Edited Transcript of EUR.WA earnings conference call or presentation 25-Aug-20 1:00pm GMT

Aug 29, 2020 (Thomson StreetEvents) — Edited Transcript of Eurocash SA earnings conference call or

Aug 29, 2020 (Thomson StreetEvents) — Edited Transcript of Eurocash SA earnings conference call or presentation Tuesday, August 25, 2020 at 1:00:00pm GMT

Eurocash S.A. – Financial Director & Member of the Management Board

Eurocash S.A. – CEO & President of the Management Board

Eurocash S.A. – IR Director

Eurocash S.A. – Member of Management Board

Magdalena Kupiec, Eurocash S.A. – IR Director [1]

Good afternoon. Welcome to Eurocash S.A. Financial Results Presentation. We are very happy to have you all with us today.

And before I’m going to pass over to Luis Amaral, I’m going to (inaudible) (Operator Instructions)

Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [2]

Yes. Hello. Good afternoon. As you saw, we published yesterday night results, and now we try to present to you how the business is going. It’s obvious for all the players that (inaudible) year because COVID. We’ve had a bunch of challenges in the market. Thanks to (inaudible)of the business that’s still at the business. Some other people are not like it. And our business, I’ve said, have been quite resilient.

If you look at the group size, even if affected somehow by COVID because some of our businesses lost a lot like the (inaudible) business, in general, or even continue, our sales are 2% year-on-year, up, in the total business. We present PLN 337 million of EBITDA IFRS 16, which will be about PLN 150 million before IFRS 16, which is basically the same result than 1 year ago.

On Wholesale, we have been focused on the digital transformation. As you know, we’ve merged with (inaudible), so Eurocash Alkohole with general cash distribution, general cash distribution with very good penetration of eurocash.pl, and we have been making a big effort now to do the same thing on the (inaudible). In general, business is going quite stable, independent of what is happening. So the sales are (inaudible) last year and EBITDA slightly over last year. On Cash&Carry, we had 4% like-for-like.

On the Retail, and I take advantage to introduce my colleague, Noel. Noel joined us almost 1 year ago. And first, he was in training. After, he started operations which was stopped by COVID at the beginning of his operations. And as soon as I finish, he’s going to introduce himself for all of you to know where Noel comes from and why he’s with us. So in Retail, sales were up 5%, EBITDA, 2.5%, and the like-for-like at the Delikatesy still rose 5.6% (sic) [5.9%].

Projects. Duzy Ben is expanding quite fast. It was less affected by all the situation as now 93 — we’ll have 93 stores at the end of the year — at the end of the first half of the year. Kontigo was more affected because the stores are on the shopping centers. Even if (inaudible) partner decides where the (inaudible) during the COVID time to online, obviously, still, the shopping center’s traffic is still very below what was before and like-for-likes are now noticeably lower than last year. While in 2019, we were quite good.

Just speaking in the Wholesale side, as we said, the main effort has been digitalization. Digitalization takes different formats. We have been doing the launch of Eurocash marketplace, where the idea is to give a full assortment to our clients in order for them so they don’t have any limitations when they sell to clients. So assortment for a small store can be hundreds of thousands, not thousands as it is today. Eurocash POS, it’s the new project which will try to integrate the data, sell-out from our clients, mainly from the franchisees, to create the database which will see everything we’ll do in eurocash.pl and to make all our promotions much more consumer focused using the independent trade. But the other side, working with — on the Eurocash, Cash&Carry, we launched the app. The app is to facilitate the way you do shopping the Cash&Carry and is also going to be integrated on eurocash.pl

On the online side, as been — we have been working a lot with Delikatesy. Delikatesy has now 400,000 users and is, more or less, responsible for 50% of sales of Delikatesy Centrum. So it is a tool which was launched around 2 years ago. It’s quite — it’s been quite important and is growing the importance a lot. And as you know, we acquired the Frisco. 100%, we invested in Frisco in 2014, and we have been working together with MCI, and now we bought their part. Frisco was one of the business which was positively affected by COVID. The sales basically doubled year-on-year, and the company is now very near breakeven.

So I will say now just pass the word to Noel to introduce himself, and now we’ll hear from Noel.

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Noel Collett, Eurocash S.A. – Member of Management Board [3]

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Yes. Thank you, Luis. So good afternoon. And by way of background, if I start my career. I have 22 years in retail, 18 years of which is on the management board level. That’s across 2 companies. And the majority of that time, in fact, 17 years of that time was spent at the — some of that time was in Germany, but most of that time is in the U.K. And whilst in the U.K., 13 years under the group Board, overseeing the rapid expansion of the distribution chain within Great Britain.

