The first quarter of 2020, which began very positively, suffered the shock of Covid-19 blocking tourism and catering activities.
The slowdown in results will also impact the second quarter, with a recovery in out-of-home consumption expected from the summer. Caution still prevails, but there is great expectation among Italians for the re-start of Away From Home consumption.
A strategic approach based on 5 priorities was defined and implemented already in March.
Highlights from the first quarter:
- Total revenues decreasing by 21% to approximately 260 million Euros
- Gross operating margin (EBITDA) of 3.6 million Euros
- Negative EPS of -0.06 Euros
- Strong financial structure thanks to high level of liquidity available
The Board of Directors of MARR S.p.A. (Milan: MARR.MI), the leading company in Italy in the sale and distribution of food products to the foodservice, today approved the interim report as at 31st March 2020 and once again expressed its gratitude to the staff and collaborators who, with great professionalism and commitment, are managing this period of important crisis in consumption.After more than 45 years of constant growth, MARR is managing this particular moment with great attention towards its partners and clients, aware of its position of leadership and responsibility on the market.
From the beginning of the impact caused by Covid-19, MARR has defined a clear approach that has oriented its operating and management choices.
Specifically, the 5 strategic priorities are:
1. enhancing liquidity and making available the financial resources required, also thanks to the support of its shareholders, as a result of the suspension of the payment of the dividend, despite the excellent results of 2019;
2. the proper management of operating costs intervening on the reducible fixed costs and optimising the management of the logistics and distribution network;
3. consolidating its position of leadership and its relationship with the market, ensuring for its professional partners/clients a standard of service in full respect of the health and safety regulations in force throughout the supply chain, capable of satisfying and safeguarding the end Consumer;
4. the identification of new business opportunities, with specific regard to the forms of service that have strengthened (take away and food delivery), that have started (food packs) or that are about to develop with the summer season (for example the new line of “Grab&Go Fresh Menu”). The new opportunities also concern the enhancement of some lines of products (for example packaging, disinfectants, ready to eat food) and some adjustment to the new requirements of the commercial approach (e.g. digital);
5. the further strengthening of MARR’s competitive position as a result of the expected market consolidation as soon as the pandemic emergency has receded or at least slowed down.
The group of strategic priorities defined and the consequent tactical and operating activities applied, together with the expected recovery of consumption levels, albeit with the health restrictions that the operators will implement, would suggest a segmented scenario:
- short-term: from now to the end of spring, and therefore in the second quarter, the negative impact will still be significant. Taking into account that during April, all of the opportunities were brought to nil (Easter festivities and public holidays and weekends), the gradual and slow recovery expected from the second half of May will be significantly diluted throughout the entire quarter;
- medium-term: from the third quarter, and thus in the most significant period for national tourist activity, expectations point towards a recovery in consumption levels, with the opportunity to bring the results for the period closer to those typical of previous years;
- long-term: starting from early in 2021, we expect the progressive realignment (which we are estimating could be fully achieved during the second half of the year) and the standardisation of out-of-home consumption, which will once again be close to 1/3 of the total food consumption in our country. During this period, we believe that the market will undergo significant changes to the benefit of the strengthening of the more structured companies, also favouring the natural consolidation towards aggregations.
It should be noted, as resulting from a recent study (by TradeLab, published by Confimprese), that there is a worry in the country relating to personal economic conditions, but that 6 out of 10 Italians believe that out-of-home consumption cannot be renounced. It is worth remembering that the value of the market of out-of-home food and beverage consumption amounted to 86 billion Euros in 2019, with a growth rate of 15% in the last five years and 1.2 million employees working in this sector.
The TradeLab study also shows that 7 out of 10 Italians will try to go on holiday or travel this summer. In this regard, the proposal under definition by the government to pay contributions to families (“holiday bonus”) for them to holiday in Italy could be a useful incentive.
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