Q1 2020 RESULTS
Steinhausen, 25. May 2020, Selecta Group B.V. (“Selecta” and together with its subsidiaries, the “Group”), the leading route-based unattended self-service retailer in Europe, announces its results for the three months ended 31 March 2020.
Q1 Financial Highlights
- Revenue decreased by 12.3% to €358.1 million1 for the three months ended 31 March 2020 (compared to €408.3 million for the three months ended 31 March 2019), primarily due to the emerging impact of the COVID-19 pandemic. This decrease was partly offset by portfolio additions (DBS in Germany, Aramark in Belgium, Select Drinks in the UK and C.S. Vending in Italy).
- Adjusted EBITDA2,3 decreased by 58.3% to €28.6 million1 for the three months ended 31 March 2020 (compared to €68.8 million for the three months ended 31 March 2019), and Reported EBITDA3 decreased by 48.5% to €25.4 million for the three months ended 31 March 2020 (compared to €49.3 million for the three months ended 31 March 2019) as cost cutting measures were unable to fully offset revenue reductions. This decrease was also due to a higher cost base resulting from growth initiatives implemented in 2019.
- Net cash generated from operating activities was an inflow of €44.3 million1 for the three months ended 31 March 2020 (compared to €80.1 million for the three months ended 31 March 2019). This decline compared to the prior year period was primarily due to lower EBITDA and the adverse impact of a lower revenue base on the Group’s working capital position.
In conjunction with the reporting of its results for the first quarter of 2020, Selecta will today host an audio webcast presentation for holders of its senior secured notes at 15:00 CET / 14:00 BST to discuss its first quarter financial results. Selecta’s management will answer some of the questions received prior to the call from investors through the Group’s investor relations platform.
Safeguarding the health, safety and wellbeing of employees, business partners, customers and other stakeholders remains of the utmost importance and a major focus for the leadership team of Selecta.
As of today, the COVID-19 crisis continues to have a negative impact on Selecta’s business by causing significant disruption across all of its markets and severely affecting its operations:
- Italy was Selecta’s first market to be materially impacted (at the end of February 2020), with Scandinavian countries affected last, around three weeks later;
- The spread of the virus, as well as the phasing of government restrictions, differed across countries, which resulted in a decline in demand for Selecta’s products and services that differed across each market.
The Group continues to implement measures to mitigate the negative financial impact of the COVID-19 crisis and to manage the Group’s liquidity position, including:
- Undertaking a comprehensive cost saving programme and lowering Selecta’s fixed cost base;
- Applying for applicable government support schemes available to the business, including furloughing a significant part of Selecta’s workforce;
- Deferral or cancellation of planned capital expenditures;
- Deferral of tax payments, in line with government programmes;
- Entering into negotiations with selected landlords to discuss deferral of rental payments and vending fees;
- Management of orders for inventories to the extent possible; and
- Negotiating extended payment terms with many of our suppliers.
Whilst significant progress has been made with regards to the implementation of these mitigating actions, Selecta is at this time unable to accurately forecast the extent or duration of the impact of COVID-19 and the time it may take for demand to fully recover. Selecta continues to evaluate the short, medium and potential longer-term implications of the current crisis on working habits and travel patterns, which are key drivers of its business. Selecta is, however, at this stage not able to provide financial guidance for 2020.
As noted in its 15 May 2020 announcement, Selecta has appointed Kirkland & Ellis LLP as legal advisor and PJT Partners (UK) Limited as financial advisor to provide assistance in the assessment of strategic, balance sheet and liquidity options in light of the current adverse market conditions.