Jumbo: Increased revenue and EBIT in the nine months, pressure from pandemic – inflation

Jumbo completed the nine months of 2021 with increased revenues (+ 7.87%), but also profits before taxes and interest (+ 26.71%) on an annual basis.

In its announcement, however, the company emphasizes that it is facing significant pressures from the restrictions on the operation of retail due to the pandemic, high energy prices, inflationary pressures, but also problems in the supply chain.

In more detail, based on the corporate announcement:

“With the stores operating with restrictions on the number of customers allowed, in July there was a positive growth rate of sales for the Group by about + 0.7%, compared to the corresponding month last year. In August, the positive image of tourism in Greece, contributed to the increase of the Group’s sales by + 3% September, which is traditionally the month of “back to school”, ended with an increase in sales for the Jumbo Group by about + 2.5%, compared to the corresponding Consequently, in the third quarter of 2021 (July-September 2021) the Group’s sales amounted to Euro 229.11 million from Euro 224.46 million in the corresponding period last year (July-September 2020), ie increased by 2.1 %.

For the period 01.01.2021 – 30.09.2021 the sales of the Group amounted to Euro 542.89 million from Euro 503.28 million in the corresponding period last year, showing an increase of 7.87% During the third quarter of 2021, profits before Taxes, Interest, and Depreciation (EBITDA) of the Group amounted to Euro 88.01 million from Euro 75.70 million in the corresponding period last year, ie increased by 16.26%. For the period 01.01.2021-30.09.2021 the profits before Taxes, Interest, and Depreciation (EBITDA) of the Group amounted to Euro 191.25 million from Euro 157.1 million in the corresponding period last year, showing an increase of 21.74 %, due to inventory management and retention of operating costs. During the third quarter of 2021, the Profit before Taxes and Interest (EBIT) of the Group amounted to Euro 79.23 million from Euro 66.57 million in the corresponding period last year, ie increased by 19.02%. For the period 01.01.2021-30.09.2021 the Profit before Taxes and Interest (EBIT) of the Group amounted to Euro 164.12 million from Euro 129.53 million in the corresponding period last year, showing an increase of 26.71%.

The Group has significant liquidity with cash and other current financial assets amounting to 751.76 million Euros from 665.15 million Euros as at 31.12.2020. In October 2021, with the new wave of the pandemic significantly affecting the Balkan countries, the Group’s sales maintained the positive sign, recording an increase of approximately + 0.6% compared to October 2020. Greece and Cyprus recorded a positive course in level of sales as the stores remained open and without the imposition of new measures. By contrast, in October 2021, the Group’s stores in Bulgaria recorded a decrease of -23% and in Romania, a decrease of approximately -1.6%, despite the successful opening of the new Jumbo Group store in Craiova. Vaccination coverage in Bulgaria and Romania remains extremely low and political uncertainty exacerbates the problem. Transitional governments in their attempt to deal with the new Covid wave are making spasmodic moves by imposing extremely harsh measures.

The above results in a dramatic decrease in sales in Bulgaria for the month of November, with the percentage tending to be around -40%, while the percentage of sales reductions for Romania tends to be around -20%. The downward trend of November for the subsidiaries in Bulgaria and Romania foresees a dramatic decrease for December as well, as the situation does not seem to change until the end of the year, while the scenario of total lockdown in these countries cannot be ruled out. In Greece and Cyprus all Jumbo stores operate in contrast to last year where they remained closed due to the lockdown during the last two months of the year.

In November in Greece, new restrictions were imposed on retail, creating conditions of unfair competition in relation to the Hyper Markets. As we head to the finish line for Christmas, the imposition of any additional restrictive measures on the operation of retail in Greece and Cyprus, will have a negative impact on sales. The Management of the Group constantly evaluates the situation and tries to balance in an environment with:

-limitations on the operation of retail imposed by local governments to control the pandemic

-energy prices are at historically high levels,

– the cost of fares has not escalated for almost a year, and

-inflationary pressures that have a significant effect on product market prices. It is clear that these slowing factors are not expected to improve in the first months of 2022.

The management of Jumbo at this juncture, strongly resists through profitability and its strong financial position, with pillars: 1. the preservation of the JUMBO model towards the consumer in terms of price with the offered product and 2. to remain faithful in its commitment to distribute money every year.

As already announced, on November 26, a gross amount of € 0.30 per share was paid to the shareholders-partners of the company in the form of extraordinary cash distribution.

Consequently, summed with the amount already paid in July 2021, € 0.47 / share gross, the total gross amount paid to the shareholders against the profits for the year 2021 amounts to a gross amount of 0.77 euros per share, increased by 25% to compared to 2020, which amounted to 0.615 euros per share “.