Sligro to Unveil New Plan Amid Margin Pressures

Core Announcement

Sligro Food Group is set to reveal a new strategic plan aimed at structural margin improvements during its Capital Markets Day on March 5. This move comes as the company faces ongoing challenges in recovering its operating margins to pre-pandemic levels.

Financial Performance Overview

For 2025, Sligro reported an adjusted EBIT of €54 million, which was 8% below market expectations. Despite cost-reduction initiatives, rising operating costs offset minimal sales growth, resulting in a margin improvement of only 30 basis points. The performance gap compared to pre-COVID results remains significant.

Market and Shareholder Impact

Despite margin struggles, Sligro generated a strong free cash flow of €80 million in 2025. This financial strength, combined with low debt, prompted management to announce an unexpected €26 million share buyback program and increase the dividend to €0.50 per share. Analyst firm Kepler Cheuvreux has maintained a Hold rating on the stock with a price target of €10.50.

Summary and Outlook

Looking ahead to 2026, Sligro anticipates limited sales growth and only a modest increase in its operating margin. The upcoming strategic plan for the 2026-2030 period will be crucial for investors to gauge the company's long-term strategy for achieving sustainable margin improvements.

FAQ

Q: What is the main focus of Sligro's new strategic plan?
A: The plan focuses on achieving structural margin improvements for the period between 2026 and 2030.

Q: How did Sligro's financial performance fare in 2025?
A: Sligro's adjusted EBIT was €54 million, 8% below expectations, with margin improvement at only 30 basis points. However, it generated a strong free cash flow of €80 million.

Source: Investing.com