Colruyt : Consolidated annual information on the financial year 2019/20

PRESS RELEASE - 16 June 2020 (17h45 CET) - Regulated information

Consolidated annual information on the financial year 2019/20

Comparable revenue grows 1,7%

Net result excluding one-off effects increases slightly

Halle, 16 June 2020

Introduction

Colruyt Group's current year result evolution was impacted by specific effects, which are briefly commented below. In order to facilitate comparability with last financial year, the evolution of the key figures is also explained exclusive of these specific effects ('comparable results') in part II Financial report.

At the end of financial year 2019/20 Colruyt Group experienced diverse impacts as a result of the COVID-19 health crisis. The food stores handled higher volumes and thus fulfilled their essential role in the food chain. Revenue from the non-food, foodservice and fuel distribution activities declined during the crisis.

At all its sites, the group has taken measures to ensure the continuity of the operations, as well as the security and health of its employees and customers. Colruyt Group has also provided support to its independent entrepreneurs and has taken on its social role through various actions such as the donation of food and face masks.

All the employees of the group have, each in their own way, made a contribution in these unprecedented times. The Board of Directors hereby wants to thank all employees once again for their constructive attitude and the efforts they have made.

The impact of the COVID-19 crisis on the 2019/20 results is explained below.

The implementation of IFRS 16 'Leases' as from financial year 2019/20 has resulted in a number of shifts in the income statement. In order to facilitate comparability with last year, the key figures of 2019/20 are also reported exclusive of the IFRS 16 impact. The adoption of IFRS 16 has no material impact on the operating profit and the net result.

Early April 2019, Colruyt Group acquired a 75% stake in the Belgian specialist cycle shop Fiets!. The group increased its stake in Fiets! to 100% in November 2019. Fiets! is fully consolidated as of financial year 2019/20. The integration of Fiets! has enhanced revenue growth. The impact on the operating result and on the net result is limited.

Last financial year included fifteen months (January 2018 - March 2019) of the results of the activities in France, whereas financial year 2019/20 includes twelve months. This difference in reporting period is due to the change of the financial year of the French companies in 2018/19.

Consolidated annual information on the financial year 2019/20

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I. Consolidated key figures

(in million EUR)	1/04/2019 - 31/03/2020		1/04/2018 - 31/03/2019	Variance Exclusive of IFRS 16 impact
	Published results (1)	Exclusive of IFRS 16 impact (2)	Published results (3)
Revenue Gross profit % of revenue Operating cash flow (EBITDA) % of revenue Operating profit (EBIT) % of revenue Profit before tax % of revenue Profit for the financial year % of revenue Earnings per share (in EUR) (4)	9.581 2.565 26,8% 807 8,4% 511 5,3% 561 5,9% 431 4,5% 3,14	9.581 2.565 26,8% 784 8,2% 512 5,3% 564 5,9% 433 4,5% 3,15	9.434 2.471 26,2% 758 8,0% 485 5,1% 519 5,5% 384 4,1% 2,78	+1,6% +3,8% +3,5% +5,5% +8,7% +12,9% +13,6%

• (1) The 2019/20 results were impacted by the COVID-19 crisis. IFRS 16 is being applied as of financial year 2019/20. Fiets! is fully consolidated as of 1 April 2019. Financial year 2019/20 includes twelve months of the results of the activities in France (April 2019 - March 2020).

• (2) The implementation of IFRS 16 'Leases' as of 2019/20 has led to a number of shifts in the income statement, mainly from operating expenses to depreciation charges. In order to facilitate comparability with last year, the key figures of 2019/20 are also reported exclusive of the IFRS 16 impact.

• (3) Financial year 2018/19 included fifteen months of the results of the activities in France.

• (4) The weighted average number of outstanding shares equalled 137.279.011 in 2019/20 and 137.758.364 in financial year 2018/19.

II. Financial report

A. Consolidated income statement

Colruyt Group's revenue rose by 1,6% to over EUR 9,5 billion in 2019/20. The revenue growth was impacted by the COVID-19 crisis, the difference in reporting period for the French companies and the integration of Fiets!. On a comparable basis, revenue growth amounted to 1,7% including petrol and to 1,4% excluding petrol.

The market share in Belgium of Colruyt Lowest Prices, OKay and Spar equalled 32,1% in financial year 2019/20 (32,2% in 2018/19). The market share showed an increase in the first semester and a decrease in the second semester. Colruyt Group's market share declined during the COVID-19 crisis in 2020. Neighbourhood store concepts in particular experienced faster growth during this period, in part due to their greater number and therefore proximity.

