfer pricing method from 2020 to 2025. • Untaxed book profit from the sale of the minority stake in Smeding. • €1 million in tax income related to tax loss carryforwards for De Kweker. 8
Slide 9: Abridged statement of cash flows
Abridged statement of cash flows 1 • Higher cash flow from operations due to increased profit and a limited increase in net operating capital. • Investments back to ‘normal level’: - Conversion work at outlets and the central complex; - IT & data infrastructure and software development; - Includes €
Slide 10: Financing
Financing 1 • Improved results meant that we remained well within the financing covenants at the end of December: Net interest-bearing debts / EBITDA = 1.4. • Early voluntary repayment of long-term credit facilities amounting to €20 million. • In 2023, repayment obligation of €30 million, i.e. moved
Slide 11: Net profit and earnings per share
Net profit and earnings per share 1 • A fine improvement compared to last year, in line with the original plan. • Does however fall short of the higher expectations in the late summer, due to the higher than expected impact of inflation and (one-time) costs in Q4. Dividend policy reinstated: Dividen
Slide 12: Segment results
Sligro Food Group NV. Netherlands Belgium? Group x€ million 2022 2021 2022 2021 2022 2021 Revenue 2,238 1,730 245 168 2,483 1,898 Organic revenue growth as % 29.3 (2.6) 46.3 (0.9) 30.8 (2.5) Gross profit as % of revenue 2A 26.4 23.0 24.9 26.7 26.3 Gross operating result (EBITDA) 134 110 (8) (1) 126
Slide 13: Acquisition of Metro Belgium
Acquisition of Metro Belgium
Slide 14: Acquisition of Metro Belgium: Background and strategic rationale
Acquisition of Metro Belgium Background and strategic rationale • Sligro Food Group has operated on the Belgian market since 2015: - Growth through acquisitions: ▪ JAVA Foodservice in 2016; ▪ ISPC in 2017; - Antwerp cash-and-carry opened in 2018; - Rate of growth hampered by: ▪ COVID-19; ▪ Licence i
Slide 15: Acquisition of Metro Belgium: Assets acquired
Acquisition of Metro Belgium Assets acquired Middelkerke Antwerp North • 9 Metro wholesale sites and the concession in Charleroi have been acquired Antwerp South Ghent St. Katelijne-Waver (“Acquired outlets”) including: Rotselaar Hasselt Wevelgem Brussels - Employees employed at the Acquired outlets
Slide 16: Acquisition of Metro Belgium: Approval and organisation
Acquisition of Metro Belgium Approval • Transaction notifiable to the Belgian Competition Authority (“BCA”). The latter, however, granted an unconditional exemption. • Investigation by and approval from the BCA are expected in the first half of 2023. • Appeal filed by one of the parties involved in
Slide 17: Acquisition of Metro Belgium: 2023 and beyond
Acquisition of Metro Belgium 1 2 3 2026 and beyond 2023 2024-2025 Revenue recovery & continued Period immediately post-acquisition Conversion growth • Strip, clean and reformat outlets based on the Sligro Food • From 2024, all the outlets will be • Further development of the Sligro-M Group Belgium p
Slide 18: Developments in 2022
Developments in 2022
Slide 19: General economic developments in the Netherlands
General economic developments in the Netherlands • Sharp decline in consumer confidence since mid-2021. • In October 2022, consumer confidence was at its lowest point in recent years. • For some years now, the correlation between food service market growth and trends in consumer confidence no longer
Slide 20: Food Service market development in the Netherlands
Food Service market development in the Netherlands • FoodService Instituut Nederland (“FSIN”) estimate for the food service market in 2022: - Market is worth €19.1 billion in terms of consumer spending: ▪ An increase of 43.8% vs. 2021; ▪ The market size is almost back to 2019 levels; - The market is
Slide 21: General economic developments in Belgium
General economic developments in Belgium • Consumer confidence in Belgium has declined since mid- 2021. • Consumer confidence in Belgium is less negative than in the Netherlands. • For some years now, the correlation between food service market growth and trends in consumer confidence no longer seem
Slide 22: Food Service market development in Belgium
Food Service market development in Belgium • Different definitions for the size of the food service market in Belgium and the Netherlands: figures for the two countries are not comparable. • Foodservice Alliance’s estimate for the food service market in 2022: - In terms of consumer spending, a marke
Slide 23: Reopening of sales markets
Reopening of sales markets • Recovery in revenue partly due to the decision not to impose COVID-19 measures after February 2022. • Shortages and severe scarcity in relation to parts of the product range: - Due to disruption of the global supply chain and the war in Ukraine; - We too struggle to meet
Slide 24: Cost inflation
Cost inflation • Strong increase in inflation in 2022: - Initially due to scarcity; - Aggravated by the war in Ukraine and the related energy crisis; - Not just procurement prices, but also the costs of labour, transport, energy and rent. • Price increases: - Partly offset by efficiency improvements
Slide 25: Strategic agenda: Reaping, growth, and returns
Strategic agenda Reaping, growth, and returns • In view of the situation, a quite decent performance in terms of complete and timely deliveries. • Targets for additional sales through the collaboration with Heineken were exceeded. • Successful festival season. • Successful new approach for fresh pro
Slide 26: Strategic agenda: Intense customer focus
Strategic agenda Intense customer focus • Focus on getting maximum value out of existing solutions for customers: - ‘Slimme Keuken’ (smart kitchen) and ‘Kleinste Keuken’ (smallest kitchen) offer added value for customers; - Substantial increase in the number of customers using these solutions. • Opt
Slide 27: Strategic agenda: Digital ambition
