Valora wins all kiosk and convenience outlets put out to tender by the SBB
Valora wins the SBB's call for tenders for all 262 kiosk and convenience outlets from 2021 and will expand its network by 31 sales outlets. Valora thus successfully underscores its position as the leading kiosk operator in Switzerland while at the same time significantly expanding the convenience share of its total business. Valora will roll out its updated avec and k kiosk concepts to the tendered outlets by 2021. Because of the tender effects, the profit targets for the 2019 financial year fall at the lower end of the announced range. Valora will provide more details during a telephone conference today at 10.00 a.m.
Valora was awarded the bid for all five lots of the SBB's call for tenders for kiosk and convenience outlets from 2021. This equals a total of 262 locations, split into 116 kiosks and 146 convenience outlets. The tender included 191 k kiosk, 8 Press & Books and 32 avec sales outlets of Valora, who operates almost 1,200 shops in Switzerland. The company is thus expanding its network by 31 new locations. Valora has secured these strategically important sales outlets until 2030 with the successful outcome of the tender. These outlets are becoming ever more attractive in the face of the growing mobility of the population and the resulting increase in footfall. Valora not only successfully underscores its position as market leader in the Swiss kiosk business, but is also strengthening the convenience share of its total business.
Expansion of convenience is expected to improve revenue and gross profit margin, net effect on EBIT of CHF -15 million on existing business for Retail CH in 2021
The outlets awarded to Valora will allow the company to grow its revenue on a same-store basis by up to 5% compared with today owing to the conversion of kiosk space into convenience outlets and the introduction of the new kiosk concept. The increased focus on food and beverages will allow Valora to expand the share of total products of this higher-margin product group, which will have a positive impact on the gross profit margin. Future rents for the convenience outlets are in line with more recent comparable rental relationships, while rents for kiosk space will substantially increase. Together with further improvements in cost efficiency, these portfolio changes will have a net effect on EBIT of CHF -15 million on existing business in 2021 compared to 2018 for Retail CH.
Investments in new concepts in 2019 and 2020, 2019 profit targets at lower end of published range
Valora will start with the conversions in the second half of 2019. Together with various product innovations and new offerings, the completely modernised avec and k kiosk concepts will be rolled out at the sites awarded to Valora. This work should be mostly completed by the end of 2020. Valora expects to invest approximately CHF 16 million in 2019 and CHF 44 million in 2020 in these conversions. The new rental conditions will apply from the finalisation of the conversions. Because of the tender effects, the profit targets for the 2019 financial year are at the lower end of the announced range, in otherwise good course of business.
Michael Mueller, CEO of the Valora Group, said: "We are very proud that we have secured these SBB sites that are important to Valora's core business for ten years and are looking forward to continuing our long-standing partnership with the SBB with much innovative power. Thanks to the unique know-how we have gained as a small-scale retailer offering tailor-made product ranges to customers at transport hubs we will continue to contribute to the attractive image of train stations. We are convinced that our updated sales formats, intense focus on customer benefits and commitment to sustainability meet the needs of modern train passengers and that we will be highly visible in the market after the roll-out over the next 18 months."
These changes will not affect the food service formats Brezelkönig, Caffè Spettacolo and BackWerk.
Investors‘ Call and Audio-Webcast
Thursday, 25 April 2019
10.00 am (CET)
Michael Mueller, CEO Valora Group
Tobias Knechtle, CFO Valora Group
Dial-in number for phone conference:
Switzerland / Europe:
+41 (0) 58 310 50 00
+44 (0) 207 107 0613
+1 (1) 631 570 56 13
The recorded webcast will be available by 04:00 pm (CET) latest on www.valora.com.