And to put some context to this journey that we run on those 13 years and thank some of those achievements, this has taken the business from just under 200 stores to over 600 stores. And in terms of sales, this was approximately GBP 700 million, and it leads to GBP 4.5 billion in this time frame. And this, together, was building the whole infrastructure, including logistics, and the operational platform to facilitate this growth.

So after 17 years, I decided to step down whilst approaching the (inaudible) and decided for a change and moved to a small entrepreneurial business, Crawshaws, and where I’ve spent 3 years. And in 3 years, this business was really a similar story of growth but from a much smaller starting point. So this was a business that was selling over circa GBP 24 million. And in those 3 years, we grew it to GBP 50 million. And it’s a freshly high-street shop, together with some wholesale business as well.

So that’s my career [story] up until Crawshaws. As Luis mentioned, I joined 1 year ago. The first 6 months, so towards last year, was really an overwhelming process, understanding the business, the whole of the business but specifically the Retail business as well as the retail landscape here in Poland and then really getting under the covers of all the work that’s happening with the integration. And last year, particularly taking us at the beginning of this year where the technical infrastructure and organizational integration was completed at the beginning of this year. And at the beginning of this year, I was able to take full responsibility of the Retail business. And in that time frame, over the last 6 months, we’ve been, let’s say, extremely busy in building our retail experience and continuing with our consolidation and integration, but importantly, from my perspective, the unification of our — the 3 (inaudible) businesses (inaudible). So that unification is where we are to date, and that will continue for the foreseeable future, particularly for the rest of this year, but also going on to the next.

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Jacek Owczarek, Eurocash S.A. – Financial Director & Member of the Management Board [4]

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Okay. So let’s come back to our presentation of financial results. As usual, we start with the macro economy introduction. As we know we are in the middle of the COVID pandemic (inaudible) that we are (inaudible) certain economical environment. However, what was observed because we already after the complication of the results for the Q2, the productivity went down lower than expected impact, so 8.2%. And the same was almost very (inaudible) with retail sales drop of 10.7%, exactly at the same time in Q2. So generally speaking, (inaudible) more the (inaudible) more to you 10 or detail rather than — in the recession. But of course, we need to be careful and wait whether we’ll face the second phase of pandemic. At the same time, on the other hand, the inflation in Poland is one of the highest in Europe, and it’s growing quite constantly.

If you are looking at the macro environment from the perspective of the stores on the top of the slide (inaudible) which is showing the dynamics of the different segments of the market. Generally speaking, as you can see, first half of the year in 2019 last year was quite a normal spread like in past. So on one hand, because still hypermarkets are giving the market shares to other segments and at the same time growing discounters and supermarket and also the — our addressable market, which is small format.

If you are a looking from the right-hand side at the top, you can see that, generally speaking, it’s growing in the main segments of convenience stores, which are usually in our regular clients in [fashion retail] and also small supermarkets. At the same time, of course, there’s a constant pressure, which is not appearing this time, but we can observe it for a while on the small stores below (inaudible) and I think what is the new phenomenon in Q2, also, I think I come back to this, and we’ll discuss the impact of COVID on the sales of Q2, is the fact that specialized stores went down first half of the year and probably mostly relating (inaudible)

At the bottom of the graph, we are trying to show you the trend here based on CMR data, which is measuring the number of transactions, the number — value of the basket and the number of items in the basket. On the stores between 0 to 500 square meters, as you can see at the beginning of pandemic, which was end of Q1 and beginning of Q2, we had a very dramatic drop in the number of stores in our segment as well because of certain (inaudible) segments. And at the same time, the value of the basket was growing quite rapidly. Right now, the value of the basket is coming more in the direction of pre-pandemic time. And then the (inaudible) relating to the number of (inaudible). Of course, we have some seasonality effect here, so we cannot compare like 1:1, but with the general numbers, I think the message is that we see here some inflation.

Let me go segment by segment. So we start with the wholesale. And the wholesale segment was mentioned by Luis on the digitalization part. We are recording very nice growth of sales. We are (inaudible). In the first half of the year, we are selling to this platform at PLN 2.1 billion, which is a significant growth from the last year and also a number of the clients being from 10,000 to almost 15,000 as of now. At the same time, at the bottom of the slide, you can see that the application, which is possibly payment phase of Eurocash S.A., is also growing quite nicely and steadily. So that aspect of convenience, which we are biting on, I think it’s more and more visible. In Cash&Carry, we kept — although the slowdown of — business and petrol stations, for example, but mostly for a time in terms of Cash&Carry. We had positive like-for-likes, even in Q2.

