Press releases

‍From October 2017, the Warsaw School of Commerce will launch the first edition of the postgraduate studies “Business Management in Retail Trade” for Eurocash Group customers. Representatives of the franchise and partner networks of the Eurocash Group and their employees — a total of 45 people will take part in them.

This is the first postgraduate course in Poland on retail business management dedicated to entrepreneurs associated in networks organized by the Eurocash Group.

— Since 2010, the Eurocash Group has been implementing the Eurocash Skills Academy project, thanks to which Polish independent retail stores from all over the country are becoming more and more competitive — says Agata Wrzecionowska-Dzierba, manager of the Eurocash Academy of Skills. The Academy, which has been attended by more than 30,000 people since its inception, showed us that the owners and employees of retail stores want to focus on the development of their professional competences in a very wide range. Therefore, we decided to go one step further. We want to promote the idea of entrepreneurship, and also emphasize the fact that running a store is business management. Therefore, when we undertake this task, we should first acquire the appropriate knowledge and a number of competencies — adds Wrzecionowska-Dzierba.

Studies begin on October 13, 2017. Their program will include 166 hours of classes as part of 10 reunions. Recruitment for studies will be closed and all 45 places in the 2017/2018 academic year will be allocated to franchisees and partners of the Group, as well as their employees. To become a student, you must have a bachelor's degree, engineer or master's degree and have, among others, one year's work experience in a commercial enterprise. The lecturers will be professors and professionals with experience in the food market. Among them were: Prof. Dr. Elżbieta Mączyńska (President of the Polish Economic Society, SGH), Prof. Anna Skowronek-Mielczarek (SGH), Prof. Henryk Mruk (University of Economics in Poznań), Prof. Dr. Agnieszka Sopińska, Prof. Dr. Bogdan Mróz (SGH) Barbara Bojewska, Prof. Dr. Jan Klimek (SGH), Prof. Dr. Jacek Lipiec (SGH), Jacek Santorski (Social Psychologist and Business Psychologist, Program Director of the Academy of Leadership Psychology) and Marek Zuber (economist, market analyst).

— The course “Business Management in Retail Trade” created and implemented by SGH for the Eurocash Group is the first study of this type in Poland, which was created thanks to the cooperation of a university and a company from the FMCG sector — says Marta Ziółkowska, PhD, head of studies at the SGH. The lecturers are professors of renowned universities and external experts with many years of experience in the food market. As part of the studies, students will acquire knowledge in the field of personnel management, company finances, as well as learn what is the strategy that builds business value on the market and what is the specificity of a family business. We also thought about the form of their credit during the development of the study program. We gave up the classic thesis in favor of developing a business plan for a specific undertaking by the student. Students who successfully complete postgraduate studies will receive a certificate of completion of postgraduate studies and a diploma from the Eurocash Academy of Skills — adds Dr. Marta Ziółkowska.

The Polish Chamber of Commerce received special patronage for the postgraduate studies “Enterprise Management in Retail Trade” at the Warsaw School of Commerce.

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The Eurocash Academy of Skills is the largest comprehensive educational and training program in Poland supporting Polish independent retail stores within the franchise and partner networks of the Eurocash Group. Within its framework, store owners and employees have access to a modern e-learning platform, workshops and conferences, thanks to which they can expand their knowledge in the field of work and management of a grocery store based on changing consumer trends. Since the beginning of 2016, around 11,000 store owners and employees have participated in workshops and conferences within the Academy. More information on www.akademiaeurocash.com.pl

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

More than 400 Toyota Yaris Hybrids will go this year to the Eurocash Group, the leader in the Polish wholesale distribution market of FMCG products. This is the largest order for a hybrid Yaris in the Polish history of the Toyota brand. The cars will be financed by Carefleet S.A., one of the leading companies specializing in long-term vehicle rental, while Toyota Bielany, the largest dealer of the Japanese brand in our country, will be responsible for the delivery of cars.

Toyota Yaris Hybrids are the first cars with alternative drives to be added to the Eurocash Group's fleet of more than 2,300 passenger cars. Their choice was determined by both economic and ecological considerations.

- Environmental aspects are becoming increasingly important to us. Last year, we exchanged lighting for LED bulbs in our warehouses, significantly improving energy consumption. Then we began to look at trucks, in which even such a simple operation as the installation of the fairings significantly reduces air resistance and, consequently, fuel consumption. Now it's time for a much bigger step, i.e. buying hybrid cars for our employees. Interestingly, even in this case, ecology goes hand in hand with economy, since the total costs of using hybrid cars are comparable to those with traditional drives. I believe that this investment will be a trendsetter for other companies in Poland as well — said Jacek Owczarek, Member of the Management Board of Eurocash Group.

