Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Distribuidora Internacional De Alimentacion SA (XMAD:DIA, Financial) has successfully completed its turnaround process in Spain and Argentina, focusing on growth and profitability.
- The company has achieved a significant reduction in net debt by EUR 92 million compared to the first half of 2023, improving the leverage ratio to 1.1 times adjusted EBITDA.
- Dia Espana reported a like-for-like sales growth of 5.1% in the first half of 2024, outperforming market and inflation rates.
- The company's omnichannel strategy, including the online channel, has shown strong growth, with digital customers doubling compared to the first half of 2023.
- Dia Argentina has managed to gain market share despite a challenging macroeconomic environment, maintaining profitability and self-financing capabilities.
Negative Points
- The exit from Brazil resulted in a negative impact of EUR 107 million, contributing to a total group negative net result of EUR 93.5 million.
- Argentina's economic challenges, including inflation and currency devaluation, led to a negative net result of EUR 10 million for the period.
- Despite improvements, the company's stock market value does not fully reflect the operational and financial progress made.
- The reduction in the store network, particularly in Spain, has been significant, with 430 fewer stores compared to the first half of 2022.
- The company faces ongoing challenges in Argentina due to a complex macroeconomic situation, impacting consumer spending and sales.
Q & A Highlights
Q: Have you started with the process of refinancing of the debt? When are you planning to finalize it? Are there any relevant progresses that can be shared? Or are you considering a capital expansion?
A: Martin Tolcachir, CEO: The maturity of the syndicated financing is December 31, 2025. We are actively working with financial partners on the refinancing process and do not foresee any issues. We are focusing on a refinancing scenario without a capital increase, given the positive net results and cash generation.
Q: Following the strong results of the first half of the year, where do you expect the adjusted EBITDA margins to be in the second part of the year?
A: Martin Tolcachir, CEO: We do not provide forecasts, but we expect a positive trend in the second half. Key growth levers include increasing customer loyalty, frequency of visits, average basket size, and focusing on the online channel.
Q: What is the reason for Argentina's entry into losses, going from a profit of EUR 4 million to a loss of EUR 10 million?
A: Martin Tolcachir, CEO: The losses are due to a fall in activity and the devaluation effect, which is reflected under IFRS 29, explaining the negative EUR 10 million.
Q: Are you planning to change the strategy so that the value of the company in the stock market reflects the improvements you are undergoing?
A: Martin Tolcachir, CEO: We will continue to implement our roadmap and improve financial results. Additionally, we aim to enhance company visibility through better communication with analysts, investors, and financial institutions.
Q: For 2025, what amount does the company estimate for the item payments for investment intangible fixed assets?
A: Martin Tolcachir, CEO: We are designing our strategic plan, focusing on strong development in Spain and Argentina. While we cannot share specific figures now, we plan to invest in organic store expansion and IT and e-commerce.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