Strategic agenda Digital ambition • Digital environment increasingly central as the place for customer contacts. • Digital roadmap worked out in more detail and ambitions formulated for the coming years. • Our digital ambition focuses on the following: - It’s easy for me to do business with Sligro;
Slide 28: Strategic agenda: Uniform working method
Strategic agenda Uniform working method • Uniformity is important in a growing organisation. • We need to maintain a healthy balance between entrepreneurship and culture. • SAP contains blueprint processes and practices for all business units. • SAP go-live at a single site was the right choice. • I
Slide 29: Strategic agenda: People and organisation
Strategic agenda People and organisation • Our success is based on happy, engaged and motivated employees. • Recruitment and selection department and campaigns strengthened, as recovering demand puts increasing pressure on the organisation due to: ▪ Unavoidable staff reductions in recent years; ▪ Th
Slide 30: Strategic agenda: Sustainability
Strategic agenda Sustainability • A given for a family-owned listed company. • Preparations for the new European sustainability reporting legislation (CSRD): - Plan in place to ensure we meet new reporting requirements in a timely manner. • CSR Steering Committee reintroduced: - List of topics relev
Slide 31: Strategic agenda: Sustainability (continued)
Strategic agenda Sustainability (continued) • Carbon reduction progress compared to 2021: - Increase in electricity consumption of only 3%, compared to an increase in revenue of over 30%; - Decrease in gas consumption of 12% due to the addition of two ‘gas-free’ properties and warmer weather; - Addi
Slide 32: Network of sites
Network of sites Achieved in 2022 • Refurbishments: - Arnhem cash-and-carry outlet; - Haarlem cash-and-carry outlet; - Doetinchem cash-and-carry outlet. Scheduled for 2023 • Refurbishments: - Alkmaar cash-and-carry outlet (already started in 2022); - Emmen cash-and-carry outlet; - Leeuwarden cash-an
Slide 33: End of court case concerning EMTÉ
End of court case concerning EMTÉ • The Court of Amsterdam had dismissed all claims in 2021. • The option to appeal expired on 10 February 2022. • The consortium has decided not to appeal. 33
Slide 34: 2023 annual plans
2023 annual plans
Slide 35: Annual plans: Operations
Annual plans Operations • Sell more to existing customers (“fill” strategy): - Through the partnership with Heineken; - Improved approach regarding fresh produce and wines. • Restore smooth processing in operations and bring logistics performance to the desired level: - Better service for customers,
Slide 36: Annual plans: Products and services
Annual plans Products and services • Customer Solutions: - Further intensify use of solutions; - Hardware and software for POS systems to generate better information relating to procurement and costs for our customers. • Intensify communication with customers: - Regarding the delivery status of prod
Slide 37: Annual plans: Digital ambition
Annual plans Digital ambition • Primarily put effort into solutions that: - Increase operational efficiency; - Offer customers more self-service options. • Merge all the data in the organisation into one data lake. • Further use of APIs (Application Programming Interfaces): - With the aim of simplif
Slide 38: Annual plans: ERP landscape
Annual plans ERP landscape • After the SAP go-live in 2022: - SAP roll-out to Sligro-ISPC and JAVA sites in Belgium; - Prepare schedule for the roll-out to the Netherlands and Sligro-M. Plaatje volgt. • Strong focus on changes to: - The organisation; - Bringing processes up to the desired standards.
Slide 39: Annual plans: People and organisation
Annual plans People and organisation • A tight labour market means that we have to stand out: - Creative recruitment; - Renewed and intensified labour market communications; - Onboarding; - Greater visibility at relevant educational institutions. • In relation to existing employees, attention for: -
Slide 40: Annual plans: Sustainable business
Annual plans Sustainable business • Our initiatives are laid out in a clear roadmap and increasingly related to concretely measurable KPIs. • The reduction in carbon emissions will come from: - Planned building remodels in 2023; - The use of electric transport vehicles; - The expansion of our solar
Slide 41: Annual plans: Smarter Together
Annual plans Smarter Together • The year 2023 will revolve around ‘Smarter Together’. • Together as teams within Sligro Food Group: - Netherlands and Belgium; - Existing colleagues and the many new Metro colleagues; - The service centre and colleagues in the field; - Functional teams and cross-funct
Slide 42: Outlook
Outlook
Slide 43: Market conditions
Market conditions • We expect: - Inflation to increase further: ▪ Rising prices in the wholesale market and for consumers; ▪ The impact on spending is uncertain in view of the compensation for rising energy costs, tax relief measures and rising wages; - Spending in the “out-of-home” channel to remai
Slide 44: Financial
Financial • No concrete results forecast for 2023. • Aspects to consider in 2023: - Not possible to meaningfully compare the first quarter of 2023 to 2022; - The revenue share of tobacco will continue to decline towards 6%; - Increased costs in relation to SAP: ▪ Approximately €10 million increase i
Slide 45: Slide 45
Slide 46: Financial position
Sligro Food Group NV. x € million 2022 2021 x € million 2022 2021 Assets Liabilities Goodwill 125 125 Paid-up and called-up capital 3 3 Other intangible assets 144 146 Share premium 31 31 Property, plant and equipment 281 282 Other reserves (4) (4) Right-of-use assets 203 211 Retained earnings 449 4
Slide 47: Segment cash flows
Sligro Food Group NV. Netherlands Belgium? Group x€ million 2022 2021 2022 2021 2022 2021 Net cash flow from business operations 108 71 (8) 0 100 71 Interest received and paid (3) (2) 0 0 (3) (2) Dividends received from participations 6 5 0) 0 6 5 Income tax paid (11) (1) (1) to) (12) (1) Net cash f