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Sales: € 1.696 Bn (+1.9% vs. +1.9% BS(e));
EBIT: € -55 M (vs. € -120 M in 1Q’19 vs. € -131 M BS(e));
Net Profit: € -143 M (vs. € -144 M in 1Q'19 vs. € -181 M BS(e)).
The 1Q’20 results came in slightly better on the operating level after the completion of the first phase of the Transformation Plan, which has been based on significant streamlining of stores (via closing or selling) and on the new commercial approach. This translates into lower restructuring costs (vs. € -65 M in 1Q’19) and € 1.8 M of adjusted EBITDA on the Iberian peninsula (vs. € -0.8 M for the group), the group’s main region (~75% of sales). This figure is in positive territory, despite the negative impact from Covid-19 on costs (not quantified).
In any event, the most noteworthy aspect has been the more specific quantification of targets, where the company expects LfL growth of +5%/+7% in 2021-23e up to sales of €~9 Bn in 2023 and an adjusted EBITDA margin of 5%/6% (vs. 2.5%/3% in 2021e). This will come with higher capex levels as the period progresses, and without positive free cash flow generation until 2022 (stable debt).
Lastly, we would like to point out that the indications given by DIA in the conference suggest that the recovery in LfL sales seen thus far (despite being favoured by the Covid-19 effect; no numbers have given) continued in April and up to now in May.
In short, we believe that the company has performed well on the quarter, which was expected to some extent, given that the company has had much room for improvement since 2019, and which would back DIA’s medium-term targets. In any case, we believe that these targets are demanding in light of the current strong competition levels, which might even intensify over the coming months. If we accepted these targets as valid, our T.P. would stand at levels of €~0.10/sh., which is more than priced into the stock, whose trading levels have multiplied by ~3x from March lows. However, as we have already mentioned, we believe this is an ambitious target. SELL. T.P. Under Revision.
DIA: 1Q’20 RESULTS (ANÃLISIS BANCO SABADELL)
1Q'20 vs. 1Q'19 Results:Sales: € 1.696 Bn (+1.9% vs. +1.9% BS(e));
EBIT: € -55 M (vs. € -120 M in 1Q’19 vs. € -131 M BS(e));
Net Profit: € -143 M (vs. € -144 M in 1Q'19 vs. € -181 M BS(e)).
The 1Q’20 results came in slightly better on the operating level after the completion of the first phase of the Transformation Plan, which has been based on significant streamlining of stores (via closing or selling) and on the new commercial approach. This translates into lower restructuring costs (vs. € -65 M in 1Q’19) and € 1.8 M of adjusted EBITDA on the Iberian peninsula (vs. € -0.8 M for the group), the group’s main region (~75% of sales). This figure is in positive territory, despite the negative impact from Covid-19 on costs (not quantified).
In any event, the most noteworthy aspect has been the more specific quantification of targets, where the company expects LfL growth of +5%/+7% in 2021-23e up to sales of €~9 Bn in 2023 and an adjusted EBITDA margin of 5%/6% (vs. 2.5%/3% in 2021e). This will come with higher capex levels as the period progresses, and without positive free cash flow generation until 2022 (stable debt).
Lastly, we would like to point out that the indications given by DIA in the conference suggest that the recovery in LfL sales seen thus far (despite being favoured by the Covid-19 effect; no numbers have given) continued in April and up to now in May.
In short, we believe that the company has performed well on the quarter, which was expected to some extent, given that the company has had much room for improvement since 2019, and which would back DIA’s medium-term targets. In any case, we believe that these targets are demanding in light of the current strong competition levels, which might even intensify over the coming months. If we accepted these targets as valid, our T.P. would stand at levels of €~0.10/sh., which is more than priced into the stock, whose trading levels have multiplied by ~3x from March lows. However, as we have already mentioned, we believe this is an ambitious target. SELL. T.P. Under Revision.
Underlying
DISTRIBUIDORA INTERNACIONAL DE ALIMENTACION SA
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Sabadell
Arancha Pineiro
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