The new Toyotas will replace cars whose leases expire in 2017. This is another tender for company cars for Eurocash, which Carefleet wins.

- We have been cooperating with Eurocash since 2010, so I am glad that once again our offer was appreciated. The main criterion for choosing a bidder was the total cost of using the car. When choosing a vehicle brand, the Customer was guided in turn by the ratio of quality to rental price, as well as his own, positive experiences with other Toyota models. The cars have been financed in the form of long-term rental, within which we provide comprehensive technical service — says Krzysztof Rutkowski, Key Account Manager at Carefleet S.A.

The cars that will go to the Eurocash Group will create one of the largest company fleets of cars with alternative drives in Poland. According to Sebastian Pechman, Head of the Fleet Department at Toyota Bielany, which supplies cars to the fleets of the largest companies in Poland, the hybrid Toyota Yaris is a car that fits perfectly with the needs of Eurocash.

- We supply 400 Toyota Yaris with hybrid drive and automatic stepless transmission. It is a new model that is just about to enter the Polish market, innovatively equipped in this segment with the Toyota Safety Sense safety system, i.e. early reaction system in case of risk of collision PCS, automatic wipers or signaling of unintentional lane departure. Cars have all the amenities that cars designed for work should have — adds Sebastian Pechman.

Polish entrepreneurs are increasingly willing to include cars with hybrid drives in their fleets. Although their share of fleets financed in the form of long-term lease in Poland still does not exceed 1%, it is worth noting the dynamic growth trend — according to the Polish Rental and Leasing Association, in 2016 it increased by 1/3 compared to 2015.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

‍Eurocash Academy of Skills has been included in the report “Responsible business in Poland 2016. Good practices”. It is the largest publication in Poland presenting CSR activities developed by the Responsible Business Forum.

The Jubilee — the 15th edition of the report — contains descriptions of the practices of 180 companies that carried out their activities in 2016. All practices are organized according to the 7 areas of ISO 26000: organizational governance, human rights, labor practices, environment, fair operating practices, consumer issues, social engagement and local community development. This year, for the first time, the practices described in the report have been linked to the 17 global Sustainable Development Goals (SDGs), established by the UN in 2015.

Eurocash Academy of Skills — the largest comprehensive educational and training program in Poland supporting Polish independent retail stores — was included in the Report in the area of “Fair Operating Practices” in accordance with ISO 26000. The Academy was among a total of 45 practices reported by 33 companies.

- This is a great distinction for us — says Agata Wrzecionowska-Dzierba, manager of the Eurocash Academy of Skills. Our initiative was created in 2010 and was aimed at employees and owners of stores associated within the Delikatesy Centrum chain. In 2016, we decided to change the formula and from now on all franchise chains of the Eurocash Group can take part in the Academy. In the fourth quarter of last year alone, 11,000 people took part in our workshops and conferences within the Academy.

The Eurocash Academy of Skills is the largest comprehensive educational and training program in Poland supporting Polish independent retail stores within the franchise and partner networks of the Eurocash Group. Within its framework, store owners and employees have access to a modern e-learning platform, workshops and conferences, thanks to which they can expand their knowledge in the field of work and management of a grocery store based on changing consumer trends. Since the beginning of 2016, around 11,000 store owners and employees have participated in workshops and conferences within the Academy.

More information on www.akademiaeurocash.com.pl

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Increase in market shares, profitability due to investments in new projects

In the fourth quarter of 2016, Eurocash Group sales revenues amounted to PLN 5.34 billion and were almost 6% higher than in the same period of 2015. In the whole of last year, consolidated sales exceeded PLN 21.2 billion, which means an increase of more than 4% y/y.

• Gross profit on sales generated by the Eurocash Group in the fourth quarter of last year amounted to almost PLN 602 million (+9% y/y), and in the whole of 2016 it reached PLN 2.18 billion (+8% y/y). This represents an increase in gross margin on sales to 11.26% in the fourth quarter (from 10.96% a year earlier) and to 10.30% in the whole of last year (compared to 9.93% in 2015).
• EBITDA, i.e. operating profit plus depreciation, in the fourth quarter of 2016 amounted to PLN 160 million compared to nearly PLN 185 million in the same period of 2015. EBITDA for the whole of last year exceeded PLN 440 million compared to PLN 476 million a year earlier (-7% y/y).
• A significant impact on the EBITDA result was the costs associated with the development of the project for the supply of fresh products to the stores associated with the Delikatesy Centrum chain and investments in new, innovative retail formats. These projects are aimed at strengthening the market position of Polish independent retail stores, which are the main customers of the Eurocash Group.
• Consolidated net profit for the fourth quarter of 2016 amounted to PLN 73 million compared to PLN 109 million in the same period of 2015. The net profit of the Eurocash Group for the whole of last year reached PLN 190 million compared to PLN 230 million a year earlier.

