- The Group ended fiscal year 2016 with all indicators showing positive for the second consecutive year, after consolidating its transformation process and making a minority shareholding change that will allow it to focus on intensifying growth over the next few years
- The Group’s total sales (considering the system total and all business lines) increased 4.9% to €396 million in 2016 versus the €378 million seen the previous year, with special emphasis on its improved restaurant business turnover which rose 5.2% - growth that is clearly above the domestic restaurant market which rose around 1.9%
- The Recurrent Gross Operating Results (EBITDA) reflects this positive evolution in the business with growth of 13.1%, reaching €26 million as opposed to the €23 million recorded in 2015, whereas the Recurrent EBIT also increased by 30.8% over the year before to reach €11.2 million, thereby strengthening the continuous upward trend initiated in previous years. Despite having been affected by the extraordinary costs deriving from the definitive closes in its restaurant division, the Net Result continues to be positive with profits of €0.1 million
- The number of openings was intensified last year to produce with a net increase of 17 units (25 openings - -13 internally-owned and 12 franchises - and 8 closings) to reach 371 locations, employing more than 9,200 people (8,000 employees and approximately 1,200 people under the VIPS, VIPS Smart and GINOS franchises as well as the Starbucks Airport locations)
- In parallel to these openings, the Group initiated an Extraordinary Reform Plan to renovate and modernize the image of its VIPS and GINOS locations, completing a total of 20 reform projects (9 VIPS and 11 GINOS) in 2016. More than 25 million euros is to be invested in this plan over two years (2016 and 2017)
- For fiscal year 2017, the Group will continue its focus on intensifying growth and speeding up the renovation of its VIPS and GINOS chains. To this end, it plans to open approximately 80 new locations as well as complete 46 additional reform projects (25 VIPS and 21 GINOS) as part of its Extraordinary Reform Plan. Likewise, the company will reinforce its presence in Spain in 2017 by adding a new brand to its portfolio, wagamama, the first opening of which took place in Madrid in April. The second is planned for mid-June.
Madrid; May 11, 2017 – Grupo Vips sales (total system which includes internally-owned and franchise locations) grew by 5% in 2016. The Group, which has undergone a deep transformation process in the last few years, closed its second year in a row with all positive indicators which reaffirms its commitment to growth after the Plan was completed.
System-wide turnover is close to €400 million (€396.2) in comparison with the €377.5 recorded in 2016, which means growth of about 5% has been recorded over two consecutive years. Particularly positive was the evolution in restaurant sales which improved by 5.2%, to total €355 million. In general, this figure puts the Group’s brands above the rest of the comparable market which grew around 1.9%. In comparable units, sales increased at VIPS Cafeterias by 0.4%, at its GINOS Italian restaurants by 4.5% and the Fridays chain by 3.4%. Its brands in the Coffee Shops and Fast Casual segments (high quality restaurants without table service) also showed important growth with Starbucks Spain, Starbucks Portugal and VIPS Smart growing 5.3%, 8.1% and 5.9%, respectively, in comparable terms.
The Recurrent Gross Operating Result (recurrent EBITDA) also reflects the Group’s recovery as it reached €26 million which is a 13.1% increase over the previous year as well as the fourth consecutive year of growth. Recurrent EBIT also grew, reaching €11.2 million which is 30.8% more than in 2015 when it was €8.5 million. Its extraordinary provisions totaling €1.8 million used to complete its latest closings and sales in its fine dining restaurant line (Tattaglia, Lucca and Rugantino) decreased its Net Earnings to around €0.1 million from the €1.5 million achieved in 2015, which was the first year following the transformation period the Group went through to again return to positive numbers including the additional positive impact of the sale of its Iroco and El Bodegón restaurants for €2.3 million.
The CEO of Grupo Vips, Enrique Francia, highlighted the Group’s satisfaction with its business evolution, “the positive figures from fiscal year 2016 are a response to the roadmap we have created for the next few years with a focus on accelerating growth and recovering our leadership”. Moreover, he added, “the Group has a solid financial position following the entry of ProA Capital into its shareholding structure and the completion of two capital increases which were planned in the entry agreement”. In October, ProA Capital acquired 30% of the Group’s capital, which had been in the hands of Goldman Sachs Merchant Banking Division up until that time with a commitment to contribute an additional €12.5 million as part of a €41.5 million capital increase. Likewise, all shareholders also agreed to another capital increase in March 2017 totaling €15 million, all aimed at boosting equity to accelerate the pace of openings as well as the Extraordinary Reform Plan for VIPS and GINOS scheduled for 2016 and 2017.
