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Nicola Mira
Published
Jun 22, 2020
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El Corte Inglés reports over €15 billion revenue in 2019-20, EBITDA up by 5.4%

Translated by
Nicola Mira
Published
Jun 22, 2020

Spanish retail distribution group El Corte Inglés closed the 2019-20 financial year on the upswing, with all its indicators in positive territory - just before the Covid-19 pandemic broke out. The group, whose fiscal year ended on February 29 2020, increased its annual sales by 1.2%, reaching a revenue of €15.267 billion. It also reduced its debt, increased EBITDA and improved its consolidated net profit.


El Corte Inglés generated a revenue of €15.261 billion in 2019, with EBITDA up by 5.4% - El Corte Inglés


According to the group’s Management Report and Annual Accounts document, published on Friday June 19, gross margin grew by 0.3%, reaching €4.504 billion. “These figures reflect the positive trend of [the group’s] business, as well as the success of the strategic decisions taken,” said El Corte Inglés.

The group's EBITDA exceeded €1.097 million, growing 5.4% over the previous financial year. Consolidated net profit rose by 20.1% compared to the previous year, and stood at €310 million.

Slashing debt was one of the group’s rallying cries throughout the year, and the policy brought positive results: indebtedness was reduced by €638 million, the group closing the financial year with debts for €2.729 billion. “This was made possible by the growth of the business itself and, to a lesser extent, by the sale of non-strategic assets,” said El Corte Inglés, adding that “it is worth noting that the strong financial position [the group] enjoyed at the end of 2019 is helping us to deal with the significant impact the Covid-19 crisis is having on [our] sales.”

Retail distribution the group’s mainstay

Retail distribution remained the main driver for El Corte Inglés in the 2019-20 financial year, generating a revenue of €13.128 billion and EBITDA of €930 million. Within the retail sector, department stores were the leading sales channel for El Corte Inglés, with a revenue of €11.887 billion, equivalent to 78% of the group's total revenue. “The diversity of the product range, innovation, responsiveness to market needs and a service ethos are the elements that underpin [our] business model, alongside a commitment to quality and customer satisfaction,” said El Corte Inglés.

The group’s fashion and accessories label Sfera merited a special mention: in 2019-20, its sales increased by 8% over 2018, generating a revenue of €461 million. “Most of our efforts were directed toward boosting [Sfera’s] brand value, with a highly directional selection of items, redesigned store interiors and significantly improved garment quality,” said El Corte Inglés, commenting on the label's positive results.

El Corte Inglés’s other business units are supermarket chain Supercor, which generated a revenue of €714.6 million, the Viajes El Corte Inglés travel division, with a revenue of €2.738 billion, and the group's insurance and services divisions, which reported a revenue of €215.6 million and grew by 8.1% over the previous year.

A year of refinancing and divestment



El Corte Inglés’s 2019-20 financial year was marked by several milestones. In August, the group formalized the incorporation of DIY and home equipment specialist Bricor, and in the last part of the year, following governmental approval for the operation from the 2020 financial year, the group sealed the sale of its IT subsidiary Iecisa to French group GFI.

In addition, El Corte Inglés set up a new real estate business unit for the promotion and management of its real estate assets. “El Corte Inglés has one of the most extensive corporate real estate portfolios in Spain. This is why this new line of business was introduced on the market, providing a service both to the group itself and to third-party companies,” stated the group.

Finally, refinancing was another strategic priority for El Corte Inglés in 2019-20. Last February, the group signed a refinancing deal for its bank debt, for a maximum aggregate amount of up to €2.0 billion, extending payment deadlines until February 2025.

In order to cope with the sales slump caused by the pandemic in the 2020-21 financial year, El Corte Inglés obtained a new loan facility (government-backed via the Spanish public credit institute, ICO) for a revolving line of credit worth €1.341 billion. The group initially reported that the amount in question was €1.311 billion.

“The goal of this operation, which complements the previous agreement signed in February, is to guarantee reliable short-term financing and to ensure that, in the coming months, the group will have the liquidity needed to face the economic impact of the extraordinary measures taken during the health emergency,” stated the group.

Marta Álvarez is the president of El Corte Inglés. The Ramón Areces Foundation has a 37.9% stake in the group, and another 22% belongs to holding company Cartera de Valores Iasa. Marta and Cristina Álvarez have a 70% stake in the latter, the remaining 30% being held by former El Corte Inglés President Dimas Gimeno and his family. Among the other shareholders are Qatari investor Sheikh Hamad Bin Jassim Bin Jaber Al Thani (with a 10% stake), Corporación Cellar (with a 9% stake) and Mancor (with an 8% stake).

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