Dia Group completes its business transformation and simplification process, focusing on Spain and Argentina, where it improves its Adjusted EBITDA by 45 million euros in the first half of 2024 and reduces its debt by 92 million euros.
July 30, 2024
Dia Spain achieves a net profit of 25 million euros up to June, representing an improvement of 59 million euros compared to the same period in 2023. In this semester, like-for-like sales grew by 5.1%, surpassing both inflation and the market, and Adjusted EBITDA reached 114 million euros, nearly double that of the same period in 2023.
Dia Argentina advances in market share and customer numbers despite a challenging macroeconomic context, maintaining its profitability and achieving a historic high in customer satisfaction.
At a consolidated level, Grupo Dia continued to show substantial improvement in its results, achieving a profit of 15.6 million euros and positive cash generation of 88 million euros, led by Spain.
The improvement in results, along with the sale of the businesses in Brazil, Clarel, and Portugal, has allowed the company to reduce its debt to 327 million euros, equivalent to 1.1 times the Group’s Adjusted EBITDA, placing the company in a strong position to address the refinancing process that will be undertaken later this year.
30th July 2024, Las Rozas de Madrid. Grupo Dia has completed the transformation and simplification of its business, creating two platforms for growth and profitability in Spain and Argentina, where it is now entering its growth phase towards leadership with the support of customers for its unique omnichannel proximity value proposition.
In the first half of 2024, the continued operation of Grupo Dia improved gross sales under banner (GSUB) by 73 million euros, closing the semester at 3.311 billion euros, thanks to performance in Spain that offset the effect of the devaluation of the Argentine peso. Adjusted EBITDA improved by 54% through June, reaching 128 million euros, with a margin increase of 1.6 percentage points. This performance led to a positive net result in the continued operation of 15.6 million euros and also highlights positive cash generation of 88 million euros.
The excellent results in Spain have contributed to reducing the Group’s debt, closing the semester with a net financial debt of 327 million euros, 92 million less than the previous year, and a leverage ratio of 1.1 times Adjusted EBITDA, compared to 3.1 times in 2021. In Argentina, despite the complex economic context, Dia achieved performance above its competitors, highlighting the value of our customer proposition and becoming a profitable and self-financing business.
“In the past four years, we have focused our efforts on turning the company around and simplifying the portfolio, creating two platforms for growth and profitability in Spain and Argentina. The first half of 2024 has allowed us to close this important chapter. With the turnaround process completed in Spain and Argentina, we have completed the divestment operations in Brazil and Portugal and the sale of Clarel, thus closing the business simplification process and moving towards the next phase of growth towards leadership,” said Martín Tolcachir, Global CEO of Grupo Dia. “Dia is now a solid and profitable business. This scenario allows us to focus our energy and resources on Spain and Argentina, where our unique omnichannel proximity value proposition has the approval of customers, and we see clear potential for further growth and improved results.”
Dia Spain continues its organic growth with LfL sales above the market
During the first half of the year, Dia Group’s business in Spain has continued its organic growth, with comparable sales (like-for-like) above both inflation and the market, and a net profit of 25 million euros up to June, an improvement of 59 million compared to the same period in 2023.
The positive result in Spain is the fruit of the strong business momentum during the semester, as reflected in the 5.1% increase in comparable sales compared to the same period in 2023, growing above the market and inflation. The increase in volume and the attraction of new customers have been the levers for this progress, consolidating sustained comparable sales growth over the past few years. Furthermore, with a smaller store network compared to 2021, Dia Spain has managed to increase its gross sales under banner (GSUB) during the semester.
The success of Dia’s omnichannel value proposition is reflected in the 7.3% increase in ticket numbers and the sustained increase in customer satisfaction, closing the semester with 47 points in the Net Promoter Score (NPS) index. Additionally, the focus on the online channel has enabled the company to gain more digital customers, increasing their proportion to 43% of total customers, and boosting online sales to 99 million, representing 4.7% of total net sales, 1.3 percentage points higher than in the first half of 2023.
“The effort made over the past four years in Spain has allowed us to roll out a unique proximity value proposition to connect with what today’s customer wants: an easy and fast omnichannel shopping experience, and a complete assortment with a variety of locally sourced fresh products and a balance between leading national brands and our own Dia products. All with Dia’s commitment to the highest quality at affordable prices, to be the savings ally for all households,” added Tolcachir.
The strong commercial performance translated into Adjusted EBITDA, which reached 114 million euros in the first half, almost double the figure for the same period in 2023 and three times that of 2022, with profitability increasing by more than 3.5 percentage points to 5.5% of net sales. Positive cash generation of 80 million euros up to June is also noteworthy.
Dia Argentina gains market share in a complex macroeconomic context
In Argentina, Dia successfully navigated a complex macroeconomic first half of the year, demonstrating strong operational performance. Thanks to excellent business management, it gained market share (growing above the competition) and increased customer numbers, while customer satisfaction rose to historic levels, with 69 points on the NPS index, with store service and attention being the most highly valued aspects.
The number of like-for-like tickets increased by 2.7% during the semester, reflecting customer confidence in the current context. In volume terms, sales fell by 5.6% during the period, heavily impacted by the contraction in consumption in the market, but achieving better performance than the sector.
The online channel maintained its positive trend in the first half and increased digital customers to 34.6% of the total customer base, 9 percentage points higher than the previous year, raising online sales to 10 million euros, representing 1.3% of total sales.
“These results have been achieved thanks to the constant effort of a team committed to and passionate about our customers; a network of franchisees who share our values and contribute their entrepreneurial spirit, and suppliers who are willing to offer the highest quality at the best price. The progress we showcase today confirms the success of our strategy, and we are committed to continuing to work with passion for our customers to drive Dia’s growth and fulfil our purpose: to be closer every day to offering great quality within everyone’s reach,” concluded Tolcachir.
The strong operational performance and significant improvement in results achieved in the first half of 2024 underscore the strength of Dia’s proximity-focused strategy and its ability to successfully face the challenges of the sector and the current environment.
“We have closed a very positive semester, with improved results and leverage that places the company in a strong position to tackle the debt refinancing process that we will address later this year, which will ensure the resources needed to realise our future ambitions,” said Guillaume Gras, Chief Financial Officer of Grupo Dia.