— In the fourth quarter of 2016, inflation appeared, which is a positive phenomenon for our industry. On the other hand, the worse weather had an adverse effect on the dynamics of sales in small-format stores. In addition, the pressure of discounters on disorganized, smaller stores continues to increase. For the Eurocash Group, thanks to the strengthening of cooperation with partner and franchise stores, the fourth quarter of 2016 was the next in a row in which we improved our market position, which is confirmed by an increase in sales of almost 6%. By increasing the scale of our business, we can more effectively support our customers, i.e. independent Polish retail stores — said Jacek Owczarek, Member of the Management Board and Chief Financial Officer of the Eurocash Group.

Strong increases were in particular related to sales to customers affiliated under the partnership and franchise systems supported by the Eurocash Group. In the case of Delikatesów Centrum in the fourth quarter, this growth exceeded 12% y/y, and in the case of franchise customers served by Eurocash Dystrybucja (i.e. Groszek and Lewiatan stores, among others) it amounted to almost 10%. The Eurocash Group also recorded significant sales growth in the last quarter of 2016 in the Eurocash Alcohols format (an increase of more than 6% y/y, excluding sales made by customers for export) and in the Inmedio newsroom network (+9% y/y).

In the Delicatessen Centrum format, the fourth quarter of 2016 was also another in a row in which like-for-like (LFL) sales, i.e. for a comparable number of establishments, clearly improved. LFL's wholesale sales to this network grew by more than 8% year-on-year, and by nearly 6% in 2016 as a whole. This is, among other things, the result of a developed project for the supply of fresh products, thanks to which the offer of vegetables, fruits and meat and sausages offered by the franchisees of the Eurocash Group becomes even more attractive for consumers.

In addition, the Eurocash Group continued to develop innovative retail formats under brands such as Kontigo, abc on wheels, 1minute and Big Ben, in order to provide its customers — independent entrepreneurs — with new development opportunities and additional forms of competing with discounts.

— In the whole of 2016, we invested approximately PLN 39 million in the development of the distribution of fresh products to Delikatesów Centrum and the development of new retail formats. These investments weigh on Eurocash Group's current results, resulting in lower EBITDA and net profitability, but we are confident that they will deliver positive long-term results. It is worth noting that the Faktoria Win project has already started to earn money — in 2016 it reached the threshold of profitability. We invest in the future of our customers, and therefore also in ours. Importantly, these innovations are appreciated by our customers who join numerous partner and franchise networks we support or develop partnerships with us — said Jacek Owczarek.

Last year, the total number of stores affiliated in partner and franchise chains supported by the Eurocash Group increased by more than 1.1 thousand outlets. The expansion of the abc chain of stores was at a record level of 920 net openings and at the end of 2016 it already covered more than 8.6 thousand locations. The number of partner and franchise stores operated by Eurocash Dystrybucja (Groszek, Lewiatan, Euro Sklep, PSD) increased last year by more than 190 outlets, to 4,750 stores.

The Delicatesy Centrum chain also returned to the path of organic growth in the fourth quarter of last year. In the last three months of 2016, the chain increased its number by 46 stores, bringing the total number of stores to 1,086 at the end of the year.

At the end of last year, the Eurocash Group completed the purchase of 50% shares in FHC-2 and Madas (which operate Delikatesy Centrum stores) and 100% shares in Polska Dystrybucja Alkoholi. At the beginning of 2017, Eurocash completed the acquisition of EKO Holding, the owner of a chain of nearly 250 EKO supermarkets. These acquisitions will have a positive impact on the sales of the Eurocash Group this year. The total sales of the acquired companies last year amounted to nearly PLN 1.5 billion.

— In 2017, we intend to continue to develop the distribution of fresh products and new retail formats and concepts. We assume that the value of these investments will be close to the level of last year, that is, approximately 10% of EBITDA. This year we will also focus on optimizing the Cash & Carry wholesale network. Since 2014, 32 outlets have been added to the network, which has translated into increased fixed costs, but due to deflation and the effect of cannibalisation, this has not translated into an increase in sales. Therefore, we plan to carry out a reorganization, which may involve the closure of selected establishments. However, it is too early to talk about the full scale of the project. Appropriate decisions will be taken within one year after observing the impact of the restructuring on the situation of our clients in each of the local markets — announced the Chief Financial Officer of the Eurocash Group.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Since September, more than 4,000 people have participated in the workshops within the Eurocash Academy of Skills, the largest comprehensive educational program in Poland supporting independent retail stores in Poland.