And all of this transforming to the economy results, growth of the sales in the first half of this year, it’s 0.3%. And at the same time, our EBITDA was growing from PLN 180 million to PLN 192 million before IFRS and from PLN 289 million (sic) [PLN 269 million] to PLN 277 million after IFRS.

If you would like to (inaudible) sales, the facts are following. We are growing in all segments, except for the (inaudible) business, which is the most affected type of company. And also in the second half, we composed the same graph, you would see that we had some drops of sales in tobacco business, which is connected mostly with the petrol stations at our (inaudible) accounts, for example, the operators of airports and (inaudible). Also, it’s maybe worth to mention that in the second half and the first half, which — indirect effect of Orlen, which is (inaudible) last year, so still on a comparable basis is — it’s included in base.

Let’s go into Retail results right now. As Noel was mentioning, the fact is that, right now, we are working as a one company, which we reported to you in the past. And more and more, it’s less dramatic change like we did with the IT systems, for example, of particular organization and — and tenor. But whether it’s more execution and focus for the coming quarters. All of this is translating into very nice results on the Delikatesy, which we mentioned as well, that the total users, we have 1.9 million as of June 2020, and mobile app users is 400,000. So you have some growth rates here on the slide. I think it’s also quite nice from our perspective. At the same time, we are trying to introduce, and right now, we are testing the Click&Collect program in all our stores. And from like-to-like perspective, the second quarter was quite steady, and the growth was 1.1%.

Talking to the results. (inaudible) we have in the segment 1 (inaudible), if you wish, the performer which is Inmedio. As part of you know, this is the kiosks which are located mostly in the shopping malls. That is the fact that we have know that (inaudible) and even to take the number of the visitors in the shopping malls, it’s lower than before pandemic. So of course, we are reporting here the lack of sales in comparison with last year. And also, you will see the [30%] (inaudible). And at the same time, the drop in franchise business and then the own stores was exactly the (inaudible). As you can see, the total segment grew 5%, and EBITDA grew after IFRS from PLN 138 million to PLN 141 million before IFRS. It was quite stable year-on-year.

One maybe (inaudible) was mentioned by Luis as well before, so are we not going to (inaudible) is that, on Thursday, we are opening hundreds of (inaudible) the project is progressing quite fast. So annual view (inaudible) country to visit our structure. We will have some activity in terms of prices. And the project is really on good track for the rate (inaudible) hopefully will be able to report to us shortly of the fact.

(inaudible) of projects (inaudible) is a small number in comparison with the rest of the group but very nice growth rates, mostly in Duzy Ben and partly in Kontigo, which is online (inaudible) here in off-line stores and also very nice growth rates in ABC on wheels. Still the investment in this segment, it’s under control, as we said before, and we are not just in the previous estimations here.

All of this translates into the consolidated financial results. The growth of sales was 2%, reaching PLN 12 billion — more than PLN 12 billion. And at the same time, the result was quite stable, as I said before, and was PLN 160 million before IFRS impact and PLN 150 million right now. And after IFRS, the PLN 337 million in comparison with PLN 336 million this year. Maybe it’s worth to mention that in this result, we had around PLN 17 million of cost, maybe part of you remembers that for the first quarter, we had PLN 10 million reported and right now about PLN 7 million.

Let’s go over to the cash flow in the next slide. The cash flow conversion cycle is quite stable. As you can see, it’s around 25. And (inaudible) long time in all quarters. Sometimes, it’s a little bit better (inaudible) depending on the seasonality between different components of the working capital. And if you are looking into the cash flow itself, it’s worth to mention like we said that we acquired Frisco (inaudible) in Frisco, the amount of the acquisition was PLN 134 million. And at the same time, we are buying second biggest franchisees in Delikatesy Centrum, and the value of the transaction was PLN 25 million. So all together, it’s probably the 2 biggest items in our cash flow. And I’d like to also add here one more remark that even during the pandemic, we are able to refinance our balance sheet. And maybe part of you remembers that the maturities were due in September this year during the — to last June. We fully refinanced financial constraint, not balance maturities so 3 and 4 years, it gives us some confidence.

