Bellis Finco (ASDA) Q4 2024 earnings summary

Executive summary

• Revenue including fuel rose to £26,847m in FY24, up from £25,617m in FY23, driven by a full year of sales from recent acquisitions, despite a decline in ex-fuel sales.

• Adjusted EBITDA increased 6% year-over-year to £1,141m, reflecting disciplined cost control and integration of new businesses.

• The group reported a net loss of £487m (FY23: net profit £195m), mainly due to a net impairment charge of £378m and higher finance costs.

• Significant investments were made in IT infrastructure (Project Future), store operations, and colleague pay to enhance customer experience and operational efficiency.

Financial highlights

• Revenue ex-fuel declined 0.8% year-over-year to £21,713m; like-for-like sales ex-fuel fell 3.4%.

• Operating profit pre-non-underlying items improved to £671m (FY23: £637m), but post-non-underlying items resulted in an operating loss of £44m.

• Adjusted EBITDA rose to £1,141m (FY23: £1,078m); Pro Forma EBITDA was £1,235m.

• Underlying Free Cash Flow increased to £817m (FY23: £776m); Total Free Cash Flow was £564m (FY23: £676m).

• Net debt stood at £3,831m, with pro-forma adjusted leverage at 2.9x (down from 3.0x).

• Capital expenditure was £366m, with 57% on essential asset replacement and 11% on Project Future.

Outlook and guidance

• The group expects a material reduction in EBITDA and a modest increase in leverage in the near term as it invests in price to regain market share, with recovery anticipated as market share improves.

• Total free cash flow is expected to remain broadly similar to FY24, supported by working capital improvements and reduced Project Future spend.

• The UK food and non-food markets are expected to remain resilient, but macroeconomic and geopolitical uncertainties persist.