— The workshop showed us that the owners and employees of retail stores in Poland focus on developing their competencies in the area of customer service and management of fresh stands — says Agata Wrzecionowska-Dzierba, manager of the Eurocash Academy of Skills. Almost 50% of all participants took part in the meetings devoted to these issues.

Partners of the Eurocash Skills Academy are companies such as: CEDC, Coca-Cola HBC, Colian, E. Wedel, Kamis, RYBHAND, McCormick, Spomlek Dairy Cooperative.

In September 2016, a new edition of the Eurocash Skills Academy was launched. Previously, only the owners and employees of Delicatessów Centrum could participate in the initiative. Since September, the Academy is open to all stores affiliated within the franchise and partner networks organized by the Eurocash Group. The Academy is the largest comprehensive educational program in Poland supporting independent retail stores in Poland. Within its framework, store owners and employees have access to a modern e-learning platform, workshops and conferences, thanks to which they can expand their knowledge in the field of work and management of a grocery store based on changing consumer trends.

Strength in the regions!

Although there are various tools available to store owners and employees within the Academy — an e-learning platform or conferences — workshops are still the “basis” of the entire initiative. The idea is to put the acquired knowledge into practice. In 16 voivodships in Poland, workshops are conducted within 8 thematic sections: fresh department management, grocery store employee, store management, staff management, meat-cured meat stand, vegetable-fruit stand, store losses, customer service.

- In addition to consolidating the basic knowledge of customer service, we also teach, among others, how to serve a customer with a hearing impairment or a blind person — says Jacek Maliński, internal coach in the Warmian-Masurian and Kuyavian-Pomeranian voivodships. We also provide knowledge about behavior in various kinds of difficult situations, such as what to do when the terminal does not work or in the event of a complaint. During the workshop, the participants, apart from theory, also prepare and play scenes on selected topics. We make participants aware that customers come to our stores not only to buy products, but also — to get advice from the seller, to talk, and finally, to feel satisfied with the purchase decisions made. — explains Jacek Maliński.

Owners and employees from the Silesian voivodships (888 participants), Podkarpackie (359), Małopolska (321), Warmian-Masurian (319) and Podlasie (252) have participated the most so far.

Industry top topics and strong partnership

The partners of the Eurocash Skills Academy are the largest companies in various market categories: CEDC, Coca-Cola HBC, Colian, Wedel, Kamis, Rybhand and Spomlek. Companies support the Academy in terms of content, prepare substantive materials for the e-learning platform and
workshops. — We have been at the Academy since the beginning — says Zuzanna Ciurzyńska from Coca Cola HBC. As the leader of the soft drinks category, on the one hand, we want to continue to develop it, but also to share the knowledge already acquired, hence our decision to get involved in this initiative. As part of the Academy, we prepare substantive materials that show how to build the value of the category drinks based on factors other than price. For example, it is important to choose the right assortment, exposure, seasonality, but most recently especially important, the right combination with other products. We also carry out a number of studies around the world on the scope of our activity, therefore, store owners and their employees, deciding to participate in the Academy, are guaranteed that the acquired knowledge is a “pill” of the latest issues related to our product category — adds Zuzanna Ciurzyńska.

E-learning course

— Although we have been conducting workshops within the framework of the Eurocash Skills Academy in the new edition for only 4 months, more than 4000 people have already participated in them — says Agata Wrzecionowska-Dzierba. IB We have another year of hard work ahead of us (the Academy operates all year round). It is also worth adding that in addition to numerous participation in workshops, employees and store owners are happy to use our e-learning platform. It is available at any time and place, you can work on it at your own pace. On the platform there are courses in the form of e-learning, multimedia courses, as well as educational paths intended, among others, for people who are just starting to work in the store — adds Wrzecionowska-Dzierba.

You can read more about the Eurocash Skills Academy at www.akademiaeurocash.com.pl

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Piwne Terytoria is the latest project of the Eurocash Group and the first comprehensive solution in Poland for the sale of craft beers in independent grocery stores. The test of the project has just begun, which will cover the area of the Mazowieckie Voivodeship, and by the end of the year, Piwne Terytoria will be available in stores throughout Poland.

