Eurocash (EUR) Q2 2024 earnings summary

Executive summary

• H1 2024 sales declined by 1.1% year-over-year, impacted by deflation, cost inflation, and weak consumer sentiment in a highly competitive market.

• EBITDA fell 16% to PLN 364.8m, with EBITDA margin dropping by 0.3–0.4 percentage points; net loss was PLN 87.2m compared to a net profit in H1 2023.

• Cost optimization and efficiency measures are ongoing, with financial stability maintained and debt to EBITDA well below 1 in some reports.

• Growth platforms Frisco and Duży Ben delivered strong sales growth of 21% and 24% respectively, partially offsetting declines in core segments.

• Dividend of PLN 0.72 per share to be paid in November 2024.

Financial highlights

• H1 2024 group sales were PLN 15,792.1m, down 1.1% year-over-year; Q2 2024 sales fell 2.5% year-over-year.

• EBITDA for H1 2024 was PLN 364.8m, down 16%; adjusted EBITDA decreased by 10.6% year-over-year.

• EBITDA margin declined by 0.3–0.4 percentage points to 2.3–2.5%, less than competitors.

• Non-recurring costs in H1 2024 included PLN 15–15.2m for employment restructuring and PLN 8–8.2m for Frisco warehouse ramp-up.

• Net loss for H1 2024 was PLN 87.2m; operating cash flow was PLN 331.6m.

Outlook and guidance

• No formal guidance for H2 2024 due to market uncertainty and ongoing price war.

• Management expects seasonal improvement in Q3 but remains cautious on consumer recovery.

• Focus remains on cost control, price competitiveness, and investment in growth platforms.

• Strategic review process ongoing, including potential new investors, reorganization, or asset divestment.