Portuguese retail chain MC has reported a 9.4% year-on-year revenue increase, to €1.6 billion, in the first quarter of 2024, driven by strong performances in its grocery and health & beauty segments.
While food price increases were significantly lower in in the quarter (1.2%) compared to the previous year (20.5%), market competition in Portugal remained intense.
Despite this, the Sonae-owned retailer managed to solidify its market share, it said.
Store Opening Programme
During the period, MC stayed on track with its plans to open new stores and renovate existing ones.
It opened 28 stores in the quarter, including six new Continente Bom Dia convenience outlets. These investments, along with improvements to its IT and logistics infrastructure, led to €57 million in capex (+15%) during the period.
MC's free cash flow (FCF) was negative at €20 million, an improvement from the negative €86 million FCF in Q1 2023 due to better operational performance and positive calendar effects, it added.
MC maintains a strong balance sheet, with a net debt of €507 million and a net debt to EBITDA ratio of 2.7x as of the end of March (down from 2.8x at the end of Q1 2023).
MC also said it expects to receive the necessary approval to finalise the acquisition of pet care retailer Druni in Q2 2024. Sonae acquired 81% of Musti's shares last November for around €700 million.
Recycling Initiative
During the quarter, MC launched a pilot recycling project, called Ecospot, in 11 Continente stores across the Greater Porto area. The programme aims to encourage the recycling of plastic packaging for yogurt and dairy desserts, and runs until July 31.
As part of the initiative, MC has partnered with 12 school groups in the region, representing over 50 schools. These schools will receive donations based on the amount of packaging collected, with a maximum of €1,500 per group.
Every kilogram of packaging collected translates to a €3 donation for the partnered schools.
Once collected, the packaging will be sent to Lipor for processing and then to Intraplás, a company that assesses the recycling process. This assessment will evaluate the quality and quantity of the recycled material, along with its potential for use in new packaging and products.