Craft beers are the fastest growing segment of the beer market in Poland. However, its sale in grocery stores faces difficulties due, among others, to a large number of small suppliers and a multitude of beer styles, which is why today craft beers are mainly offered in specialty stores.

— We are the first in Poland to offer a comprehensive solution introducing this category to independent trade. Piwne Terytoria is a carefully selected assortment, an exhibition combined with consumer navigation and marketing and educational support. It is a tool that should strengthen the position of independent grocery stores against discount and big-box stores, as well as give an opportunity to increase the profitability of our customers in the extremely competitive beer category — said Magdalena Chwieduk from Eurocash, project manager.

Piwne Terytoria is a store-in-store concept offered to all customers of the Eurocash Group. The test of the project, which will cover the territory of the Mazowieckie voivodship, has just begun. The first Beer Territories were opened in the abc store at Senatorska Street 2 in Warsaw (this store was opened in August 2016 as the first abc store in the new “city” format dedicated to the centers of large cities). After the testing phase and refinement of the concept, the project will be developed throughout the country.

Another similar concept of the Eurocash Group — Faktoria Win, a special wine section designed to facilitate decision-making when buying wine for different occasions — has revolutionized the sale of this category of products in small and medium-sized stores, while significantly contributing to a significant increase in the sales of table wines in small format stores. Today, Faktoria Wine can be found in more than 4,000 independent stores throughout Poland.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Delikatesy Centrum as one of the first retail chains in Poland enabled its customers to use convenient and secure Android Pay mobile payments. Thanks to the collaboration with Google, the new service is available in the franchise network managed by the Eurocash Group, which includes more than 1000 outlets across the country.

Android Pay is an application that allows easy, fast and above all secure cashless payments using your smartphone. It works with NFC-equipped devices with Android operating system KitKat version 4.4 or higher.

To be able to use payments with Android Pay, all you have to do is download and install the free Android Pay app from the Google Play store, then assign a credit or debit card to it, which will be used to make contactless payments. Currently, Android Pay can be used by people with Mastercard or Visa payment cards issued by Alior Bank, T-Mobile Banking Services and Bank Zachodni WBK. Soon, the list of banks that allow Android Pay payments is expected to grow.

To pay for purchases with Android Pay, it is not necessary to launch the application, you only need to wake up the phone and then put the device to the contactless terminal. The payment will be confirmed by a sound signal or vibration of the phone. Transactions up to PLN 50 do not require authorization, and payments above this amount will require confirmation with a PIN code on the terminal.

The launch of a modern form of mobile payments in the Delikatesy Centrum chain of stores is a response to the needs and expectations of customers who are increasingly willing to use cashless payments, including mobile ones.

— We are one of the pioneers in implementing modern and functional solutions, setting new standards in the retail industry in Poland, which is only the second country in Europe where Android Pay payments are available. Customers expect from us not only a wide range of products, but also the highest quality service and new facilities. In the development of modern terminals and convenient payment methods, we are supported by a company from the Eurocash Group — PayUp. We hope that in cooperation with a reputable partner, Google, we will increase the comfort of our customers and reduce the time spent on making everyday purchases — said Jan Domański, spokesman for the Eurocash Group.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

5,000 owners and employees of the Eurocash Group's franchise and partner stores will take part in the inaugural conference in Warsaw. The Eurocash Group's educational programme is one of the key elements of supporting Polish independent trade.

On Tuesday, September 27, the Eurocash Skills Academy will inaugurate its activities in a new, significantly expanded version - the first
in Poland, a comprehensive training program aimed at owners and employees of independent retail stores. The all-day conference, which will be held at the PGE Narodowy stadium, will be attended by 5,000 owners and employees of the Eurocash Group's franchise and partner stores: abc, Delikatesy Centrum, Euro-Sklep, Gama, Groszek and Lewiatan. A series of lectures was prepared for the participants of the conference with the participation of experts of the Eurocash Group and partners of the Academy - leading FMCG companies and scientific and research institutions.

- Supporting the competitiveness of Polish independent trade is one of the priorities of the Eurocash Group - says Luis Amaral, Chairman of the Management Board of the Eurocash Group. The reality of the market has posed extremely difficult challenges for store owners for many years. One of the ways to survive in a market dominated by expansive retail chains was for them to associate in partnership and franchise systems. Today, the key objective seems to be to convince manufacturers to base their sales strategies not on discount stores and hypermarkets, but on independent trade. The future belongs to professional retail enterprises, attractive to the next generations of store owners. Enterprises where, in addition to the grocery store, the family runs a professional liquor store “Big Ben” or a convenience store “1minute”. In addition, another offer of such an enterprise will be a cosmetic store with exceptional service “Kontigo” and a commuter to the Polish village “abc na kolach”. Such a company will rebuild the sales of selected categories, using proven solutions for the sale of wine “Faktoria Win”, magazines and press “Inmedio” or the offer of dedicated products of its own brand. In order for these family-owned enterprises to continue to grow, it is necessary to expand knowledge in parallel and foster innovation. This is what the Eurocash Skills Academy is for - adds Amaral.

