EXECUTIVE SUMMARY
APPRECIABLE RESILIENCE OF RESULTS IN AN UNUSUAL INFLATIONARY CONTEXT
Growth still driven by the expansion of the distribution network
At the end of 2022, Label Vie's revenue stands at 13,947 Bn, slightly higher than our forecasts which anticipated an activity level of 13,556 Bn. Therefore, yhe Group recorded a sustained growth of +18.6% in 2022, the highest in the last decade. This performance is attributed to:
- A continued expansion of the operator's distribution network to 155 points of sale, through the opening of 1 Hypercash and 18 Supermarkets including 1 Supeco;
- A commercial effort on the prices of fresh products and 600 products of daily consump-tion. A strategy that has proven successful in an inflationary context.
A maintained profitability despite inflationary pressures
Label Vie's direct margin decreased by -0.5 pt from 12.2% in 2021 to 11.7% in 2022. Two factors are behind this change. Firstly, a significant increase in purchases by +18.9% which didn’t be fully reflected in sales prices. Secondly, a product mix effect due to the increase in the contribution of the Hypercash segment to 35% of the Group's consolidated sales. It should be noted that this seg-ment is characterized by a very competitive pricing policy.
In addition, the EBITDA margin was almost stable at 9.7%. This is due to the optimization of costs generated by economies of scale and the digitalization program initiated at the end of 2021.
Growth in current income greater than that of revenue
In 2022, Label Vie recorded an increase of +19.5% in its current incometo MAD 769 Mn against an AGR estimate of MAD 730 Mn. This was supported in part by a better than expected improvement in financial income from MAD 12.8 Mn in 2021 to MAD 17.3 Mn in 2022.
The Group's reported profits jumped by 83.8% to MAD 748 Mn, taking into account a non-current income of nearly MAD 200 Mn. The latter concerns the sale of 19 assets to the REIT Terramis, 99.99% of which is owned by Label Vie.
Pending a re-evaluation of our target price for the stock, we maintain a positive opinion on the resilience of the Moroccan retail sector.