And that growth is mostly connected to the acquisitions, as I said before. And maybe the last very technical remark for those of you who are doing some analysis reports regarding [us], the fact is that we start to consolidate the balance sheet of — we started to consolidate balance sheet of Frisco at the end of June, and we’ll start to consolidate income statement of Frisco from the third quarter. So in the third quarter for the first time, you will see it as a part of [project].

Thank you very much. And as much as I can right now, please ask whatever question you would like to have to ask on the chat and we’ll just read them and answer, and we’ll then go the next questions.

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Questions and Answers

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Magdalena Kupiec, Eurocash S.A. – IR Director [1]

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So with that, the first question on chat? What is needed to increase the profitability of retail?

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Noel Collett, Eurocash S.A. – Member of Management Board [2]

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So let me — I’ll take this question. The first thing that’s needed is the work we’re doing on the unification and the consolidation. So that means a unification of the teams and the people to develop our culture and our way of work. It also a means to unifying our consumer proposition in terms of the work we’ve got to do with assortment. We’ve finished the price and promotional policy and the work that we’ve got to do on assortment is going to further enhance that — enhance that capability. And this work is happening as we speak now and will be the main heavy lifting work over the next 6 to 12 months. So we will be able to update for the next year because we’re in the process of putting these plans together, and the management board will be starting off the updated plan and strategy in November this year.

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Magdalena Kupiec, Eurocash S.A. – IR Director [3]

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That’s just the one question. We are waiting from another one. (Operator Instructions).

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Jacek Owczarek, Eurocash S.A. – Financial Director & Member of the Management Board [4]

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While we’re waiting, maybe we can ask you as well, for some type of feedback. As you can see, we changed a little it, the form of our presentation. Instead of having the conference call, we went into video conferencing. It has probably pluses and minuses. So even if not now, we would really appreciate your comments regarding the format of the presentation as we would like to see it for future. So the feedback is really welcome [to ensure].

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Noel Collett, Eurocash S.A. – Member of Management Board [5]

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(inaudible)

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [6]

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Yes. So meanwhile, just to reinforce that what’s the objective of Eurocash Group and that we have been working in the last few years is to first of all is (inaudible) to be sure that our clients are more efficient, and they have different tools to compete with the so-called modern threat. So the digitalization, which I think is moving quite fast and in different fronts, it will be the key for the success of — the wholesale business keeps being very stable, keeps growing, but to have — to give a [profitability] jump, we need to reinforce even more on eurocash.pl. We need to integrate with the POS project and with the Eurocash marketplace.

So these are our main strategic objectives, which we’ll be working. We started some of them 2 years ago, some of them 1 year ago and some from this year. But at the end of all, we will integrate in the proposal, which will be quite different from many wholesaler within Europe and this is the work. I say we are focused in the next 2 years to come is to have a completely digital offer in the wholesale side.

On the retail, as Noel said, we’ve made a lot of work this year integrating the 2 businesses. And now we are mainly working on consumer proposition, what we are proposing from our stores. And we are second biggest chain in number of stores, and we believe that there is a lot of space to grow as soon as you have a solid base with what we wave today.

Frisco, we are working on online strategy. We are quite happy with the acquisition, and we are thinking all this expansion will be done within the next few years. And we expect also in November, to approve approval the business plans. In the case of Frisco and retail for the next 3 years, to approve out with the expansion of Frisco, but it’s more or less decided that we go ahead with. Today, we have more than 50% market share in Warsaw, which is obviously very impressive, but the problem now or the opportunity now is as we’ll go to other cities, and that’s what we will be working until to November on this. Any other questions?

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Magdalena Kupiec, Eurocash S.A. – IR Director [7]

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Yes, we have a second question in the chat. Just comment the current situation of the business in light of COVID. How is the situation?

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Jacek Owczarek, Eurocash S.A. – Financial Director & Member of the Management Board [8]

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So what we see is obviously, a stabilization of the business compared with the previous. July and August, obviously depends a lot on weather on our side of the business because we are very big in soft drinks and beer. So I said the business is returning to normal and is being reflected just of different weather. When weather is better, sales are better. Weather is worse, sales are worse, but it’s, I’d say, business as usual. Things are starting to normalize, and we feel this normalization.

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Magdalena Kupiec, Eurocash S.A. – IR Director [9]

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Okay. Next question, what was the main drivers from the lag between [DC] retail like-for-like and then on wholesale?

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [10]

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In retail and wholesale, in reality, not so much. They’re not so much connected. Obviously, they operate in the same markets but wholesale, they operate in many different businesses from Cash & Carry to the tobacco business. So the wholesale, I’d say, more complex in terms of this [distracter]. And obviously, it depends a lot on the development of traditional trade and independent trade, and after we fight for market share within this market.

