- Valora acquires Convenience Concept GmbH (CC), a company with some 1,300 retail outlets and projected external sales of around € 450 million (CHF 540 million)
- Transaction makes Valora the leading micro-retailer in Germany, Austria and Switzerland, with some 2,900 POS, enabling the firm to build on its position in Germany’s small-outlet retail sector
- Long-term enhancement in profitability in line with previously announced Valora 4 Growth objectives achievable
- Strategic ties to Lekkerland to be strengthened
Valora acquires Convenience Concept GmbH (CC), a company with some 1,300 retail outlets and projected external sales of around € 450 million (CHF 540 million)
Valora’s purchase of the Lekkerland subsidiary Convenience Concept (CC), Germany’s largest integrated kiosk network, has enabled the Group to achieve a significant milestone in the implementation of its Valora 4 Growth expansion strategy. CC’s portfolio of some 1,300 excellently situated outlets, 170 of which are travel retail units occupying sites at public transport hubs, are an ideal match for Valora Retail Germany. In its current network, CC operates the CIGO, Tabak-Börse, ServiceStore DB, U-Store and Kio formats, as well as a number of unbranded units. These outlets, all of which are operated by independent business partners or franchisees, generated external sales of some € 450 million (CHF 540 million) in 2011. This new transaction and the Group’s earlier acquisition of the tabacon network have enabled Valora to purchase Germany’s number one and number four kiosk chains within the space of 18 months. Valora and Lekkerland have agreed not to disclose the purchase price for CC or the terms of the strategic collaboration planned between the two firms. Valora’s existing loan facilities will provide the scope required to finance the purchase. The transaction requires approval by the Bundeskartellamt, Germany’s independent competition authority.
Transaction makes Valora the leading micro-retailer in Germany, Austria and Switzerland, with some 2,900 POS, enabling the firm to build on its position in Germany’s small-outlet retail sector
This expansion of its network to some 2,900 outlets makes Valora the leading micro-retailer in the German-speaking markets. Taken in conjunction with its network of just under 100 units in Luxembourg and Austria, and the 1,200 or so outlets it operates in Switzerland, this transaction also means that Valora Retail is now the second-largest micro-retailer in Europe. The CC purchase will also strengthen Valora’s position as a small-outlet retailer in Germany. The deal will create the largest kiosk network in Germany, comprising nearly 1,500 outlets (some 100 tabacon units, 90 k kiosk units and the 1,300 CC sites) and commanding an estimated market share of around 10 percent. In the first year of full consolidation of the CC units, Valora expects to generate overall external sales in Germany of some CHF 900 million, including the turnover from its current network of some 170 railway station bookstores, but excluding any further acquisitions. This means that the scale of Valora Retail Germany will approach that of Valora Retail Switzerland with its four formats (k kiosk, P&B, avec. and Caffé Spettacolo) and annual sales of some CHF 1.2 billion.
Long-term enhancement in profitability in line with previously announced Valora 4 Growth objectives achievable
Valora’s new network of nearly 1,500 units in Germany means that the Group has now already largely exceeded its growth target of operating some 1,000 German small-scale kiosk outlets by 2015. Current projections indicate that gradual transformation of the new units to the proven Valora/tabacon franchise concept, streamlining the network so as to achieve a clear focus on three core brand formats (k kiosk, CIGO and ServiceStore DB), a marked expansion of the convenience store product range (in the areas of food, beverages and confectionery) and increased promotion activities will enable Valora to generate a substantial increase in the units’ profitability by 2015. Further streamlining of operations will also help Valora to achieve major cost savings and economies of scale over the next few years, raising CC’s EBITDA from some € 12 million in 2011 to more than € 20 million in 2015.
Strategic ties to Lekkerland to be strengthened
Hitherto, Lekkerland Deutschland GmbH & Co. KG had grouped its German retail activities together under its CC subsidiary. As part of this transaction, Valora and Lekkerland will extend and strengthen their strategic partnership. Lekkerland will continue to supply the 1,300 existing CC outlets for a further five years. Lekkerland’s contract to supply its range of food products to the Valora-operated railway station bookstores has also been extended and Lekkerland will supply this product range to Valora’s tabacon units as well. Valora will also benefit from the category management know how of Germany’s largest convenience wholesaler. Michael Hoffmann, CEO of Lekkerland AG & Co. KG, expressed his satisfaction with the transaction with these words, „Lekkerland will now concentrate on wholesale, category management, logistics and services. By supplying and advising these units in the context of our enhanced strategic collaboration with Valora, we will be working together to ensure the further enhancement of the results generated by the CC outlets.” The Valora Group’s CEO, Thomas Vollmoeller, added, „Acquiring Convenience Concept is an excellent opportunity, making it possible for us to achieve the growth and profitability objectives we have set for our retail business by 2015“.
More information you will find in the attached press release.