Eurocash Academy of Skills is a unique training project in the country that gives the opportunity to deepen knowledge in the field of grocery store management based on changing trends in the FMCG market. The Academy was founded in 2010 and since then educates store owners and employees on topics related to running a retail store in the realities of the Polish market.

In carrying out the activities of the Eurocash Skills Academy, we set ourselves three main objectives. We want to provide our partners with access to current expert and specialist knowledge, to give them the opportunity to use modern forms and methods of education and to support the ongoing exchange of experience. The above assumptions in conjunction with the various available educational forms and a professional team of trainers and specialists determine the success of our project - says Katarzyna Kopaczewska, member of the board of the Eurocash Group.

Eurocash Skills Academy is based on three pillars: an interactive educational platform, workshops and conferences. The educational platform is available at www.akademiaeurocash.com.pl. The new version of the service, which will be launched on the day of the conference, September 27, provides users with unlimited online access to dozens of e-learning training courses tailored to the needs of grocery stores. Multimedia trainings placed on the platform combine lectures with practical use of acquired knowledge. With the help of a personalized service, users will also be able to register for workshops held throughout Poland and download conference materials. The workshops are a practical part of the training program implemented by the Eurocash Academy of Skills. Participants take part in such trainings as “Personnel Management”, “Grocery Store Worker” or “Losses in the Grocery Store”. The knowledge is complemented by monthly newsletters with market curiosities and expert opinions. As part of its offer, the Academy also organizes substantive conferences, during which participants receive information necessary to run a store and up-to-date market knowledge. Meetings are an opportunity to deepen knowledge in the field of store management and exchange of experiences. During the conference, workshops, consultations and meetings with market experts from Poland and the world are organized.

The first nationwide conference of the Eurocash Academy of Skills, with which we inaugurate a new installment of our program will be an excellent opportunity to learn about the latest trends in trading - says Agata Wrzecionowska-Dzierba, manager of the Eurocash Academy of Skills. The participants of this event, which will be almost 5000 thousand owners and employees of the Franchise and partner stores of the Eurocash Group, will participate in a series of presentations and meetings with outstanding experts of the retail industry. Among the topics discussed will be: the forecast of the development of the economy in Poland and in the world, trends in the consumer market, and management of the store and staff. There will also be time for a unique meeting with Professor Andrzej Blikle, who will talk about running a family business and a lecture by Professor Henryk Mruk from Poznań University of Economics on consumer behavior and habits - adds Agata Wrzecionowska-Dzierba.

The Eurocash Academy of Skills operates under the patronage of the Warsaw School of Economics, the Polish Chamber of Commerce, the Polish Franchisors Organization, Franchising.pl and the Retail Learning Institute. The Media Patronage of the Academy was taken over by the Trading Guide. Partners of the Academy are Carlsberg, CEDC, Coca-Cola HBC, Colian, E. Wedel, McCormick, Rybhand and Spomlek.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Increase in sales and improvement in net profitability

• In the second quarter of 2016, revenues from sales of the Eurocash Group, the national leader in the wholesale distribution of food and other fast-moving products (FMCG), amounted to PLN 5.34 billion and were more than 3% higher than in the same period of 2015. In the whole of the first half of this year, consolidated sales exceeded PLN 10.1 billion, which also represents an increase of more than 3% year-on-year.
• Gross profit from sales generated by the Eurocash Group in the second quarter of this year amounted to PLN 558 million, and cumulatively for the 6 months of 2016 it reached PLN 1.02 billion, i.e. 9% more than in the corresponding periods of the previous year.
• EBITDA, i.e. operating profit plus depreciation, amounted to more than PLN 110 million in the second quarter of this year (compared to PLN 114 million in the second quarter of 2015), and EBITDA for the whole of the first half of 2016 reached PLN 158 million (+1% y/y).
• Consolidated net profit for the second quarter of 2016 amounted to PLN 53 million, after an increase of 3% year-on-year, and the entire first half of the year ended the Eurocash Group with a net profit exceeding PLN 55 million, which is more than 13% higher than the previous year.
• Net cash flows from operating activities amounted to PLN 96 million in the second quarter and PLN 143 million increasing from January to June this year, which despite higher investment expenses and dividend payments made it possible to keep the Eurocash Group's net debt at a relatively low level. Net debt at the end of the first half of 2016 was 0.68x EBITDA.

