{"id":16310,"date":"2018-10-30T10:03:00","date_gmt":"2018-10-30T10:03:00","guid":{"rendered":"https:\/\/diacorporate.com\/?p=16310"},"modified":"2021-02-15T10:37:21","modified_gmt":"2021-02-15T10:37:21","slug":"dia-group-posts-2-7-lfl-sales-growth-in-9m-2018","status":"publish","type":"post","link":"http:\/\/diacorporate.tribecamedia.com\/en\/dia-group-posts-2-7-lfl-sales-growth-in-9m-2018\/","title":{"rendered":"Dia Group posts 2.7% LFL sales growth in 9M 2018"},"content":{"rendered":"\t\t
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Dia Group posts 2.7% LFL sales growth in 9M 2018<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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October 30, 2018<\/p><\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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The company\u2019s aim is to consolidate its leadership position in the Spanish food retail market.<\/p>

Antonio Coto stated that \u201cwe will concentrate our efforts in Spain, our main market, with a realistic
and strict operating change plan in the short term, in order to reverse the current trend. We will focus
on customer\u2019s satisfaction and on cash generation\u201d.<\/p>

In Spain, capex reached EUR196m between January and September, implying a 71% increase.<\/p>

Operating profit, adjusted EBITDA, fell by 24% to EUR281m.<\/p>

The CEO wanted to make it clear that \u201cit\u2019s time to look ahead; I want to promote a DIA where the
entire value chain must be put at the service of clients listening them to know their preferences and
tastes, so they can find in our stores quality products at the best price with excellent service\u201d<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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During the first nine months of the year, the Dia Group\u2019s LFL sales grew by 2.7%, excluding the calendar\u00a0effect. However, including the depreciation effect of the Brazilian and Argentinian currencies, sales fell by\u00a09.0%, which implies gross sales under banner of EUR6.949bn.<\/p>

CEO Antonio Coto wanted to highlight that \u201cthe group\u2019s intrinsic value is beyond doubt, and its more than 7,000 stores continue to do business as usual, with good sales volumes and cash flow generation\u201d.<\/p>

Capex reached EUR269.1m, of which EUR196m was invested in Spain in the remodelling of the proximity\u00a0stores. This figure is almost three times higher than the same period in the previous year.
Operating profit, adjusted EBITDA, fell by 24% to EUR281m.<\/p>

For the full-year 2018, the Dia Group reiterates its EUR350-400m adjusted EBITDA range, versus EUR586m\u00a0in 2017.<\/p>

Around 2,5% of this decrease is due to a reduction in sales in Iberia, where a series of strategic policies that\u00a0were implemented have not yielded the expected results (the low level of adaptation of the company\u2019s\u00a0products, services, and own label range to clients\u2019 current needs).
The Dia Group is clear about its strategy and the winning formats on which it needs to focus investments to\u00a0maximise returns and value for the business,<\/p>

1) DIA&Go and la Plaza are posting LFL growth rates of over 20% and 8% respectively;
2) Online sales are generating strong growth, with a 30% increase in the 12 months to September and a\u00a0market share of 10%, and it is an essential value driver for a proximity business like the Dia Group\u2019s.<\/p>

Antonio Coto gave a clear and strong message regarding DIA\u2019s future outlook, based on the strength of its brand and its track record in terms of generating margins that are way above the sector average. In order to cope with the current difficulties, the CEO stated that \u201cthe company will place an emphasis on cautious cashflow management and on reducing capex levels in the short term\u201d. “We will be much more disciplined with each euro that we invest, as with the monitoring and control of returns “, and he made it clear that he does not anticipate any detriment to the business profile as a result of the measures adopted.<\/p>

He stated that \u201cthe efforts will be focused on Spain, with an operating plan aimed at a realistic and strict recovery in the short term, with the objective of turning around the current negative trend\u201d.
Outside Spain, the Dia Group basically plans to follow the key initiatives implemented in Spain, with a more\u00a0selective and restrictive focus on investments. Antonio Coto highlighted the good positioning of the\u00a0businesses in Brazil and Argentina, although he recognised that \u201cin light of the macroeconomic uncertainty\u00a0that is currently affecting these two economies, it is time to maintain a neutral stance, with no measures one\u00a0way or the other\u201d.<\/p>

\u201cLooking at the future, I want to build a DIA that is entirely focused on clients, and they will define our
conversations from now on. All of DIA\u2019s value chain must be put at the service of the client so that they can\u00a0find in our stores quality products at the right price with excellent service. In order to achieve this, I have\u00a0already started to work closely with our suppliers, franchisees, and employees\u201d, stated Antonio Coto, CEO of\u00a0the Dia Group.<\/p>

As of September 2018, net debt was EUR1.42bn and the Dia Group had a network of 7,429 stores.\u00a0<\/p>

GLOSSARY
\u25cf Gross sales under banner: Total turnover value obtained in stores, including indirect taxes (sales receipt value) in all the company\u2019s stores, both owned and franchised.
\u25cf LFL sales growth under banner: Growth rate of gross sales under banner at constant currency of the stores that have been operating for more than thirteen months under the same business conditions.
\u25cf Other items excluded from adjusted EBIT: Volume of costs and revenues the company isolates in the management accounts to gain a better understanding of the underlying performance of the core business\u00a0during the period. Items usually excluded from adjusted EBIT are classified between \u201cOther cash items\u201d
(Expenses relating to acquisitions, expenses for restructuring and efficiency projects, expenses relate to the\u00a0transfer of own stores to franchises, and gains on disposal of assets), \u201cExpenses related to share-based\u00a0payments transactions\u201d and \u201cOther non-cash items\u201d (Losses on write-down of fixed assets, impairment of\u00a0fixed assets and amortization related to the closing of stores).
\u25cf Adjusted EBITDA: Operating profit after adding back depreciation and amortization (including amortization\u00a0related to the closing of stores and impairment of fixed assets), losses on write down of fixed assets, \u201cOther\u00a0cash items\u201d and \u201cExpenses related to share-based payments transactions\u201d.
\u25cf Adjusted EBIT: Operating profit after adding back \u201cOther cash items\u201d, \u201cExpenses related to share-based\u00a0payments transactions\u201d and \u201cOther non-cash items\u201d.
\u25cf Underlying net profit: Net income calculated on net profit attributable to the parent company, adjusted by\u00a0\u201cOther items excluded from adjusted EBIT\u201d, \u201cItems excluded from financial income and expenses\u201d, \u201cItems\u00a0excluded from income tax\u201d and \u201cLosses net of taxes of discontinued operations\u201d.
\u25cf Basic EPS: Fraction of the company\u2019s profit calculated as net attributable profit divided by the weighted\u00a0average number of shares.
\u25cf Underlying EPS: Fraction of the company\u2019s profit calculated as underlying net profit divided by the weighted\u00a0average number of shares.
\u25cf Net financial debt: Overall financial situation of the company that results by subtracting the total value of\u00a0company’s short-term, long-term financial debt, other financial liabilities from the total value of its cash,\u00a0cash equivalents, and other liquid assets. All the information necessary to calculate the company’s net debt\u00a0is included in the balance sheet.
\u25cf Cash from operations: Adjusted EBITDA less \u201cOther cash items\u201d, less Capex excluding acquisitions. This\u00a0internally calculated cash flow measure is included as one of the key financial metrics of the long-term\u00a0incentive plan for the company\u2019s top management.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Related documents<\/h2><\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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