El Corte Inglés reports revenue growth in 2021
What: El Corte Inglés Group reported revenue growth of 21.93% to EUR 12.51 billion in 2021.
Why it is important: They also saw an increase in Q1 2022 performance topping that of Q1 2019. Growth was driven by healthy business momentum, cost streamlining, and good management decisions, putting the Group back on the growth track and leaving it profitable. Despite the difficulties caused by successive Covid variants, the lag in the recovery in tourism, the challenging economic environment, and the unprecedented surge in energy prices.
El Corte Inglés Group managed to post a gross profit of EUR 3.9 billion (year-on-year growth of 30.5%), EBITDA of EUR 804 million (growth of EUR 756 million), and a net profit of EUR 120 million. The retail business was the growth engine, accounting for revenue of EUR 11.3 billion, underpinned by a strong recovery in fashion, where sales increased by close to 49% from 2020. Online sales also fared particularly well, accounting for 12.3% of total department store sales.
The Group’s healthy earnings performance accompanied by well-executed cost-cutting was rewarded by the main rating agencies, which raised the outlook for the credit ratings assigned to El Corte Inglés to just below investment-grade status. Their assessments were further buoyed by two significant developments: repayment of the first EUR 600-million notes issue, in March 2022; and the refinancing agreement reached with the Group’s pool of banks, for up to EUR 2.6 billion, ushering in lower costs and more advantageous terms equivalent to those fetched by investment-grade issuers.
Thanks to growth in operating cash flow, the Group had reduced its debt to EUR 3.51 billion at 28 February 2022. Having since closed the transaction with Mutua, debt has come down significantly further, to stand at a 15-year low of EUR 2.56 billion.