— In the FMCG market, we continue to see increasing competition from discount chains towards our customers. In addition, despite the inflation of food and beverage prices reported by the Central Statistical Office (GUS) of 0.8% in the second quarter of this year, we observe a persistent deflation of wholesale prices, especially dairy products, fresh products, but also beer. Discount chains are systematically increasing their market shares, but thanks to increased joint work they are increasingly faced by our customers, especially small supermarkets are doing well. According to Nielsen data, supermarkets with an area of up to 300 m2 are the fastest growing food sales channel in Poland after discounters — said Jacek Owczarek, Member of the Management Board and Chief Financial Officer of the Eurocash Group. — Under these conditions, both in the second quarter and in the entire first half of 2016, the Eurocash Group recorded an increase of more than 3% in sales compared to the corresponding periods of the previous year. As the main partner of small format stores, we consistently strive to increase the scale of our business and develop new retail formats, strengthening the competitive position of our customers in relation to discount stores — added Jacek Owczarek.

The Eurocash Group's sales to stores affiliated in partner and franchise chains grew at a rate of 5% to 10%. In addition, like-for-like sales, i.e. for the same number of establishments, have clearly improved in the Delicatessen Centrum format. Wholesale like-for-like sales to this franchise chain grew by 4.4% year-on-year in the second quarter, and in the whole of the first half of this year the growth was 3.6%.

— In the first half of the year, the group's results were weighed down by the costs associated with the development of new retail formats. Their total impact on the operating result reached PLN 14.8 million compared to PLN 10.4 million a year ago. These are significant costs, but we believe that by investing in the development of formats such as 1 minute, Kontigo, abc on wheels or Big Ben, we will be able to offer our customers new opportunities to develop and compete with discounts. Thanks to a significant reduction in debt compared to the previous year, financial costs were significantly reduced, which is reflected in higher net profit. In the first half of this year it was more than 13% higher than in the same period last year — pointed out Jacek Owczarek.

The second quarter of this year was the next in a row in which the Eurocash Group recorded strong, positive net cash flows from operating activities. This allowed the net debt to be kept at a relatively low level (0.68x EBITDA at the end of the first half of the year) despite the payment in May of more than PLN 139 million in dividends and higher than the previous year's investment expenses related to acquisitions and investments in new support systems for Eurocash Group customers.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Narrowing down the offer of the Dobry Choices brand and at the same time strengthening its quality, changing the packaging, exposing the positive features of the products and a new, consistent style — these are the main distinguishing elements of the renewed Eurocash Group's own brand.

Dobry Choisir — Eurocash's own brand launched in 2011 — is undergoing a major rebranding this year. The first significant change is a reduction in the number of products with the Good Choice logo. Under this umbrella brand, around 400 products will now be offered under 33 product brands, while so far under the “umbrella” of Good Choice there have been almost 600 products of more than 60 brands.

— The offer of the Good Choice brand will focus exclusively on proven products, with competitive quality and available at an attractive price — points out Łukasz Partyka, Director of the Private Label Department at Eurocash.

As before, products signed with the Good Choice logo will be available in all sales formats of the Eurocash Group, namely in nearly 200 Eurocash Cash & Carry wholesalers, as well as in several thousand retail stores associated with franchise and partner chains cooperating with the wholesaler (i.e. in abc, Groszek, Delikatesy Centrum, Gama, Euro Sklep or Lewiatan stores)) and, among others, at petrol stations supplied by Eurocash.

The refreshed brand combines a name already recognizable among consumers (Eurocash remains with the name of the umbrella brand Good Choice) and colors with a fresh image and a strong display of the physical characteristics of the products. On the packaging of products and materials promoting Eurocash's own brand, there will no longer be the image of Mrs. Ewa Wachowicz, who in recent years served as a brand ambassador. — Surveys and research conducted by us show that when choosing their own brands, consumers are primarily guided by the quality of products, their composition, certificates, or the manufacturer itself, and to a lesser extent by the image of a well-known person. From now on, we focus on clearly communicating the benefits to consumers and highlighting the merits of products — explains Łukasz Partyka.

The new image is naturally associated with a change in the packaging of all products from the brand's portfolio. All packaging will be maintained in a consistent, modern style, and the clear elements of the new design will be the mentioned exposed qualities of the products and the benefits of their choice.

