Credit Guide 02/22: Financial debt adjustment for operating leases – what, why, and how?
5. March 2022.Credit Guide 03/22: Risks and metrics in analysis of high-growth companies
10. March 2022.With a turnover of HRK 3,87bn in 2021*, Kaufland occupies the fifth position in the food retail industry in Croatia, behind the market leaders Konzum plus, Lidl, Spar, and Plodine. Kaufland continues to increase its market share, albeit slower than expected considering its high investments. This was confirmed during the pandemic, when Kaufland’s turnover decreased by 0,2% despite the three new store openings. Kaufland has been struggling to increase its sales per store, and the 2015-2021 CAGR amounts to 0,5% only. Kaufland’s stores are of a larger format, with higher share of non-food assortment, thereby increasing its sensitivity to crises when customers tend to focus on necessary products.
Due to significant competition within the industry and a high operating leverage, Kaufland’s EBITDA margin in the period 2019-2020 was just above 5%, while in 2021 it fell down to 4,7% due to the weak tourist season and additional costs caused by the pandemic. The quoted margins are at the lower end of the average bracket for the food retail industry.
Kaufland’s FCF generation ability was negative up until 2019, and in 2021 it turned negative again due to high CAPEX. During 2021 Kaufland opened three new stores and invested HRK 514m, which drove the FCF into negative territory. However, FCF maintenance CAPEX has been positive for two years now, albeit at the modest level, with a margin of 2,3%.
* Kaufland’s fiscal year spans from March to February.
Company profile
Kaufland Hrvatska is one of the leading food retailers in Croatia with sales of HRK 3,87bn and adjusted EBITDA of HRK 180m in 2021. Kaufland Hrvatska is an operating subsidiary of the German-based Schwarz Group.
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