Eurocash (EUR) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales declined by 0.9% year-over-year to PLN 8.5bn, reflecting weak market dynamics and a 4% drop in small-format sales.

• EBITDA margin fell by 0.7 percentage points to 2.9%, mainly due to lower gross margin and cost inflation.

• Net profit in Q3 2024 was PLN 14.8m, down 65.9% year-over-year; for 9M 2024, the Group posted a net loss of PLN 72.4m.

• Market headwinds included weak consumer behavior, deflation in sales, inflation in costs, and intense price competition from discounters.

• Management board changes included the appointment of Piotr Nowjalis as CFO and other executive transitions.

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; EBITDA margin at 2.9% (down 0.7 p.p.).

• Operating profit (EBIT) for Q3 2024 was PLN 83.0m, down 41.6% year-over-year; EBIT margin at 1.0%.

• Net profit for Q3 2024 was PLN 14.8m, with a net margin of 0.2%.

• Dividend of PLN 0.72 per share (PLN 100.2m total) to be paid in November 2024 from 2023 profit.

Outlook and guidance

• Guidance for PLN 1 billion EBITDA in 2025 has been withdrawn due to market uncertainties and macro headwinds.

• No new forecasts will be provided for 2024 or 2025 until there is more visibility on market conditions.

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

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

• The Group expects continued cost pressures from wage increases and inflation, with macroeconomic risks monitored closely.