Sligro Food Group N.v. · EURONEXT:SLIGR
Sligro Food — H1 2020 Earnings Presentation
50 slides from Sligro Food's earnings presentation, Jul 23, 2020
Slide 1: Half-year figures 2020
Half-year figures 2020 Amsterdam, 23 July 2020
Slide 2: Agenda
Agenda • Welcome Koen Slippens • Half-year figures 2020 Rob van der Sluijs • Developments Netherlands Koen Slippens • Developments Belgium Koen Slippens • Outlook Koen Slippens 2
Slide 3: Abridged statement of profit or loss
Abridged statement of profit or loss 1 Net sales • Quarterly trend: from -55% to -35%. • Relatively limited decline in petrol and healthcare, growth in tobacco products. • Hospitality: 90% decline, gradual recovery. • Catering and events 90%-100% decline, limited recovery. • Ratio of DS/C&C changed
Slide 4: COVID-19: impact on net sales
COVID-19: impact on net sales • Major impact of COVID-19 outbreak and subsequent government measures. • Group net sales, excluding tobacco products and De Kweker has fallen by almost 55% since mid-March compared with 2019. • Slow recovery in second quarter with gradual relaxation of government measu
Slide 5: COVID-19: measures
COVID-19: measures First half of 2020 Second half of 2020 • Temporary opening of C&C for retail customers (to 1 July), except for De Kweker. • Recovery phase not expected until second half of 2021. • Cost reduction: • Further adaptation of organisation with a view to the - Reduction in temporary sta
Slide 6: Gross margin
Gross margin 1 • Extra shrinkage as a result of Covid-19 is approximately €3 million. • Impact of mix on gross margin %: - C&C/DS positive impact. - Segments/Tobacco products negative impact. - Less beer & cider = less fee negative impact. 6
Slide 7: Other operating income
Other operating income 1 • Drachten location sold for €8 million above carrying amount. In accordance with IFRS, €1 million has been recognised in profit or loss. €7 million will be recognised in profit or loss during the life of the lease agreement. • Sale and leaseback transactions in Breda and Ma
Slide 8: Operating costs
Operating costs 1 • Additional costs De Kweker €11 million (mainly salaries and social security costs). • Reduction of staff and transport. • Use of NOW scheme2 in the Netherlands: €13 million. • Use of TWO scheme3 in Belgium: €2 million. • Extra provisions formed for receivables and loans provided
Slide 9: Depreciation, amortisation and impairments
Depreciation, amortisation and impairments 1 • Impairment of €2 million for software in Belgium and SO 3.0 (SO 4.0 taken into use in July). • Lease costs increase with €2 million per year as a result of sale and leaseback transactions in 2020 (depreciation and interest). • Impairment Belgium see nex
Slide 10: Goodwill and intangible fixed assets
Goodwill and intangible fixed assets 1 3 0 Ju n e 2 8 D e ce m b e r x € million 2020 2019 Impairments Belgium • Full confidence in Belgium. 125 168 • Recovery to profit due to COVID-19 taking longer than 80 102 expected. 15 15 10 11 • End of 2019, limited headroom of €21 million. 105 128 • WACC ass
Slide 11: Financial income and expenses and income taxes
Financial income and expenses and income taxes 1 • Financing expenses on leases higher as a result of sale and leaseback transactions 2019/2020. • Negative income tax expenses due to negative taxable profit, available for future tax offset. • Release of €4 million of deferred tax liability in relati
Slide 12: EBITDA for ratio calculation
EBITDA for ratio calculation • Reported EBITDA since 2019 including IFRS 16. • Financing based on Net Debt/EBITDA ratio excluding IFRS 16. • Excluding IFRS 16 provides better understanding of cash position. 12
Slide 13: Net profit and earnings per share
Net profit and earnings per share 1 • No final dividend for 2019. • No basis for paying dividend over 2020. • Priority is to recover financial position. 13
Slide 14: Abridged statement of cash flows
Abridged statement of cash flows 1 • Lower cash flow from business operations owing to lower EBITDA. • Position of deferred tax payments as a result of COVID-19, €24 million. • Limited dividends from associates in H1 2020 owing to COVID-19. • Acquisition of Wheere (De Kweker) in 2019, for which loan
Slide 15: Segmented cash flow
Segmented cash flow! Sligro Food Group NY. x €million Netherlands Belgium Group H1-2020 H1-2019 H1-2020 H1-2019 H1-2020 H1-2019 Net cash flow from business operations Interest received and paid Dividends received from associates Income tax paid Net cash flow from operating activities Investments/div
