Eurocash (EUR) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales declined by 0.9% year-over-year to PLN 8.5bn, reflecting weak consumer demand, cost inflation, and market headwinds.

• EBITDA margin fell by 0.7 percentage points to 2.9%, with net profit dropping 65.9% year-over-year to PLN 14.8m; net profit margin at 0.2%.

• The Group posted a net loss of PLN 72.4m for 9M 2024, compared to a profit of PLN 44.3m in 9M 2023.

• Management transition: CFO Jacek Owczarek was succeeded by Piotr Nowjalis; other board changes occurred in Q3/Q4 2024.

• Cost-efficiency programs and restructuring efforts continued to offset wage increases and support financial stability.

Financial highlights

• Revenue for Q3 2024 was PLN 8,491.2m, down 0.9% year-over-year; gross profit was PLN 1,096.7m, down 4.5% year-over-year.

• EBITDA for Q3 2024 was PLN 243.5m, down 20.2% year-over-year; EBIT was PLN 83.0m, down 41.6% year-over-year.

• Net profit for Q3 2024 was PLN 14.8m, about PLN 30m lower than last year; net profit margin at 0.2%.

• Net debt at Q3 2024 end was PLN 2.5bn; net debt/EBITDA ratio was 0.85 (pre-IFRS16) and 2.66 (post-IFRS16), both below target.

• Cash conversion cycle improved by 2 days year-over-year, with strong cash flow generation.

Outlook and guidance

• The company withdrew its PLN 1 billion EBITDA guidance for next year and will not provide new forecasts for 2024 or 2025 due to market uncertainty.

• Focus remains on cost optimization, integration of wholesale formats, and selective investment in growth projects.

• Management expects 2025 to be less challenging than 2024, with lower cost inflation and rent increases.