DIA Distribuidora Internacional de Alimentacion : Second Quarter 2018 Results

The DIA group posted gross sales under banner of EUR4.6bn in the first months of the year, implying a 1.4% increase in local currency compared to the same period in the previous year.

Comparable sales in Spain rose by 0.3% and by 1.8% at group level. In the first half of the year, 903 stores were remodelled, of which 860 in Spain. The DIA Group keeps the level of remodelling at 1,090 stores for all of 2018.

In Spain, online sales from January to June reached EUR39m, implying a 48% increase.

'We have almost completed our ambitious remodelling plan for the year, with more than 900 stores already upgraded in Iberia with good results. We are starting to observe the impact of these transformations in the very positive sales trend in July and we expect to sustain this positive pattern in the second half of the year, when we also plan to open new DIA, La Plaza and Clarel stores. Argentina experienced big currency depreciation in Q2 2018. In this environment, our business is getting stronger by the day, gaining market share and growing operational profit.

In Brazil, the good sales performance seen since March continued until the transport strike massively impacted our operations. DIA's lean supply chain and geographical concentration was hit hard, with very high out of stocks in May and June, leading to a significant negative impact on sales and profitability in the quarter. Since July, business has returned to normal. The new strategy plan that was announced at the AGM is being completed and will be presented to the market in October', declared Ricardo Currás, DIA Group CEO.

Adjusted EBITDA reached EUR225.8m, down by 14.6%, and underlying net profit fell by 44% to EUR66.1m.

The company has decided to discontinue its Max Descuento cash & carry activity, which has 35 stores in Spain. As of the end of June 2018, the DIA Group had a network of 7,409 stores.