Slide 16: Financing
Financing 1 • Based on expectations at end of Q1, talks were started with financiers. • Relaxation of short-term overdraft facility to €167 million, in particular, also more committed. • Temporary relaxation of covenant Net interest-bearing debt/ EBITDA (excluding IFRS 16) to get through measurement
Slide 17: Segment figures
Segment figures? Sligro Food Group NY. Netherlands Belgium Group x€ million H1-2020 H1-2019 -H1-2020_-H1-2019 _-H1-2020_—-H1-2019 Net sales 858 1,022 85 113 943 1,135 Gross margin as % of net sales 23.4 24.2 23.1 22.1 23.4 24.0 Gross operating result (EBITDA) 30 59 (3) (3) 27 56 Operating result bef
Slide 18: Jumbo Coop Claim
Jumbo Coop Claim • On 13 March 2020, Sligro learnt of a writ of summons issued by the Jumbo & Coop consortium, resulting from the transaction concerning the sale of EMTÉ in 2018. • The consortium alleges that in the context of this transaction, an incorrect picture had been painted of EMTÉ’s histori
Slide 19: Developments in the Netherlands
Developments in the Netherlands
Slide 20: General economic development in the Netherlands
General economic development in the Netherlands • Sharp decline in consumer confidence as a result of COVID- 19. • After COVID-19 there will still be an impact on consumer confidence and the unemployment rate. 20
Slide 21: Developments in the Netherlands
Developments in the Netherlands • Impact of COVID-19 on Dutch sales markets: - Shift from foodservice to retail; - Decline in net sales primarily in delivery owing to decline in segments such as restaurants, catering, events, sport and recreation; - Cash-and-carry net sales growing, partly as a resu
Slide 22: De Kweker acquisition
De Kweker acquisition Progress of integration • Further implementation of planned organisational change, phasing out of head office. • Integration of procurement contracts, benefit better than expected. • Technical integration of Cash-and-carry and Delivery service accelerated to October. • De Kweke
Slide 23: Heineken partnership
Heineken partnership Looking back on first half of 2020 • Integration of premises nearing completion. • Sligro Online 4.0 live is condition of one order invoice. Looking ahead to second half of 2020 • Completion of integration of premises (18 July closure HDC Oss). • Start of full-service for custom
Slide 24: Heineken partnership: premises integration timetable
Heineken partnership: premises integration timetable 24
Slide 25: Network of sites
Network of sites C&C postponed • Heerlen (type III) • Arnhem (type III) DS already delivered 2020 • Maastricht (Q1) • Breda (Q2) DS further planned 2020 • Vianen (Q3) • Relocation slowmover and Account Only DC from Den Bosch to Nieuwegein 25
Slide 26: C&C Next Gen: frictionless online and offline customer journey
C&C Next Gen: frictionless online and offline customer journey Digitalise customer journey Know the customers, Offer choice where online and offline inspire them and reinforce one another approach them personally Online 1. Look 2. Choose 3. Buy 4. Receive 5. After-Sales Offline 26
Slide 27: C&C Next Gen: broad project portfolio
C&C Next Gen: broad project portfolio Brand & Customer Order & Deliver Digitalise format elements Stand out in customer Product satisfaction C&C range & outlet Price & Promo 27
Slide 28: C&C Next Gen: growth opportunities via hybrid order and delivery
C&C Next Gen: growth opportunities also via hybrid order and delivery solutions Customer options Customer orders online Customer purchases in outlet Work Fulfilment in progress Sligro DS C&C hub C&C full Sligro Express Cash-and-carry 28
Slide 29: C&C Next Gen: delivery from C&C started in week 8 2020
C&C Next Gen: delivery from C&C started in week 8 2020 • Half of the C&C-outlets. • There is a demand, rapid growth, week on week. • Strengthen customer relationship. • Building block in SFG network. 29
Slide 30: C&C Next Gen: effective promotions, physical and digital
C&C Next Gen: use effective promotions with physical and digital reinforcing one another Reduction in promotional material More personal offers by e-mail 30
Slide 31: C&C customer: Food professional
C&C customer: Food professional Sees Rutte’s press conference. Can open again from 1 June. In the picture 31
Slide 32: C&C customer: Food professional
