2Q-2020 Press Release

27 of July of 2020
grupo-exito

Sales from e-commerce channels grew 191% in Colombia and 116% in Uruguay, responding adequately to changes in customer consumption habits, due to COVID-19 

In Colombia, the performance of Éxito Wow and Carulla FreshMarket stood out, with sales growing  double digit.

During 2Q20, the company reported a consolidated recurring EBITDA over COP299,000 million, a growth of 10.0%1 compared to the same period last year and a margin of 8.1%

Grupo Éxito continues its commitment to implementing measures to prevent the spread of COVID-19 and keeps its focus on its actions for vulnerable children, continues to pay its nearly 1,000 SME suppliers in advance and has strengthened measures to protect the health of employees and customers

 

  • The operation in Colombia registered sales of more than COP 2.7 billion, with a growth of 4.7% compared to 2Q19 and a 77% share of the Group's total sales. 
  • Results in Colombia were leveraged by the positive performance of electronic commerce channels, with  sales of COP410,000 million growing  by 191%, compared to the same period last year, multiplying them by almost 3x. It was also  outstanding the sales growth of Éxito Wow (+15.3%) and Carulla FreshMarket (+27.6%), with double-digit increases in the food category in each of these company business models.
  • In Uruguay, sales grew 13.3% in local currency and adjusted by calendar effect, driven by the performance of the Devoto and Disco brands, and a solid sales increase of 116% in e-commerce. 
  • The fresh market model in Uruguay represented 40% of the organization's total sales in this country.
  • In Argentina, sales grew 23% in local currency and adjusted by  calendar effect. At the end of the quarter, the company implemented the click & collect  service, capitalizing on the experiences of the Group's other business units.
  • Grupo Éxito, in its commitment to mitigate the spread of COVID-19, donated 700,000 face masks to the local administrations of 42 municipalities and the Presidency of the Republic, equivalent to a contribution of COP 1,400 million.
  • In its aim to work for child nutrition, especially in the midst of the pandemic, Fundación Éxito  has delivered more than 146,000 food packages to Colombian children and families since the beginning of the emergency.
  1. Excluding FX effect

 

Grupo Éxito’s Consolidated Results (Colombia, Uruguay, and Argentina)

During 2Q20 Grupo Éxito recorded Net Revenues of more than COP3.68 billion, with an increase in consolidated sales of 7.0%1 compared to the same period last year, for a total of COP3.56 billion. This result is leveraged on the positive performance of the electronic commerce channels in Colombia and Uruguay and on the solid growth of the Éxito Wow and Carulla FreshMarket formats in Colombia, as well as fresh market in Uruguay.

Consolidated recurring EBITDA reached over COP 299,000 million, with a 10.0%1 growth compared to 2Q19 and an 8.1% margin on sales, reflecting a controlled level of expenses in the region and an increase in sales.

Group´s Net Result reached COP 12,787 million, versus, a loss of COP 18,211 million recorded in the same quarter of 2019. This result reflects the positive variation in the operating performance in Colombia and Uruguay and the lower level of financial expenses.

 

“Grupo Éxito's results in the second quarter of the year were driven by the good performance of the omnichannel strategy (integration of virtual and physical platforms to offer customers various channels, products and services) in Colombia and Uruguay, demonstrating that innovation and the ability to generate a timely response to new consumer habits are the way to adequately meet customer needs in the midst of this emergency generated by COVID-19 and to respond to omnichannel trends that will stay in the future of the world’s retail. To highlight during the quarter, the consolidated sales growth of 7.0%, 4.7% in Colombia and 13.3% in Uruguay in local currency and adjusted by calendar effect, showing that the company has managed to adapt positively to the new business reality, improving its profitability levels in a highly challenging environment. Likewise, within the framework of our social commitment, we reached 26 states, including Amazonas and Chocó, to deliver grocery shopping, food packages for vulnerable children and medical supplies to help meet the emergency needs.  Moreover, we have been present with solidarity solutions to preserve jobs, maintaining advance payments to our nearly 1,000 small and medium suppliers and promoting the manufacture of face masks with our textile workshops, which generate nearly three thousand direct jobs,” said Carlos Mario Giraldo Moreno, Grupo Éxito CEO.

 

  1. Excluding FX effect

 

Consolidated Operational Results - Grupo Éxito

Amounts expressed in millions of Colombian pesos

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In Colombia, outcome  shows that the consistency of the strategy and its focus on innovation and omnichannel  allowed the organization to adapt quickly to the new consumption habits generated by the health emergency

During 2Q20, the Colombian operation recorded sales of more than COP2.73 billion, with a 4.7% growth compared to 2Q19 and in line with the positive trend observed in the last two years. The Colombian operation represents 77% of the company's total consolidated sales in the region during the quarter.