Colruyt Group relied in this respect on the latest market share calculation of Nielsen, that had to adopt a modified approach as a result of the COVID-19 lockdown.

Consolidated annual information on the financial year 2019/20

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The gross profit margin amounted to 26,8% of revenue (26,2% in 2018/19). The Belgian retail market was marked by a challenging macroeconomic environment, fierce competition and fluctuating promotional pressure in financial year 2019/20. On a comparable basis, the gross margin increased from 26,3% to 26,8% of revenue.

Net operating expenses were impacted by the implementation of IFRS 16. On a comparable basis, these costs rose from 18,1% to 18,6% of revenue. The increase is mainly the result of ongoing investments in employees, distribution channels and change projects.

During the COVID-19 crisis Colruyt Group made additional investments in the safety and health of its employees and customers. As a token of gratitude for the efforts made, the group granted additional benefits to its employees.

At the end of March 2020, Colruyt Group had 29.056 employees (full-time equivalents). The increase by 717 full-time equivalents compared to 31 March 2019 is partly due to the acquisition of Fiets!.

The operating cash flow (EBITDA) amounted to 8,4% of revenue. On a comparable basis, the EBIT margin was 8,2% of revenue, the same as last year.

The depreciation, amortisation and impairment charges increased compared to 2018/19. Depreciation charges were impacted by the implementation of IFRS 16. Comparable depreciation and amortisation charges rose by EUR 14 million as a result of the continuous investments in the distribution network and in transformation programmes.

Impairment charges decreased by EUR 9 million compared to 2018/19, mainly as a result of an impairment on transformation programmes last year.

The operating profit (EBIT) totalled EUR 511 million or 5,3% of revenue in 2019/20.

The comparable EBIT margin amounted to 5,3% of revenue (5,3% in 2018/19).

The decrease in financial result is mainly due to the gain (EUR 18 million) Colruyt Group realised last year on the sale of the stake in the offshore wind farm Northwester 2.

The increase by EUR 38 million of the share in the result of investments in associates and joint ventures is mainly attributable to a one-off effect related to the contribution of Parkwind into Virya Energy and to lower results at Vendis Capital.

At the end of 2019, Colruyt Group and its family majority shareholder Korys decided to combine their renewable energy holdings. In the second half of 2019/20, the new energy holding Virya Energy was founded and the offshore and onshore activities of Parkwind and Eurowatt were contributed. Prior to the transaction, Colruyt Group held a 60,1% stake in Parkwind. Today, Colruyt Group holds a majority stake in Virya Energy. Colruyt Group and Korys have taken the necessary measures in view of the conflict of interest rules. As a result of this transaction, Colruyt Group realised a one-off positive effect of EUR 45 million in 2019/20. This transaction had no material impact on the 2019/20 cash flow statement.

The effective tax rate equalled 25,5% in financial year 2019/20 (26,8% in 2018/19). In 2019/20, the tax rate was influenced by legislative amendments and the continuous investments in innovation and change projects. Last financial year included a positive tax effect related to the sale of the stake in Northwester 2.

The profit for the financial year amounted to EUR 431 million. The net result increase mainly reflects one-off effects in the current and last financial year.

Excluding one-off effects, the comparable net result equalled 4,0% of revenue (4,0% in 2018/19). Comparable net profit excluding one-off effects increased by EUR 8 million compared to last year (EUR 380 million in 2019/20).

Consolidated annual information on the financial year 2019/20

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The comparable headlines are as follows:

•  Colruyt Group's comparable revenue grows by 1,7%.

•  Comparable gross margin increases from 26,3% to 26,8% over the financial year.

•  Colruyt Group maintains its long-term focus and continues its investments in employees and change projects as well as in efficiency, quality, innovation and sustainability.

•  Comparable operating cash flow (EBITDA) equals 8,2% of revenue (8,2% in 2018/19).

•  Comparable operating profit (EBIT) amounts to 5,3% of revenue (5,3% in 2018/19).

•  The financial result decreases and the share in the result of investments increases, both primarily due to one-off effects.

•  Excluding one-off effects, the comparable net profit amounts to 4,0% of revenue (4,0% in 2018/19).

The Board of Directors will propose a gross dividend of EUR 1,35 per share to the General Meeting of Shareholders.

B. Income statement per segment

1. Retail

Revenue from the retail activities grew by 1,5% to EUR 7.897 million. The revenue growth was impacted by the COVID-19 crisis, the difference in reporting period for the French companies and the integration of Fiets!. The comparable retail revenue increased by 1,4%. The retail activities accounted for 82,4% of the consolidated revenue in 2019/20.

