Dino grocer wants to maintain trend of improving gross margins; assumes mid-single-digit LFL growth in Q4

"In terms of gross margin, as we have a stable situation in the market, we are improving our purchasing conditions. The pricing policy is unchanged, we are benching to discount chains," Krauze said.

"We believe that we are on a path of margin improvement, and we would like to maintain this trend," he added.

Dino's CFO noted that the supply chain is currently unwavering.

After the three quarters of 2024, Dino's group revenue stood at PLN 21.522 billion (EUR 5 bln), up by 13.5 percent year on year.

LFL sales growth in the third quarter was 2.3 percent. In January-September, LFL sales grew by 4.9 percent (20.6 percent year-on-year growth).

In the fourth quarter of 2024, Dino expects mid-single-digit LFL growth.

"Our expectation for the fourth quarter is mid-single-digit LFL," Krauze said, adding that Dino's LFL sales in October returned to the good levels of July and August.

"In terms of LFL in the third quarter, after two good months, July, August, we had a very weak September, but in October LFL returned to July and August levels," the CFO and board member of Dino reported, indicating that September's results may have been affected by the weather.

He assessed that the consumers have been in good shape but are still cautious in their purchasing decisions.

Krauze indicated that in the third quarter, basket deflation was smaller than in the second quarter.

"We expect inflation to return, we are currently in deflation all the time. (...) Probably in the coming periods inflation will return, for example because we will enter the base effect," Krauze assessed.

Asked if a slowdown in EBITDA margin could be assumed, he replied: "The slowdown should decelerate, and we want to move towards an improvement path. We intend to improve the EBITDA margin. (...) From the level we have now, we are able to improve it".

Dino's EBITDA margin after the three quarters of 2024 was 7.8 percent, against 8.9 percent in the prior year period.

Asked about plans to use the funds generated, Krauze replied: "The goal for next year is to accelerate growth as much as possible".

"For now, we want to see to what extent we are able to grow the chain - how fast, how many shops, and that will be the guideline for what we will do with the cash," he added.

Krauze reiterated that the company aims to open more shops next year than in 2024.

"It's a long-term process and you can't jump very quickly to a higher rate. It's ongoing," the CFO said.

Krauze reported that CAPEX per shop is currently increasing in line with inflation.

The company sees an opportunity for OPEX costs to grow in line with revenues in 2025.

In the third quarter of 2024, Dino Polska opened 69 new shops. At the end of September, the Dino chain comprised 2,572 stores, up by 232 from the prior year period.

pel/ ao/