I find myself addressing you once again, this time to present the company’s annual report for 2012.
Allow me to start out by congratulating each and every one of the people and institutions that make the DIA business possible. Our success would not be possible without your commendable dedication and effort.
2012 was a year of consolidation for a business model which has continued to display resilience and growing profitability despite the complex economic environment. The events of 2012 provide us with huge encouragement to forge ahead with the DIA endeavour. Last year was particularly successful in Spain and Portugal and in Latin America, although expansion was at all times guided by profitable growth criteria.
Our model has made us the authentic specialists in neighbourhood shopping. Our ability to respond quickly to emerging and shifting consumer needs prompted us to explore new shopping formats, such as DIA Fresh, and to bolster our strategic commitment to perishables.
The acquisition of the Spanish and Portuguese business from Germany’s Schlecker is worth highlighting; this transaction will help us to specialise further in the neighbourhood segment and to grow in the high-potential health and beauty products segment.
The franchise regime, which currently accounts for almost 42% of our worldwide store network, remains a cornerstone of DIA’s strategy. The implied support for the self-employed and the contribution to the local business landscape reinforce our faith in a management model that is more central than ever to our business development strategy.
In 2012 we increased our store network by 244 outlets, bringing us close to the 7,000 mark worldwide, driven mainly by solid growth in mature markets such as Spain and Portugal and high-potential markets such as Brazil and Argentina. The DIA business has once again demonstrated its resilience in a challenging environment. We have stepped up our commitment to helping our customers to continue to make their money go further.
The continual global review and upgrade of our most entrenched store models, DIA Market and DIA Maxi, has enabled us to get closer to our customers by fine-tuning our offering of perishables and making sure we continue to offer the best price/quality equation in the market. The growing take-up for our brand in all our markets endorses this strategy. DIA’s private label brand is the best-selling retail brand in countries such as Argentina and Brazil, in turn the tangible result of the company’s unflagging efforts to continually improve and offer top quality at unbeatable prices.
In another manifestation of our willingness to really listen to what consumers want, we have started to develop our e-commerce platform this year. Although this initiative is still at an early stage of development in Spain, we think the online platform will prove a substantial growth engine in the near future.
Underpinned by our unwavering commitment to becoming increasingly competitive and profitable, we delivered adjusted EBITDA growth of 9.4% to €609.5 million last year, while net debt ended 2012 at €629 million, implying steady leverage year-on-year. Gross under-banner sales rose 6.7% to €11.68 billion, while adjusted net profit jumped 19.3% year-on-year to €190 million.
The company expects to deliver double-digit annual EPS growth between 2013 and 2015, rewarding our shareholders and investors for trusting in our growth trajectory.
Aware that the year underway will throw up significant challenges, I believe we are readier than ever to overcome any difficulties that may lie in our path. To this end, we will concentrate our investment effort on the two regions presenting highest growth prospects – Spain & Portugal and Brazil. We will also continue to reinforce our neighbourhood shopping offering with new sales formats and to accelerate the pace of store openings.
Chief Executive Officer