Eurocash (EUR) Q4 2023 earnings summary

Executive summary

• FY2023 sales rose 5.2% to PLN 32,331m; EBITDA increased 6.5% to PLN 1,066m under IFRS 16, while pre-IFRS 16 EBITDA reached PLN 587m.

• Net profit increased 62% to PLN 145m, operating cash flow rose 28% to PLN 1,139m, and pre-IFRS 16 net debt/EBITDA fell below 0.7x.

• Fourth-quarter EBITDA increased 5.8% to PLN 326m despite PLN 15.1m of non-recurring restructuring costs.

Financial highlights

• FY2023 consolidated sales increased 5.2% to PLN 32,331m; EBITDA grew 6.5% to PLN 1,066m, while sales margin declined 0.3pp and SG&A fell 0.4pp of revenue.

• Net profit reached PLN 145m versus PLN 89m in FY2022, up 62%; operating cash flow rose PLN 250m YoY to PLN 1,139m.

• 4Q2023 EBITDA rose 5.8% to PLN 326m; EBITDA margin increased to 4.1% from 3.8%, despite PLN 15.1m of non-recurring restructuring costs.

• Preliminary 1Q2024 sales were flat at PLN 7,590m; EBITDA declined 9.6% to PLN 150m before PLN 11m of non-recurring restructuring costs, and was PLN 139m including those costs.

Outlook and guidance

• PLN 211m of 2024 savings initiatives were identified to offset the estimated PLN 210m impact of minimum-wage increases.

• The 2024 FTE plan targets PLN 108m of savings; 959 of 1,152 planned FTE reductions/productivity measures were implemented, with PLN 104m run-rate impact.

• Wholesale integration targets PLN 55m of 2024 gross savings from head-office and logistics integration, plus PLN 156m further cost optimization and PLN 100m of cross-sell sales.

• 1Q2024 sales growth was 5% LFL at Delikatesy Centrum, 20% at Frisco and over 32% at Duży Ben.