Salling Group with historical results
Denmark's largest grocery group, Salling Group, came out of 2020 with the best underlying result and the highest turnover ever. CEO Per Bank believes in even more growth in top and bottom line.
Salling Group
Denmark's largest grocery group with approximately 55,000 employees across Denmark, Poland, and Germany.
The group has 1,444 stores. It operates the chains Føtex, Bilka, Netto, two Salling department stores, the toy chain Fætter BR and a number of web shops.
Previously, Salling Group was also present in Sweden, but that part of the business was sold in 2019 when the low-price concept Netto did not succeed in the neighboring country.
Revenue landed at DKK 60.9 billion. DKK, corresponding to a growth of 7.2 per cent.
The operating profit is DKK 2.8 billion DKK.
More luck than skill
“We are very aware that the grocery industry has been positively affected by corona. A good part of the reason for the progress is due to more luck than skill,” says top manager Per Bank.
The group does not publish separate financial figures for the individual countries and chains, but according to CFO Anders Hagh, records were delivered across all markets - both in terms of sales and earnings.
2020 was in every way an extraordinary year for Salling Group. In part, the corona pandemic set in motion a tremendous growth, because for long periods the Danes could neither eat out nor travel on holiday abroad, nor go to Germany to buy cheap alcohol.
Sceptic to home delivery
However, the Salling Group made two major strategic decisions in 2020. The first was to buy Tesco in Poland in a deal for 1.5 billion DKK. - the largest investment (buy far) in Salling Group's history. The other was to launch home delivery of groceries in Greater Copenhagen via the Føtex chain.
“For many years I have been a little skeptical because the need has not been there and because online grocery shopping is very difficult economically speaking. But we have seen how sales have increased significantly. Bilka To Go has more than doubled, and we have high speed in Føtex.dk,” says Per Bank, but does not specifically comment on the bottom line, which probably is negative for home deliveries.
Good control
Although Salling Group, like the rest of the grocery industry, has benefited from corona, the group would also like to take some of the credit for the progress on its own. Underlying earnings have been rising over a number of years. According to Per Bang it is neat control of the business and costs, which has made it possible to invest - and thus grow further.
“We also have good growth this year, among other things due to the acquisition of Tesco in Poland. When we present accounting figures for 2021, we will again see a few billion increase in revenue,” he argues.
Salling Group expects to invest DKK 1.5 billion. in converting all of Tesco's 300 Polish stores into modern Netto stores. Right now, five Tesco stores are being converted per week, which is pretty fast.
Salling Group, which is owned by the Salling Funds distributes DKK 200 million DKK in dividends for 2020, which the owner gives back to society in the form of donations and charitable purposes.
The group does not publish separate financial figures for the individual countries and chains, but according to CFO Anders Hagh, records were delivered across all markets - both in terms of sales and earnings.
Sources: Salling Group, Dansk Handel, Retail News, Reuters.