Portugal’s Sonae group, which includes the Continente retail business, has posted a 6% increase in consolidated turnover in the first quartet of the year, to €1.278 billion.
The group said that its retail operations saw a 4.7% increase in sales in the quarter, to €1.257 billion, despite ‘the adverse calendar effect’ in Q1.
Its food retail arm, Sonae MC, saw its turnover increase by 3.0% to €855 million, with the business increasing its market share over the period.
‘This performance reflects the still demanding competitive environment, marked by intense promotional activity, Sonae MC continuous investment in improving its value proposition – in which a considerable effort in price perception is included – as well as the store network expansion through convenience formats,’ the company said.
As of April 2017, like-for-like sales growth at Sonae MC has been positive, and has been ‘growing consistently over the last six quarters,’ the company noted.
Strong Start
"The year of 2017 began well for Sonae. In a challenging quarter in year-on-year comparison, we grew in all businesses ensuring a profitability in line with our expectations,” commented Ângelo Paupério, Co-CEO of Sonae. “On a consolidated basis, turnover increased 6% and the underlying EBITDA grew 12.7%, highlighting the positive evolution in specialised retail.”
Paupério added that the company continues to benefit from a “solid capital structure, with greater maturity on debt and lower financing costs, thus maintaining favourable conditions for the fulfilment of our growth ambitions and continuous improvement of the value propositions we present our customers.”
Commenting on the company’s performance, Barclays European Food Retail Equity Research said, “Although there is admittedly some hidden value within Sonae's asset portfolio, we believe that the remaining complex group structure and the limited visibility on the potential catalysts ahead might limit the share price upside potential.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
