Dutch food wholesaler Sligro suffered a 17 % turnover drop last semester, as the Covid-19 fallout also halved its EBIT and pushed net profit far below zero.
Off the threshold
While the first trimester of the year still showed a small turnover growth, sales melted away from March. Sales dropped by as much as 55 %, CEO Koen Slippens says. However, that drop has been decreasing ever since, reaching 35 % by the end of June. Still, the company's turnover fell off the billion-euro threshold down to 943 million euros, while last year's net profit (13 million euros) made way for a net loss of 72 million.
Slippens says a worse evolution was avoided by responding quickly, cutting costs and maximising the use of government schemes. While some long term investments continued (such as its SAP programme), there were cuts in store renewals and the like.
Sligro is also active in Belgium, and had to admit defeat to the virus there as well. The projected break-even point was postponed, meaning the company felt forced to introduce a 60 million euro depreciation into its books - a huge factor in the net profit drop.
Belgian turnover dropped 25 % to 85 million euros, as the lockdown reduced deliveries to pubs and restaurants to almost zero. A change in fortune came from the successful decision to allow normal consumers into its stores, which are normally reserved for professionals.
In a press statement, Sligro says it expects the recovery phase after the Covid-19 pandemic to last for at least a year, with the possibility of a second wave of infections looming over the economy. In order to be more flexible in dealing with resurgences, "we will have to reconsider earlier choices regarding our structure and priorities."
The company does not dare release concrete forecasts for the coming period - just like many other companies. Two things were however included in the statement: the expectation that the second semester as well will show decreasing numbers, and the certaintly that there will be no dividend released for this year.