Products in new packaging are already appearing in the distribution network of the Eurocash Group, and according to the assumptions, the full rebranding process will be carried out by the end of 2016. Then all products with the Good Choice logo will be available in new packaging.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Improved profitability and stable organic growth

• In the first quarter of 2016, revenues from sales of the Eurocash Group, the national leader in the wholesale distribution of food and other fast-moving goods (FMCG), increased by more than 3% y/y and amounted to PLN 4.76 billion.
• Gross profit on sales exceeded PLN 462 million and was more than 10% higher than in the same period of 2015.
• EBITDA, i.e. operating profit plus depreciation, amounted to more than PLN 47 million in the first quarter of this year, which means an increase of more than 13% y/y.
• Net operating flows in the first quarter of 2016 amounted to almost 100% of the EBITDA result, characteristic of the Eurocash Group in the longer term.
• The net debt-to-EBITDA ratio at the end of March 2016 was 0.5x compared to almost twice the EBITDA of the year before.
• The net profit of the Eurocash Group for the first three months of 2016 amounted to PLN 2 million against a net loss of PLN 3 million in the same period of 2015.

— In the first quarter of 2016, food and soft drink prices increased by an average of 0.4% year-on-year and this was the second quarter in a row when we saw a slight increase in prices. In the FMCG market, on the other hand, there is still strong competition from discounters. However, the Eurocash Group continues to support its small-format customers by building an effect of scale, which was supported by a 3.4% increase in sales. This growth was due to both stable organic growth and the acquisition of 50% shares in Rogala, which operates more than 60 franchise outlets in the Delikatesy Centrum chain (and consolidated by Eurocash since January this year). — said Jacek Owczarek, Member of the Management Board and Chief Financial Officer of the Eurocash Group.

The Eurocash Group recorded a significant increase in sales in the Delicatesy Centrum format. Wholesale sales to this franchise network increased by more than 9% in the first quarter of 2016, and in like-for-like terms, i.e. for the same number of outlets, the increase was 2.7%. At the end of the first quarter of 2016, the Delikatesy Centrum chain had 1,065 stores.

The “abc” chain of stores, i.e. the largest Polish chain of independent retail stores, whose organizer and main supplier is Eurocash Cash & Carry, at the end of March this year already numbered 7957 outlets, which means that in the first quarter it increased by 299 stores, and in the last 12 months (from April 2015 to March 2016) it was joined by 956 outlets.

— In the first quarter of 2016, we focused primarily on improving efficiency. As a result, both at the level of gross profit on sales and EBITDA, we recorded an increase in profitability, which resulted in a net profit of PLN 2 million in the first quarter of 2016 compared to a loss of PLN 3 million in the previous year. It should be borne in mind that in our business the first months of the year traditionally have a negligible share of the full-year profits, and the vast majority are earned in the following quarters — pointed out Jacek Owczarek. — As for the net cash flows from operating activities, in the first quarter of this year they amounted to PLN 47 million, which corresponds to almost 100% of the EBITDA result. In terms of cash generated, we therefore maintained the level characteristic of the Eurocash Group in the long term added a member of the board.

The Eurocash Group's net debt ratio in relation to the 12-month EBITDA at the end of the first quarter of 2016 was 0.5x, while the net debt represented almost twice the EBITDA a year ago. A significant reduction in debt, in turn, translated into a significant reduction in financial costs.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

Eurocash will acquire a 50% stake in companies owned by the franchisee, which operates 47 franchise stores within the Delikatesy Centrum chain. The total sales of these entities exceed PLN 270 million.

The stores in which Eurocash invests will continue to be managed by the current owner — Mr Marek Stodółka — on the basis of a franchise agreement with the Delikatesy Centrum chain and the rights and obligations of all franchisees.

The finalization of the contract requires, among other things, obtaining the consent of the President of the Office for Competition and Consumer Protection. The application to the UOKiK in this case was submitted on April 29, 2016.

— This is another transaction of this type concluded by Eurocash with the franchisee of the Delikatesy Centrum chain. The intention of these marriages is to provide our long-term partners with the means that, on the one hand, will provide them with financial stability and security, and on the other hand will enable the further development of their businesses. The Eurocash Group strengthens relations with customers having a significant impact on the development of the Delikatesy Centrum franchise network — said Jacek Owczarek, member of the board of Eurocash.

In the first quarter of this year, Eurocash completed the purchase of a 50% stake in Rogala Company, which operates 63 stores under the Delikatesy Centrum brand. Rogala's retail sales in 2015 amounted to approximately PLN 367 million.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 14 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.