Gross sales under the DIA Group brand in Portugal reached €430,6 million in the first half of the year, 5,7% more than in the same period of 2019. On a like-for-like basis, the growth was 9,3%.
In net terms, sales at Minipreço and Clarel in the Portuguese market increased by 6,4%, a performance that the retail group attributes to local transformation measures, which include more frequent stock deliveries to consolidate the increased supply of fresh products, and ongoing store renovations.
Adjusted EBITDA increased by 90 basis points, thanks to the implementation of " operational excellence measures ".
Transformation plan
Indeed, during the first half of the year, the group continued with its transformation plan, prioritizing the development of its commercial value proposition, the offering of its own brand and online sales, as well as improvements to the DIA franchise model and the maintenance of operational efficiencies.
In Portugal, these measures resulted in the completion of renovations in 125 stores to facilitate the optimization of the product range, the official launch of Minipreço's e-commerce operation , the appointment of a new franchise director in the second quarter, and the implementation of the new model and a six-day-a-week delivery frequency in 80% of the store network to consolidate the increased supply of fresh products.
Overall business improvement
The implementation of these types of measures, in the various markets where the group is represented, has resulted in an overall improvement in the business. In the second quarter, the group reported positive growth in sales figures and adjusted EBITDA, thanks to the effective response to the Covid-19 crisis and the initial results of the transformation initiatives implemented, which were maintained after the lockdown. According to DIA, the financial position was strengthened in the first half of the year, with an improvement in working capital, the creation of positive cash flow, and a reduction in net debt.
In numerical terms, net sales reached €1.819 million in the second quarter, 6,3% more than in the same period of the previous year. On a comparable basis, growth was 14,9%, with all markets positive for the first time since the fourth quarter of 2016, driven by an increase in the average shopping basket, which offset the decrease in the number of tickets. Losses were reduced to €45 million, compared to losses of €267 million in the second quarter of 2019. “ The second quarter financial results demonstrate the positive impact of the response adopted to the Covid-19 situation and the business transformation we were already undertaking. Customers are responding to our attractive proximity offer and our new online sales capabilities, and the positive like-for-like sales figures for June and July, after the lockdown, are a good indicator of this progress. We controlled costs in the face of increased demands across the sector regarding protection measures and staffing levels, thanks to efficiency decisions adopted in 2019, while key financial indicators, such as improved working capital and positive cash flows, have moved in the right direction.”
Regarding the future, we will continue to implement, in the second half of the year, transformation initiatives included in the strategic plan, focusing on the fundamental pillars of our franchise model and improved commercial value proposition, which are based on optimizing operational efficiency ,” says DIA's president, Stephan DuCharme.
On a half-year basis, net sales grew by 2,1% to €3,515,2 million. On a like-for-like basis, growth was 8,7%, driven by a 25,7% increase in the average basket size.
