EG Group EBITDA falls to $345m in Q3 following Asda acquisition
The cash consideration from the sale of the business to Asda generated $2.5bn (£1.9bn) which have been used to repay the group’s debt
EG Group, the global food services and petrol forecourts operator, has revealed that its EBITDA dipped 18% to $345m (£272m) in Q3 2023.
The group attributed the decline to the impact of lower fuel volumes and a competitive environment in the quarter, as well as comparisons with the exceptional fuel market conditions in Q3 of 2022.
Group revenue also declined to $7.6bn (£6bn) in Q3, compared with $8bn (£6.3bn) in the same period in 2022.
Despite this, during the period the group has said it continued to deliver against its deleveraging strategy and to repay and reduce its total debt.
On October 31 2023, EG completed the sale of the majority of its UK & Ireland business to Asda generating a cash consideration of $2.5bn (£1.9bn). The proceeds have been used to repay almost $4bn (£3.1bn) of the group’s debt and significantly reduce net leverage.
At a group level, grocery and merchandise continued to perform well, with gross profit increasing by 2.8% for the quarter to $376m (£296m). In the UK&I and Continental Europe, grocery and merchandise gross profit for the quarter increased by 12.8% and 5% year, respectively, due to higher sales and a strong focus on product mix and investment in new sites across both regions.
The group’s foodservice gross profit increased by 24% to $221m (£174m) for the quarter, boosted by increased sales activity and improved margins across UK&I and Continental Europe and driven by increased footfall, particularly across the Benelux region.
On November 13, the group agreed a deal to purchase Tesla’s latest ultra-fast charging units for EV point, EG’s proprietary, ultra-fast electric vehicle charging proposition, across the UK and Europe. This will further enhance the group’s EV point roll out proposition, in line with the ambition to roll out up to 20,000 chargers across 3,600 of its existing petrol filling stations, as well as third-party locations, over time.
Zuber Issa and Mohsin Issa, CBE co-founders and co-CEOs of EG Group, said: “We made significant progress in the quarter with our deleveraging strategy and putting in place a sustainable capital structure for the medium to long-term, following completing the sale of the majority of EG Group’s UK business to Asda on October 31, 2023.
“As we enter the final weeks of the year, we would like to thank our colleagues for their continued commitment and dedication to EG. We remain focused on executing our proven and successful strategy to create multi-purpose convenience retail sites across our international estate.”