How does the business engine Ladybugs? The largest Polish shop of facilities – Gazeta.pl

More than 10 billion turnover

Ladybug in the second quarter was nearly 2.4 billion revenue. Ie 10 and a half billion. Up 10.2 percent from a year ago. Dividing it 2,693 stores and 91 days of the second quarter leaves us an average of more than 40 thousand circulation in every store, every day. Sales increases because Poles are more and more money (bows to the increase in income caused by the program 500 plus). The owner of Biedronka – Portuguese Jeronimo Martins in his report mentions that as many as two times

Source: Jeronimo Martins

operating profit Ladybugs (the so-called EBITDA) in the second quarter reached 176.3 million. The so-called EBITDA margin to 7.4 percent. At first glance it is not very effective, but for a lot of retail industries. For comparison: Orlen in their part of the retail (petrol stations) had in the last quarter retail margin of 5.8 percent.

Business niskomarżowy

From the operating profit you have to deduct the cost of credit and taxes and net income comes out. Jeronimo Martins does not give him a breakdown by brand. For the whole of the Portuguese group the profit is 99 million. Here, the net margin is only 2.8 percent.

Ladybug as many as two-thirds of total sales and 84 percent of the total operating profit of the group Jeronimo Martins, so you can assume that the net profit vast most of it is worked out in Poland. Probably also in terms of net margin Ladybug no different from the rest of the group.

So this is a business where a hundred zlotys paid by the customer at the cash register at the end of the company is barely 2.80 PLN. It is characteristic of the entire retail trade. Here earn money by maximizing turnover. Margin will not happen, because there is too much competition. So if the margin has to be small, to earn a lot, you need to download it as often as possible. Hence the emphasis on the rotation.

Rotation capital, that is the crux of the matter

In this situation, the key is what we see in this passage the report Ladybugs

Source: Jeronimo Martins

This is the so-called rotation of working capital, which is the very heart of the retail business. We see that the rotation of stocks (inventories) in Jeronimo Martins is 17 days. So, the time that elapses from the moment of receipt of goods from a supplier until selling it at the checkout the customer with an average of 17 days. Below you can see the rotation of liabilities to suppliers (suppliers). It is 58 days. This is the time that passes from the moment in which Jeronimo buys the goods from the supplier to the point where he for the goods actually pay.

So we have a situation in which today, ie July 28 shop receives goods from a supplier. For example, the range of mineral water. Sales of her and zainkasuje money from customers to August 14 (17 days from now). But the money for the supplier palette splashed water until 24 September (58 days from now).

What happens between August 14 and September 24? Jeronimo has the cash and can be spent on additional purchases of goods further. So zatowarowuje yourself shops for money suppliers. What’s more, before you pay the provider can do so twice (goods out in 17 days. 17 days times two is 34 days, and pay suppliers after 58 days). So does this industry.

Suppliers and so pays

For retail networks is how long they can keep the money at home due to suppliers is a key parameter of business. And this time, of course, depends on how much the supplier agrees. Nobody no partner Ladybugs not forced to force this to wait for the money two months. They go along with that. First Ladybug is so large network, so that it can sell a lot. So they wait, although two months, but pretty good money. Second is the issue of credibility. Market leader can dictate tough terms of cooperation, but in the end pay. This is a better solution than the network less and less credible, which declares that it will pay the month, but then again you pay a once does not pay.

Networks that force resulting from the number of customers and sales volume can translate into favorable for themselves the form of settlements with suppliers win. Others – not necessarily what this year showed Marcpol.

Jeronimo Martins this year invested in Biedronka 77 million. Throughout the year there is going to spend 250 to 290 million. There will be additional stores Biedronka, where their goods will want to sell the crowds suppliers. Not everyone on the shelves get. Those who achieve this will be waiting for the money for the goods two months, but it will be a good business for them.