The positive sales performance in the country was driven by  the strong growth of  electronic commerce channel, with sales of  COP 410,000 million, an increase of 191% compared to the same period last year as a result of new forms of purchase during the health emergency. Sales of the innovative formats Éxito Wow (+15.3%) and Carulla FreshMarket (+27.6%),  also contributed to growth,  additionally stand out for their protection and care measures for employees and clients, and the increase in sales of food categories by 9.7% (up 12% in Éxito and 18.2% in Carulla).

  • E-commerce channels have responded to the great need of customers in the face of the health emergency and represented 14.7% of the company's total sales during the 2Q20 compared to 5.2% in 1Q20, an increase mainly driven by:

 

    • A 263% increase in sales from e-commerce channels (exito.com and carulla.com) and more than 40 million visitors.
    • Growth in last mile service and home delivery by 127% with 2.6 million orders during the quarter.
    • Adoption of mobile applications with more than 3 million downloads and more than 87 thousand orders during the quarter, 480% more than in 2Q19. In the “Mi descuento” (My discount) module, which allows strengthening the relational discount, more than 2.5 million coupons were used.
    • Expansion and strengthening of the click and collect service in 450 stores in the country, with more than 59 thousand orders, which means an increase of 194.7% compared to the same period of the previous year.
    • Launch of the virtual platform of the Viva shopping centers, with purchase and pick-up services, home delivery and Viva online. Sales through these channels accounted for 7.8% of total tenant sales in 2Q20.

 

  • Innovative formats grew primarily in the food category: in Éxito Wow, sales grew 15.3% in the 2Q and represented 19.2% of total brand sales. Carulla FreshMarket, on the other hand, increased  sales  27.6%, with a 27.9% share of the brand's  sales.

These positive results in the retail business as a result of the company's ability to adapt and transform in the midst of the health emergency to respond to new consumer habits of customers, managed to counteract the performance of other complementary businesses such as Viajes Éxito and real estate, which faced challenging environment during the quarter arising from the health emergency by COVID-19.

Recurrent EBITDA in Colombia reached more than COP 243,000 million, growing by 11.6% compared to 2Q19, with an recurring EBITDA margin of 8.5% over Net Revenues, driven by  efficiencies and cost control.

 

A time when the country needs us to be united

  • The company continued, as it has done since the first day of the health emergency, to implement biosafety measures so that employees and customers can find the safety and confidence at points of sale and shopping centers that will allow them to “feel at home.”

 

  • Likewise, it has maintained advance payments to nearly one thousand small and medium suppliers, which represents an investment of COP 75,000 million per month and becomes a “chain of favors” so that they can continue with their operations, their jobs and in turn pay their own suppliers. 

 

  • Grupo Éxito continued to generate actions to mitigate the spread of the virus, with the donation of 700,000 face masks, 400,000 to mayors’ offices in 42 cities and 300,000 to the Presidency of the Republic of Colombia to be delivered in the 32 departments of the country. This donation meant a contribution of COP 1,400 million.

 

  • Additionally, together with the Éxito Foundation, the company continues to work for the right to food in early childhood. During this emergency, more than 146,000 food packages have been delivered to nearly 120,000 children and families. In addition, the company has reached the departments of Amazonas and Chocó, where it has no commercial presence. In Amazonas, it delivered 1,000 basic grocery shopping and 500 in Chocó; likewise, in both departments, it delivered 500 food packages for vulnerable children, 20,000 face masks and medical supplies to support assistance in the midst of the emergency.

The performance of e-commerce channels and the Fresh Market model in Uruguay leveraged the positive results

Grupo Éxito's operation in Uruguay continues to show a positive performance. During 2Q20, sales grew 13.3% in local currency and adjusted by  calendar effect, driven by double-digit sales increase of the Devoto and Disco brands; positive results from the promotional activities implemented and solid growth of 116% in direct and e-commerce channels. 

The fresh market model, applied in 17 stores in the country, continued to make important contributions to the result during this period and represented 40% of the company's total sales in Uruguay.

During 2Q20, the recurring EBITDA margin in Uruguay grew 30.8% in local currency, with a margin of 10.3% compared to 8.9% of the 2Q19. This improvement in profitability was due to internal efforts to control expenses in addition to solid sales growth.

In Argentina, results were impacted by mobility restrictions due to COVID-19

In Argentina, sales grew by 23%, in local currency, adjusted by calendar effect, affected mainly by mobility restrictions, the government ban on the sale of non-food products in hypermarkets and restrictions on store supplies.

In order to meet the needs of customers, the company implemented the click and collect service in this country, capitalizing on the experiences of Colombia and Uruguay.

The lower contribution of the real estate business to net revenues was due to the closure of shopping centers during most of the quarter in compliance with government measures. Under this scenario, the company continues to adjust its operations and make its processes more efficient, to favor its competitiveness within a macroeconomic environment and an industry affected by the pandemic. 

 

Grupo Éxito Communications Department

Landline (57+4) 6049696 Ext 306507 / Cell Phone 3146827148

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