Slovenian retailer Mercator Group has posted year-on-year sales growth of 2.2% to €2.1 billion in its financial year 2019.
The company reported a net profit of €4.7 million, up 190.5% or almost three times more than 2018, while normalised EBITDA amounted to €172.4 million.
Debt Reduction
The retailer also significantly reduced its debts, with the net debt to EBITDA ratio falling from 7.2x to 5.2x.
Mercator Group generated 58.3% of its sales in Slovenia, 31.1% in Serbia, 4.9% in Bosnia and Herzegovina, 4.8% in Montenegro, and 0.9% in Croatia.
In its home market, the retail group increased its market share by 1.6% to 31%, while the combined market share of its four major competitors Spar, Tus, Hofer and Lidl was 60%.
In Serbia, the retailer reported an 11% market share, while its four biggest competitors, Delhaize Serbia, Lidl, DIS and Univerexport, together hold 22% market share.
Last year, Mercator opened approximately 24 new stores and refurbished 113 existing outlets, ending 2019 with 985 retail and 170 franchised stores.
New Store Formats
In line with shopping trends, Mercator Group rolled out the Organic and Minute store formats during the financial year.
In addition to standalone store formats, the retailer embedded the Minute concept in existing stores in the form of standalone Minute departments.
Another highlight was the launch of the new Gourmet Maxi Market store in Ljubljana, a flagship store in the gourmet grocery segment.
The group also confirmed the largest investment in Mercator's history: the construction of a logistics centre in Ljubljana, which will drive further growth in business.
Product Strategy
Mercator Group continued with its strategy of offering the biggest range of local, national, and regional brands during the financial year.
The 'Moje Znamke' initiative is a long-term campaign initiated by the company for bringing together suppliers and for joint marketing activities in the region, which involves more than 5,700 products and 230 suppliers.
The retailer sells 1.1 billion goods annually from local and regional suppliers, which account for 62.5% of Mercator Group's total retail sales.
Restructuring Strategy
In 2019, Mercator Group continued the implementation of its financial and business restructuring strategy, while meeting key debt targets and significantly improving the maturity structure of financial liabilities.
The company completed the sale of ten shopping centres in Slovenia, as well as the Roda Center in Serbia.
The proceeds from these transactions were used to repay financial and operational liabilities.
The company also signed a refinancing agreement with VTB Bank (Europe) SE worth €80 million on significantly better terms, and a debt restructuring agreement with AIK Banka in Serbia, totalling €90 million.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine.
