EBITDA in local currency decreased by 6%. Deflation on the food market coupled with increased costs and investments in prices caused the chain's EBITDA margin to drop to 7.6% from 8.5% in the first half of 2023. At the same time, Biedronka increased the number of visits to stationary stores and increased its market share. The chain opened 60 stores (the network added 51 locations) and carried out 104 modernizations of branches.
Unprecedented challenges, volumes are not growing
– In 2024, the Group faces an unprecedented merger:
a sharp drop in food prices and a significant increase in costs. This combination puts strong pressure on margins. Despite a significant increase in the minimum wage in Poland, the grocery retail sector is stagnant and losing volumes. This lack of consumer dynamics has also contributed to a noticeable increase in competition in the food market. If consumer demand improves before the end of the year, it will have a positive impact on the company's results, we read in the financial report of Jeronimo Martins.
The priority for Biedronka will be to increase sales volume, which means further investments in prices and strengthening its competitive position. This may exert higher pressure on the EBITDA margin in the second half of the year than in the first half of 2024. The company plans to open 130-150 stores and modernize approximately 275 locations.
In turn, Hebe will focus on development in the e-commerce channel, which is the basis of its foreign expansion. Approximately 30 new locations will be opened in Poland.
Results of the Jeronimo Martins Group
Jeronimo Martins Group, owner of, among others, Biedronka stores had a net profit of EUR 156 million in the second quarter of 2024, compared to EUR 217 million of profit a year earlier – the company said in the report.
Revenues increased by 6.8% in this period. to approximately EUR 8.23 billion. EBITDA amounted to EUR 532 million, which means a decrease of 4.8%. rdr.
Throughout the first half of 2024, the group's EBITDA increased by 3.5%. y/y to EUR 1,040 million with revenues of EUR 16.3 billion (an increase of 12.3% y/y). The net profit of the parent company amounted to EUR 253 million (a decrease of 29.1% y/y).
The Jeronimo Martins Group's CAPEX amounted to EUR 396 million in the first half of 2024, compared to EUR 459 million a year earlier, of which expenditures in Biedronka reached EUR 121 million.
