Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sonae SGPS SA (STU:YSON, Financial) reported a consolidated turnover growth of 15.4% year-on-year, reaching EUR 7 billion, driven by retail operations and new acquisitions.
- The company successfully integrated Mosti, a leading pet care retailer in the Nordics, and Bruni, a health, wellness, and beauty retail platform in Spain, enhancing its market position.
- MC, the largest retail business of Sonae, achieved a year-to-date revenue increase of 12.2% to EUR 5.4 billion, with a like-for-like growth of 4.9%, and improved profitability.
- Vartan showed strong top-line growth with a 7% increase in turnover and a 15.4% growth in e-commerce sales, accounting for 16% of total turnover.
- Sierra's European shopping center portfolio maintained high occupancy rates at 98% and achieved a net result increase of about 20%, driven by strong performance and asset valuations.
Negative Points
- Mosti faced a challenging consumer environment in the Nordics, with discretionary consumption decreasing, particularly in Finland, impacting gross margins.
- Vartan's profitability was affected by intense promotional activities and inflationary pressures, maintaining an underlying EBITDA margin of 4.9%.
- The company's net debt increased by EUR 676 million over the last 12 months due to significant acquisitions, slightly surpassing the prudent threshold of 15% for holding LTV.
- Bright Pixel's investment activity slowed down compared to the previous year, with uncertainty in the market affecting asset valuations.
- Sonae SGPS SA (STU:YSON) does not expect any major new acquisitions in the near future, focusing instead on integrating recent acquisitions and organic growth.
Q & A Highlights
Q: Can you update us on Sierra's expansion plans, particularly in Spain, and the expected returns from these investments?
A: (Unidentified_5) Sierra is expanding its portfolio into new segments, including a residential project in Spain. We are leveraging our integrated platform for operations in the real estate market. While we are not disclosing exact investment figures, this expansion is a strategic priority.
Q: Regarding Mosti, do you see opportunities to improve gross margins in the short term, or will you continue investing in prices to drive demand?
A: (Unidentified_2) We expect gross margins to improve in the next 3 to 6 months, although not to the highest levels seen in the past 18 months. We aim to sustain our competitive position in the market.
Q: Can you provide an update on MC's store openings in the cosmetics segment in Spain and the basket inflation in Q3?
A: (Unidentified_4) Year-to-date, we've opened 21 stores in health and beauty in Spain. We plan to open 20 to 25 stores annually in the coming years. Basket inflation for grocery in MC was around 1% in Q3.
Q: What is the strategy for Bruni and Renal in Spain, and are there plans for international expansion?
A: (Unidentified_4) We are focused on integrating Bruni and Renal, ensuring a smooth transition and maintaining growth momentum. We plan to open 20 to 25 stores annually in Spain. International expansion is a possibility, but our current focus is on integration and growth in Spain.
Q: What is the strategy behind the Pet City acquisition, and are there plans for further geographic expansion for Mosti?
A: (Unidentified_2) The Pet City acquisition is a step towards expanding into new geographies. We see potential for organic growth in the Baltics and are exploring opportunities in other European markets. We aim to leverage synergies in logistics and procurement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