Retail has been a year of organization, and we have been focused much more in putting the things in place, and that has been the main effort. So I would say they are not so much connected. They work in the same markets, but then they work after completely different streams. Ones are basically trying to do more efficient and running the business as always and the other ones are creating the values for our business that can grow in the future.

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Magdalena Kupiec, Eurocash S.A. – IR Director [11]

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Next question, could you please give us more color on the type of [pace of] recovery to second quarter. I would assume April was much down than in May, June as well as [30%] in Q2 so far. Second part of the question is related so answer the first one.

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Jacek Owczarek, Eurocash S.A. – Financial Director & Member of the Management Board [12]

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So we have to say each of the months were very different. I will say that April and May each of the week was very different. Things were changing, the rules were changing all the time, so since, well, pretty unstable. We’re controlling everything daily. We’re involved with every daily meetings to see what was the situation, what changed and what we are good at. And until third week of May, this all starts and what happened? So it depend a lot on [every] exterior or if people have to queue in stores, if they don’t have to queue. People are afraid of going out and roam. If people were near, people going farther. And there are so many different impacts that is quite difficult to measure. I would say, Easter, we felt the peak point. Our Easter was more or less like the previous year, which was also quite a surprise. We’re expecting the worst Easter, which we didn’t see. In June, things start to normalize and was mainly weather connected and any other thing. And we didn’t feel any more pressure from COVID during the month of June. So life started to be normal.

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Magdalena Kupiec, Eurocash S.A. – IR Director [13]

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Okay. The next question, a question for Noel. How do you see combinations of retail and wholesale, including franchise chains under one roof?

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Noel Collett, Eurocash S.A. – Member of Management Board [14]

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Well, we see it as a retail business as the franchisees are retailers as much as the other stores. They’re retailers as well. So we’re creating our retail business, not so much on this combining with wholesale or like [a mix of] wholesale. That’s the — I think the really key point from our side. And we’re building all the infrastructure and the people and being really focused on the Delikatesy Centrum plan, the consumer proposition and the consumer behavior. So I see there have been some synergies and benefits and best practices as well because the nature of the franchisees with entrepreneurial flair, and the way that they really are close to their consumers. There’s a lot that we will learn in the more structured and [independent] stores. But conversely, within own stores, there’s some discipline and structure and organization that the franchisees in the future would also benefit. So the focus is not really looking at combinations or integration with wholesale. It’s creating our retail business through retail lens and for end consumer.

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Magdalena Kupiec, Eurocash S.A. – IR Director [15]

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Okay. And the next question is about Frisco. What should be the Frisco contribution to sales and EBITDA this year?

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [16]

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And I would say that the — still this year at Frisco, it’s more or less [half] in terms of sales. And EBITDA, if you look at the (presentation), it’s a small business. It’s a business in Warsaw. It’s on breakeven at this moment at EBITDA level, which is very good news. And I would say that we have [COVID plan] because we just had opened a new distribution center, which was supposed to give us volume capacity until 2022 and suddenly, sales doubled. So we achieved almost full capacity at this center in Warsaw. The discussion with Frisco is not what represents this year. I’d say in sales, it’s probably PLN 200 million or something like this. And in EBITDA should be revenue of 0. What is relevant is what we are going to do in Frisco in terms of future. And that I said, we are now, we do the management of Frisco, designing the strategy. But clearly, we see this is 1 business that we should develop. We believe on retail online, and we are the best assets in the country by far. I said it’s not by accident that we have over 50% market share in Warsaw and that shows the potential we have in these markets, and we’ll be investing on this market.

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Magdalena Kupiec, Eurocash S.A. – IR Director [17]

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Okay. So next question regarding retail, when should we expect acceleration in retail chain expansion in 2021?

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Noel Collett, Eurocash S.A. – Member of Management Board [18]

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Well, we — so far the status at the half was we opened 17 stores. Those 17 stores were all in Q1. And of course, in Q2, this was entirely disrupted with COVID. So the situation we are in now is, first of all, we had a pause, a natural pause as we were physically unable to open these stores, and now we paid that back up in a post-COVID environment where we already recommenced with our opening of new stores. We are evaluating the current pipeline, which has continued to grow even during the COVID time. So from our perspective, we’re pleased with the pipeline growth with expansion. And the pipeline in stores that we have available to us, now we’re just evaluating how many will fall into this year and how many will come into next year. And how much — how many stores will kind of [visibly] next year. So this update, we will be able to provide in the next half of results.

