Jumbo || BUY | CP: EUR 19.64 | TP: EUR 22.70
Strong FY22 profitability, above our call; strong start in 2023e, 1Q23e sales up by 33% y-o-y
Facts: Jumbo released a strong set of financial results, with sales (already announced in early January) increased by +14% YoY, driven by Greece (+14% y-o-y) and Cyprus (+17%), and to lesser extent Bulgaria (+17%) and Romania (+10%). Regarding profitability, Jumbo’s EBITDA expanded to EUR 336.8m (up by 10.4% YoY) and Net Profit shaped at EUR 248.6m, up by 14.8%. The company declared no additional dividend (has already distributed 1.155/share last March).
FY22 Key Financial Results
EUR m | FY21 | FY22 | y-o-y | Optima | Actual vs. Optima |
Revenues | 831.9 | 949.4 | 14.1% | 950.0 | -0.1% |
EBITDA | 305.0 | 336.8 | 10.4% | 317.4 | 6.1% |
Net profit | 216.6 | 248.6 | 14.8% | 222.3 | 11.8% |
Source: the Company, Optima bank research
Details: Turning to key balance sheet items, Jumbo’s net cash remained positive at EUR 522.5m, down by only EUR 26.6m y-o-y, as the strong operating profitability was offset by the three dividend distribution during FY22.
1Q23 Trading Update: The Company also released strong growth for March 2023, with group sales up by +22% y-o-y, driven by parent net sales (up by 26% y-o-y), Cyprus (+18%), and followed by Bulgaria and Romania (+17% and
+18% respectively). Additionally, in 1Q23, Group’s sales recorded an overall increase of c. +33% YoY, on easy comparables. In more detail, during the same period, Greek sales recorded a 35.5% YoY increase, Cypriot sales were also up by +30%, Bulgarian sales gained +33%, while Romanian sales were also up by +33%. The company also reiterated its latest guidance for 2023, expecting that sales growth will hover at around 15 and net earnings will shape at around EUR 270-275m. Jumbo’s strong cash position allows the company to proceed with its investment plan for 2023e, with the opening of a Leased hyper-store at Plovdiv, Bulgaria, an Owned hyper-store at Iasi, Romania, the online store in Romania and also a Hyper- store in Nicosia Cyprus, (possibly in the first four months of 2024). Finally, Jumbo is set to proceed with the early repayment of its EUR 200m bond loan maturing in 2026, before the next coupon payment (due in May 2023).Comment: Jumbo, following a strong FY22 both in sales and profitability terms, stepped in 2023 with stronger earnings momentum, which in turn allowed the management to provide a more aggressive guidance for the year. In our view, Jumbo is set to once again meet or even outperform its guidance, which could trigger an additional dividend distribution in 2H23e.