During fiscal year 2016, the Group recorded 17 net openings and 29 reforms (9 VIPS, 11 GINOS, 8 Starbucks and 1 FRIDAYS). This net increase of 17 restaurants and cafeterias breaks down into 25 openings (13 internally-owned and 12 franchises) as well as 8 closings. Thus, as of the end of 2016, Grupo Vips had a total of 371 locations in 3 countries (Andorra, Spain and Portugal) meaning it was the first year since the start of the crisis that it increased the number of internally-owned restaurants.
The Group franchise project, one of the main lines of growth for the company, now boasts 67 restaurants and cafeterias, 9 more units than the year before, which can be broken down as follows: 21 GINOS, 18 VIPS Smart, 14 VIPS as well as 13 Starbucks licenses under the “Travel Channel” (11 in Spain and 2 in Portugal) and 1 sub-license in Andorra.
Its net financial debt by the end of 2016 totaled €27 million (versus the €37 million at the end of 2015) with an excellent debt/recurrent EBITDA ratio of 1.03x which means the Group is in a solid financial position for future growth.
In 2016, Grupo Vips reinforced its commitment to its customers with coeliac disease by renewing and expanding its special menus at its VIPS, VIPS Smart, GINOS and Fridays chains. This work was recognized by FACE (Spanish Federation of Coeliac Disease Associations) as the best restaurant chains for people with coeliac disease in Spain following open voting among all of its members and social media followers.
Also noteworthy is the fact that its Grupo Vips chains obtained the prestigious NSF certification in 2016. NSF, an independent and leading international food safety auditing firm, confirmed that the food safety and quality processes of the brands VIPS, VIPS Smart, GINOS, Fridays, and Starbucks, not only comply with current law in Spain and Portugal but also the highest international food safety standards. Therefore, the Grupo Vips quality and food safety processes are now considered to be some of the most complete and demanding in the sector in Europe.
On the other hand, British Sandwich Factory (BSF), the Grupo Vips premium sandwich, salad and takeaway product factory, was certified pursuant to the well-known food safety standard IFS (International Food Standard) to become the first premium fresh sandwich factory in Spain to achieve this accreditation. This milestone is a part of the BSF commitment to ensuring the highest quality products and reinforces the expansion process the project is currently undergoing.
Backed by recorded figures and following the conclusion of the transformation project as well as the minority shareholder change, the Group has begun a phase in which it is focusing its efforts and resources on speeding up its growth and modernizing the VIPS and GINOS networks. The plans for 2017 include the opening of approximately 80 new locations (internally-owned and franchises) as well as expanding the renovation of its VIPS and GINOS chains which was begun last year to nearly all of the network with the reforms of 25 VIPS and 21 GINOS in 2017.
Additionally, the company has begun the development of the restaurant brand wagamama in Spain to reinforce its portfolio by including the world’s leading Pan-Asian restaurant chain. Following an agreement signed in June 2016, which made Group Vips the exclusive licensee operating the brand in Spain and Portugal, the first Spanish wagamama opened its doors in Madrid in April (calle Serrano, 41). Another three locations are set to open before the end of the year.
Grupo Vips is also finalizing the preparations to increase its presence in Portugal, a market where it is already operating 11 Starbucks and where it plans to launch its brands VIPS, VIPS Smart and GINOS, as well as club VIPS in 2018.
The Group trusts that the good evolution in the Spanish economy will allow it to maintain the established growth plan. Sales in the first quarter of 2017 seem to indicate this with proof of dynamic growth above the market average for its different brands. Moreover and in line with the expectations, Grupo Vips opened 17 new units in the first 4 months of the year (6 GINOS, 2 VIPS Smart, 1 VIPS, 1 wagamama and 7 Starbucks) and has completed 25 reform projects.
About Grupo Vips:
Grupo Vips is one of the leading multi-brand and multi-format groups in the food service and retail sector in Spain. It includes restaurants, cafés and shops. The company manages a total of six well-known chains it either owns or operates under franchising agreements: VIPS (cafeteria - restaurant and shop), VIPS Smart, GINOS, Fridays and Starbucks Coffee in Spain, Portugal and Andorra, with wagamama just joining them. Moreover, the group has a premium sandwich, salad and take-away product factory, BSF. The company manages a total of 370 locations serving more than 120,000 customers a day. It runs a pioneer and restaurant sector-leading loyalty program, Club VIPS, with more than 1,000,000 members throughout Spain. The App, which is unique in the market and was launched at the end of April 2015, has already been downloaded more than 700,000 times. Grupo Vips is a private equity company which was founded in 1969. Seventy percent of Grupo Vips shares are held by majority shareholders and founders, led by the Arango family, and 30% are held by the ProA Capital fund. Grupo Vips employs more than 9,000 people and ended fiscal year 2016 with 396.2 million euros in turnover. It was listed this year in the ranking of the companies with the best reputation in Spain, as per the RepTrak® Spain 2017, as the only restaurant business to be included on the list.