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Magdalena Kupiec, Eurocash S.A. – IR Director [19]

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Okay. So the question what is the like-for-like [with regards to] inflation?

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [20]

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Okay. First is not to [deflesh] in that market, even if they’re below anyway, Markets-specific inflation at the categories where we operate more. As you know, independent trade on the case of the wholesale is a very specific mix. We are much more on the drink side than on the food side. So far as the most important is the inflation on soft drinks, beer and vodka. This is kind of 50% of sales, [to be about] seems to be more than 50% of sales of the independent trade. So anyway, we are slightly below this. And this has to do also not business unit by business unit, but on wholesale side as we saw, we — in the top of wholesale, we lost about PLN 450 million, which is up by 5% of sales in [seeing exterior] to the business was the volume contract and was directly because of COVID. If you include this, we are half the online. So you don’t see we lost the market share.

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Magdalena Kupiec, Eurocash S.A. – IR Director [21]

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So next question, do you see any market change in the level of competition in the city in the retail and wholesale segments?

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [22]

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So for retail, you can start.

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Noel Collett, Eurocash S.A. – Member of Management Board [23]

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Yes. I think given what we would discuss regarding the [macro type of] environment, is that price is going to become important. Selling in a post-COVID or during the COVID time, food safety, food quality has really become — and health and home cooking has become really top of people’s agenda. But of course, as we transition further away from this environment into what is a possible recession and we see how this plays out, but price is going to become an important part both for the consumer. And as we would expect, that will pay off in the competitive landscape as well. So I don’t think, from our perspective, that any of the competition have been sleeping in the last 6 months, even pre-COVID. So we would consider it to be, so from a price perspective, to be competitive as it has always been and will continue to be.

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [24]

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In Warsaw, obviously, we have a very big market share. So wherever you go, someone has to decline. We’re still not sure if the effect of COVID had on the balance sheet of some of the competitors. But most important for us is the digitalization process, which we are clear advanced in comparison to anyone else, which will give us competitive advantages, and we’ve been given competitive advantage in the last few years. So we believe we have strong competitors. Even when they are not so big, they are strong. They are very aggressive. Our advantage has been in terms of the processes and way of working and digitalization of the processes, we have been quite advanced compared with anyone else, I would say, even to the outside of Poland.

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Magdalena Kupiec, Eurocash S.A. – IR Director [25]

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There are no more further questions (Operator Instructions).

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Jacek Owczarek, Eurocash S.A. – Financial Director & Member of the Management Board [26]

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So just to finish, obvious, all of us, I think, investors and operators who are very nervous to the impact of COVID, I will say now even if the problem didn’t finish, even if there be — can be the second wave, and if there would be some confusion between flu and COVID from October, which will create some panic, we feel more or less relaxed that the worst is behind us and in effect [don’t have a] fundamental thing in our business. So we’re also excited to keep growing, keep doing their budgets, keep growing the business — managing the business normal with much more stress, with much more unknown. But at the end, it’s behind us, and we don’t feel that affect us in a dramatic way as unfortunately some businesses were affected. So we are ready for our second semester, which I say will be very near business as usual.

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Magdalena Kupiec, Eurocash S.A. – IR Director [27]

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So we have one more question. Do you see any pressure from your suppliers in the business at this time of pandemic?

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [28]

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I would say that the business is becoming normal. During COVID there were some situations but in general, I felt suppliers are quite supportive, and everyone is working with the same objective. In the company, we are very clear that our first objective and before our results is to be sure that food gets to the tables of Polish people and that our clients have a good level of service. During pandemic, our NPS even went up. We measured NPS weekly in all the businesses. And with that, most of the businesses. So I say that whilst there was no big stressors, there was cooperation between us and suppliers. Obviously now, some people will have a weaker position. They have more impressive results or less impressive results, but it’s business as usual. I don’t feel it’s going to get very stressed compared to other years.

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Magdalena Kupiec, Eurocash S.A. – IR Director [29]

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So we don’t have any further questions, so I think that concludes our presentation. If you would like to — any other further question for that, please contact me. My contact is on the website, also my e-mail and I will answer all your concerns. Thank you.

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Jacek Owczarek, Eurocash S.A. – Financial Director & Member of the Management Board [30]

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Thank you very much for your time. I hope we gave the answer that you needed.

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Noel Collett, Eurocash S.A. – Member of Management Board [31]

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Thank you.

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Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [32]

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All the best. Bye-bye.

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