C&C customer: Food professional Sees Rutte’s press conference. Can open again from 1 June. In the picture Sees ‘Ready for hospitality restart’ message. 32
Slide 33: C&C customer: Food professional
C&C customer: Food professional Sees Rutte’s press conference. Can open again from 1 June. In the picture Googles... Looks at the tips Sees ‘Ready for and inspiration hospitality restart’ Sligro.nl/Horeca- message. Herstart. 33
Slide 34: C&C customer: Food professional
C&C customer: Food professional Visits Sligro Amsterdam Sees and orders Sligro safety and makes purchases for pack. first guests. In the picture Googles... Looks at the tips Sees ‘Ready for and inspiration hospitality restart’ Sligro.nl/Horeca- message. Herstart. 34
Slide 35: C&C customer: Food professional
C&C customer: Food professional Visits Sligro Amsterdam Sees and orders Sligro safety and makes purchases for Sees Rutte’s press pack. first guests. conference. Can open again from 1 June. In the picture Googles... Loyal customer Aftercare or Looks at the tips service Sees ‘Ready for and inspiration
Slide 36: Developments in Belgium
Developments in Belgium
Slide 37: General economic development in Belgium
General economic development in Belgium • Consumer confidence: - Sharp fall as a result of COVID-19; - Was already negative before COVID-19, and has not been as positive as in the Netherlands in recent years. • Unemployment rate: - Figure for 2020 Q2 not yet available. 37
Slide 38: Developments in Belgium
Developments in Belgium • Relatively limited decline in JAVA net sales owing to large share in healthcare. • Sligro-ISPC net sales: - Delivery net sales to hospitality in particular almost collapsed; - Losses from delivery net sales offset partly by cash-and-carry net sales; - Cash-and-carry net sal
Slide 39: Network of sites
Network of sites Already delivered in 2020 • New signing Sligro-ISPC Ghent and Liège (Q1). • Refurbishment of head office in Rotselaar (Q2). • Land in Bruges sold (Q2). • Layout of Antwerp updated in line with C&C/DS ratio (Q2). Also planned in 2020 • Expansion (internal) of refrigeration and freeze
Slide 40: Update SAP
EN EERLJK ETEN BEREIKBAAR MAK
Slide 41: SAP ERP implementation: achieved so far
SAP ERP implementation: achieved so far Construction phase • The development of the prototype of the SAP system that we will use to manage our business processes is at an advanced stage. • Our business processes have been widely updated so that they can be managed using SAP software in the future. •
Slide 42: SAP ERP implementation: planning
SAP ERP implementation: planning Planning in second half of 2020 and first half of 2021 1. Finalise the development of the SAP system prototype. 2. Continue testing the SAP system based on all relevant business scenarios. 3. Train the users to work with the SAP system and the new way of working. 4.
Slide 43: Sligro Online 4.0: to 1 portal Sligro.nl
Sligro Online 4.0: to 1 portal Sligro.nl From To Different customer experience, site and shop are Better customer experience, seamless transition of independent content and commerce to a single URL: sligro.nl 43
Slide 44: Sligro Online 4.0: faster, more stable and simpler
Sligro Online 4.0: faster, more stable and simpler Performance: Design: Pages load faster More user friendly Less than one second per page For example, easy to drag order list in preferred order 44
Slide 45: Sligro Online 4.0: phased, controlled roll-out
Sligro Online 4.0: phased, controlled roll-out National First customers - SE Accounts Customer selection Train Telesales Customer communication Customer feedback Support process Evaluate & Scale up nationally NA improve Customer selection Train Telesales Customer communication Customer feedback Supp
Slide 46: Sligro Online 4.0: including Heineken and De Kweker
Sligro Online 4.0: including Heineken and De Kweker Test / UAT Start roll-out Full roll-out Q2 June August October November 46
Slide 47: Outlook
Outlook
Slide 48: Outlook
Outlook Market conditions • Continued pressure of government measures concerning COVID-19 on sales markets. • Economic aftermath of COVID-19 is affecting consumer confidence and unemployment, separate from potential ‘second wave’. • Pre COVID-19 net sales levels will not be achieved until at least s
Slide 49: Slide 49
Slide 50: Abridged statement of financial position
Abridged statement of financial position 1 50