Eurocash Group 3Q results-press release

Press release

10 November 2021

Eurocash Group sums up third quarter of 2021:

improved effectiveness with stable sales

• Eurocash Group's consolidated revenue from sales reached PLN 7.03 billion in the third quarter of 2021 and was 1% higher than in the same period of 2020. Sales in the wholesale segment were on a similar level to last year's, while sales in the retail segment went up by more than 2% y/y.
• Consolidated EBITDA in the period being discussed reached PLN 236 million, denoting a nearly 5% increase in comparison with the third quarter of 2020. The Group recorded a further improvement in profitability in wholesale and stronger results in retail in comparison to last year.
• Net profit came to PLN 31.1 million, compared to PLN 33.7 million in Q3 2020.

Wholesale: lower Cash&Carry sales offset by Eurocash Dystrybucja

In the wholesale segment, Eurocash Group recorded an increase in EBITDA to nearly PLN 190 million, i.e. by 2.5% y/y, with similar sales, reaching PLN 5.26 billion.

"The third quarter of this year, like the second quarter, was a difficult period for small stores, which was reflected in a decline in sales in the Cash&Carry wholesalers. In turn, we generated higher sales in the Eurocash Distribution format, which is addressed to larger stores. The progressing digitalisation of our business is translating into continued improvement in the profitability of our wholesale activities. Already approx. 43% of total sales in this segment goes through the eurocash.pl platform," said Jacek Owczarek, member of Eurocash's management board and CFO.

At the end of September 2021, the ABC chain organised by Eurocash had 9,143 stores (compared to 9,149 in the previous year). The number of partner and franchise stores in the Lewiatan, Euro Sklep, Groszek and Gama (PSD) chains reached 5,494, denoting an increase by 305 stores y/y.

Retail: improvement in own stores

External sales in Eurocash Group's retail segment reached PLN 1.61 billion in the third quarter of 2021, up by 2% from the same period last year. EBITDA in the retail segment grew by 11% y/y to PLN 85 million.

"The higher sales in the retail segment largely resulted from an improvement in own supermarkets. However, in terms of effectiveness they still lag behind stores operated by franchisees, which presents strong potential for the on-goingre-organisation. As previously announced, by the end of the year we will shut down 59 stores with the weakest results on the market and those where restructuring is not expected to improve results. In the first nine months of 2021, these stores reduced the segment's sales by PLN 22 million and the Group's EBITDA by PLN 14.4 million. We began the process of closing these sites down in the fourth quarter, and we are counting on this to result in higher effectiveness and profitability for the entire segment next year," said Jacek Owczarek.

The chain of small supermarkets being developed by Eurocash Group had 1,594 stores at the end of September this year (including 1,565 stores under the Delikatesy Centrum brand) - 965 of which are franchise and 629 are own stores or operated on a joint venture basis.

Eurocash Group's retail segment also includes 422 Inmedio press stands (as of 30 September 2021). Their sales in the third quarter of 2021 reached PLN 129 million, compared to PLN 144 million in the preceding year. Like-for-like sales increased by 1.6% y/y.

Projects: Frisco enters fourth large city, Duży Ben chain continues expansion

The Projects segment generated PLN 123 million in sales in the third quarter of 2021, up by 22% from the same period of 2020, largely due to the continued expansion of e -supermarket Frisco and the development of the Duży Ben alcohol market chain. Following Warsaw, Wrocław and Poznań, Frisco in the third quarter of this year brought its e-shopping offering to the residents of Kraków. In the past quarter, Duży Ben grew by 23 markets, to 181 sites at the end of September, with like-for-like sales growing by 8.5% y/y.

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Eurocash Group is the largest Polish company in the wholesale of food and other FMCG products. It works with more than 90,000 customers, of which 70,000 are independent entrepreneurs operating local retail shops throughout Poland, which are supported by Eurocash in the area of distribution, marketing, new technologies and education.

Eurocash Group also organises prominent franchise, agency and partner chains such as: ABC, Groszek, Lewiatan, Euro Sklep, Gama, Duży Ben. Based on franchise and own stores, the company is developing Delikatesy Centrum - the largest supermarket chain in Poland.

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Eurocash Group's consolidated financial results

	PLNm		Q3 2021		Q3 2020			y/y change
	Revenue from sales	7,029.6	6,978.3	0.7%
	Gross profit on sales		886.1	2.3%
	906.2
	Gross sales margin		12.70%		0.19pp
	12.89%
	EBITDA	235.8	225.1	4.8%
	EBITDA margin		3.23%		0.13pp
	3.36%
	Net profit		33.7	-7.8%
	31.1
	Net margin		0.48%		-0.04pp
	0.44%
	PLNm		Q1-Q3 2021		Q1-Q3 2020			y/y change
	Revenue from sales		19,093.7	1.6%
	19,392.2
	Gross profit on sales	2,471.6	2,516.2	-1.8%
	Gross sales margin		13.18%		-0.43pp
	12.75%
	EBITDA	438.4		561.7	-21.9%
	EBITDA margin		2.94%		-0.68pp
	2.26%

Net profit/(loss)	(134.3)	13.5	-
Net margin		0.07%	-0.76pp
-0.69%

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For more information, please visit www.grupaeurocash.plor contact:

Magdalena Kupiec	Krzysztof Woch
Eurocash S.A.	NBS Communications
tel. [phone]	tel. [phone]
[e-mail]	[e-mail]