At the end of February 2020, the COVID-19 health crisis also hit Belgium, France and Luxembourg. This crisis resulted in strong revenue growth for the food stores, particularly in the month of March. As of 18 March 2020, all non-essential businesses in Belgium were required to close, including Colruyt Group's non-food stores. The non-food stores reopened after year-end, in May 2020. A large number of non-food staff and employees of the central services were willing to help out in the food stores as well as in the logistics and production departments of the group.

Revenue of Colruyt in Belgium and Luxembourg grew by 2,2%, in part as a result of COVID-19. The COVID-19 crisis resulted in higher sales volumes in the Colruyt stores. Comparable revenue went up 0,7% in financial year 2019/20.

Colruyt Lowest Prices renewed nine stores and opened five new stores this year. Smart electronic price labels were introduced in all Belgian Colruyt stores, allowing the store employees to focus even more on their core tasks and on customer satisfaction in general. Colruyt Lowest Prices delivers on its brand promise day after day by guaranteeing the lowest price for every product at every moment. Based on over 100.000 price recordings a day, price reductions and promotions offered by competitors are each day integrated in the sales prices.

OKay, Bio-Planet and Cru reported an aggregate revenue growth of 6,0%. Excluding COVID-19 sales, revenue increased by 3,1%, essentially due to expansion and a positive calendar effect.

OKay continued the roll-out of its renewed OKay store concept in 2019/20. Another priority was product range innovation. The "One Meal Box", an easy meal solution requiring no subscription, was successfully launched in May 2019 and is in the meantime being sold in more than 110 OKay stores.

Consolidated annual information on the financial year 2019/20

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Bio-Planet remains the group's pioneer in sustainability, organic products and healthy food. To make conscious and healthy food even more accessible, Bio-Planet lowered the prices of some 500 basic products. The first fresh herbs from Colruyt Group's vertical farm are now being sold. Bio-Planet also opened a new fossil fuel-free store and continued to invest in sustainable innovation.

The Cru multi-experience markets in Overijse, Ghent and Antwerp target people with a passion for delicious food. Customer experience and craftsmanship are at the forefront. In this way, Cru continues to focus on revenue growth and operational efficiency.

Revenue of Colruyt in France decreased by 13,9% due to a difference in reporting period compared to last year. Last financial year included fifteen months of the results of the French activities, whereas financial year 2019/20 includes twelve months. The COVID-19 crisis led to higher sales in the French Colruyt stores, while having negative repercussions on the fuel distribution activities of DATS 24 in France.

Comparable revenue of Colruyt in France increased by 4,5% including petrol and by 6,2% excluding petrol. The revenue growth is the result of organic growth, sales price inflation and expansion.

At Colruyt Prix Qualité customers can find everything they need for their weekly groceries, with the convenience in choice of a well-organised neighbourhood supermarket. Colruyt Group continues to invest in its French retail activities: the logistical capacity will be doubled in the years ahead.

The non-food retail revenue increased by 6,7% compared to last year.

The combined store revenue of Dreamland and Dreambaby remained practically stable as a result of the enforced non-food store closures as from 18 March. Excluding COVID-19 effects, revenue grew by 4,4% in 2019/20. The online second-hand platform NewStory opened seven new collection points in Dreamland stores this year.

Early April 2019, Colruyt Group acquired a 75% stake in the Belgian specialist cycle shop Fiets!. The group increased its stake to 100% in November 2019. This investment fits with Colruyt Group's ambition to respond to evolving consumer needs and to promote sustainable mobility. As from financial year 2019/20, Fiets! is fully consolidated, which has enhanced the non-food retail revenue growth. In March 2020 the Fiets! stores were also required to close their doors.

Colruyt Group continues to invest in and innovate its online store concepts and digital applications.

Customers are increasingly using the MyColruyt app and now also have the option to use speech technology to create shopping lists. In 2019/20 the website of Fiets! was completely renewed and now allows customers to also order online. To better inform the customer and work more efficiently, store personnel now have access to smart phones.

Colruyt Group also continues to invest in the digital development of Xtra. Besides a joint loyalty card, Xtra is also a fuel card and a payment card. Customers automatically and immediately enjoy all advantages of ten store formats and webshops of the group. Via Xtra, customers are also able to consult an overview of their purchases and manage their interaction with Colruyt Group in a transparent manner. New functionalities are gradually being added to the Xtra app.

Consolidated annual information on the financial year 2019/20

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