Q1 2020 Financial Results and strategic update
May 12, 2020
May 12, 2020
Stable Q1 performance – early positive top line results, supported by continued cost discipline and strengthened financial foundations.
Effective response to COVID-19 crisis: focus on protecting employees, customers and communities; stores open and well-stocked; supply chain operating smoothly
DIA Group, (“DIA” or “The Group”) an international distributor of food and household items operating in Spain, Portugal, Brazil and Argentina, today issued its first quarter 2020 financial results as well as a progress update on its strategic business transformation plan.
Q1 2020 FINANCIAL HIGHLIGHTS (all figures in € million)
Commenting on the results, Stephan DuCharme, Chairman, said: “DIA delivered stable top line performance in the first quarter with Like-for-Like improvement also continuing into the first months of Q2, showing early positive results of our business transformation plan which is now into its second phase. This performance was supported by continued cost discipline and underpinned by a strengthened financial structure with positive cash flow, lower net debt with an enhanced maturity profile and improved trade working capital. “The core foundations are in place thanks to our success last year in attracting world-class talent to the business, re-establishing retail basics and creating a new Group operating model based on strengthened and devolved country leadership, strategically supported by a lean corporate center.
“During the COVID-19 crisis our team worked tirelessly and effectively to serve our customers and I am very proud of their efforts, underpinned by our renewed strong fundamentals. Our crisis response very much showed the important role DIA plays within our communities. We will further reinforce this thanks to DIAContribuye2020, our recently launched community support program created to help mitigate the negative consequences of this unprecedented situation. “Looking ahead, we will focus on the evolution of DIA’s commercial offer to address rapidly evolving consumer behaviors, offering our customers proximity, simplicity and digital solutions in partnership with an entrepreneurial group of Franchisees.
”DIA has completed the first phase of its business transformation initiated in May 2019, with key achievements linked to the three key strategic pillars of the plan:
Investment in capabilities – attracting and retaining talent at all levels
Country leadership strengthened by appointment of Ricardo Alvarez as CEO Spain; Marcelo Maia new Executive Chairman Brazil supported by a newly created DIA Brazil advisory board.
As a result, new Group operating model in place, based on devolved and empowered country leadership with full P&L responsibility, strategically supported by a lean Group corporate center.
Expanded and reinforced Group Board of Directors with four independent members, including digital and retail specialist Basola Valles appointed on January 15th, 2020. Focus on Culture & Trust – rebuilding trust and fostering long-term relationships
Phase 2 of DIA’s business transformation is now underway and a defined roadmap2 will be actively implemented by the country leadership teams, with strategic guidance, performance oversight and capital allocation provided by the corporate center. Immediate priorities for 2020 include the continued development of DIA’s commercial value proposition and new store concept based on Phase 1 learnings and post-COVID-19 consumer behaviors as well as further expansion of online and express delivery programs. The Group also announced targets aligned with the strategic roadmap, with net sales growth driven consistently by Like-for-Like Sales and the gradual roll-out of store refurbishments and relocations, as well as new openings from 2022 onwards.
DIA delivered an effective operational response to COVID-19, protecting employees and customers, while ensuring stores remained open and well-stocked and maintaining the smooth operation of the supply chain. The Group’s response was focused on the following areas:
Protecting our people
Serving our customers
Contributing to our communities