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Grupo Vips back in the black and accelerates growth in sales and units

    Madrid, 24th June, 2016.


    Madrid, June 24, 2016Grupo Vips closed 2015 as its best year since 2008, with all indicators proving positive, and began a new phase marked by growth and the recovery of its leadership. Having completed its Transformation Plan, the results of which are clearly reflected in the Group’s accounts, it is time to expand in size and turnover without diverting from the basic principles of innovation, quality, efficiency and customer orientation that have guided it throughout the crisis years and allowed the Group to transform as deeply as it has.

    Thus, Grupo Vips has increased its sales (considering the system total) by 5.5% in comparison to the year before to reach €377.6 million versus the €357.8 million seen in 2014, partly thanks to the stabilization of the economic environment but also mainly due to the effect of the improved value proposal of the different brands and improvements in management and efficiency undertaken in the last few years so that it could grow at a faster rate than its market in 2015.

    To this end, the Group’s brands in the “Casual Dining” segment, where the company concentrates nearly 70% of its operations, recorded growth above the reference market average.  Sales increased at Vips cafeterias by 2.9%, at its Ginos Italian restaurants by 5.1% and the Fridays chain by 2.8%. The Coffee Shops and Fast Casual (high quality restaurants without table service) segments also showed important growth with Starbucks Spain, Starbucks Portugal and VIPSmart, growing 10.7%, 26.8% and 69.7%, respectively.

    Recurrent EBITDA rose to €23 million, which is a 13.2% increase over the previous year. Also worth highlighting is the fact that the Group’s staff finally recovered the 2012 wage level in 2015. On more specific terms, the wages for its 2,500 employees had dropped in 2012 by 5 to 8%, through an agreement with the workers’ representatives and as part of the measures implemented to overcome the crisis. As a result and in comparative terms, the Recurrent EBITDA increase is actually significantly higher.  If homogenized, it would be €25.3 million and, therefore, reflect an increase of 24.5% over the year before.

    At the same time, the net income after taxes totals €1.5 million in comparison to the losses seen in 2014 of €3.2 million. The company’s improved results and the possibility of obtaining financing from the market at more competitive costs have allowed it to refinance its existing debt totaling more than €26 million and have additional resources so that it could repurchase the 49% of Starbucks Spain in December 2015 that it had sold to Starbucks EMEA in 2013, as well as increase the rate of reforms and modernization throughout the Group’s entire network. The contribution by Starbucks to the Group’s results is quite relevant as is the outlook for growth meaning regaining 100% of the capital is a very positive milestone for the company.

    As a result of these investments, the Group’s net financial debt totaled €37 million at the end of 2015 (versus the €11 million recorded in 2014). New financing totaling €70 million (a €50 million syndicated loan and a line of revolving credit of up to €20 million with maturity after 5 years) was signed with a group of four banks, BBVA (Sole Bookrunner, MLA and coordinator), Santander (MLA), Sabadell and Popular.

    The net debt to EBITDA ratio was 1.6, which puts the Group in an excellent financial position to be able to continue its growth and development phase.

    Starbucks Spain closed an excellent year in 2015 with positive net income of €2.8 million versus the €852,000 recorded the year before (227% more than in 2014). As concerns Starbucks Portugal, 2015 was the first year since the brand entered the Portuguese market that it also recorded positive net income.  It totaled €82,000; which confirms the brand’s good evolution in Spain’s neighboring country, which had already been seeing positive Recurrent EBITDA since 2012.


    In relation to growth, 2015 stands out because the number of net openings doubled in comparison to 2014, which was also the first year since the beginning of the crisis the Group recorded net unit growth. The Group completed 31 openings - 12 internally owned and 19 under franchises- and 19 closings, which accounts for a net balance of 12 more locations than the prior year (when it recorded 6 net openings). Thus, the company closed the year with a total of 354 locations in Spain and Portugal, versus 342 in 2014.

    Also standing out is the development of the franchise division, one of the growth lines the Group committed to in its Transformation Plan, as it now boasts 58 locations (19 Ginos, 13 Vips, 14 VIPSmart and 12 Starbucks under the “Travel Channel” (10 in Spain and 2 in Portugal)). This is one of the pillars the Group will base its growth on over the next few years.

    Besides accelerating the pace of openings to reinforce growth and recover its sector leadership, Grupo Vips will continue its location renovation and reform policy so by the end of 2017, 75% of Vips and Ginos units will have the new image and be able to offer their customers an all-new experience. To do so, the Group will make significant investments in these chains of around €25 million between 2016 and 2017.

    Likewise, its commitment to digitization will continue to be very present in the company’s strategy over the next few years. The most outstanding milestone last year in this area was the digitization of its Club VIPS with the launch of an innovative App in April, which has already been downloaded more than 400,000 times, quite above the goal the Club had set for the first year. Furthermore, more than 20% of all transactions are now completed by Club VIPS members are via the application and nearly 40% of all operations made with the App include mobile payment. These percentages are growing from month to month and prove the fast adoption and positive valuation of the functionalities and additional services given to users by this tool so they can not only enjoy the advantages of Club VIPS but also the new functionalities that enrich their the experience as customers of Grupo Vips establishments.

    As far as the Group’s outlook for fiscal year 2016, the company plans to close the year with a relevant increase in turnover and improve the comparable market averages as it is expected to exceed 40 new openings between its internally owned units and franchises throughout the year, which will all lead to significant growth in its recurrent EBITDA as well.


    About Grupo Vips (Sigla S.A.)

    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 9 brands it either owns or operates under franchising agreements, including 6 well-known chains: VIPS (cafeteria - restaurant and shop), VIPSmart, Ginos, The Wok, TGI Fridays and Starbucks Coffee in Spain, Portugal and Andorra. Moreover, the group has 3 unique restaurants including Lucca, Rugantino Casa Tua and Tattaglia. The company manages a total of 354 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 450,000 times. Grupo Vips is a private equity company which was founded in 1969. Goldman Sachs Capital Partners V acquired 30% of the company in 2006. Grupo Vips employs more than 9,300 people and ended fiscal year 2015 with 377.6 million euros in turnover.

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