Operational review for the six months ended
• Customer confidenc
31 March 2018
- The negative press surrounding the Group
influenced customer behaviour, and during this
Introduction
period enhanced communication was required.
This was specifically relevant to made-to-order
The Group delivered revenue of €9.3 billion (1H17:
furniture customers (for example kitchens,
€9.9 billion) for the six months under review.
upholstery and other large furniture items), as
Operational results were severely impacted by the
these products have a long lead time and require
Steinhoff events and a difficult general retail trading
customers to pay a deposit upon ordering.
environment (described in more detail below). The
These transactions were under pressure as a
Group reported positive EBITDA of €45 million, but
result of the uncertainty surrounding the stability
an operating loss before capital items of €152 million
of the Steinhoff Group.
for the six months under review. Excluding certain
• Margin and cost management
one-off items, the Group managed to achieve a
positive EBITDA of €340 million and operating profi
- Margin across the Group has also been
of €143 million for the six months under review.
negatively impacted by the lower trading levels
Steinhoff events
and additional one-off costs such as professional
fees.
Due to the events at their parent company,
operational management faced additional challenges
In the household goods business, store openings and
and incurred extraordinary costs. These challenges
capex projects were put on hold. Business plans of
include:
all the operations have been thoroughly interrogated
and management has been tasked to focus on
• Liquidity management
profitability, cash flow, inventory management and
overall cost reduction.
- Raising working capital facilities at operating
entity level to replace Group treasury funding,
Difficult general retail trading environment
supported by weekly cash flow projections and
In most of the territories where the Group operates,
reporting.
operational divisions have experienced difficul
- Change of operational processes resulting from
trading environments resulting in reduced store traffi
reduced supplier credit.
footfall and a decrease in store profitability during
the last number of quarters. The trading environment
- Active engagement with suppliers and credit
was influenced in the various geographies by low
insurers to substantiate and maintain the limited
economic growth rates, increased competition
available credit lines.
and overtrading, the impact of online retailers and
customer indebtedness.