El Corte Inglés has closed the 2021 financial year with a consolidated turnover of 12,508 million euros, which represents an increase of 21.93% compared to the previous year. It is a turnover that is still far, however, from the 15,260 million euros that it billed in 2019, before the pandemic, although also taking into account that they are not comparable figures because they do not include the sales of the Insurance subsidiary after the takeover by Mútua.
This improvement is determined, according to the group, by “the good evolution of the business, the optimization of costs and the successes in management, which has made it possible to recover the path of growth and return to profits despite all the difficulties that have entailed the successive variants of the Covid, the scarce tourist recovery, the complex economic context and an unprecedented escalation in the price of energy”.
El Corte Inglés, which is immersed in a commercial restructuring plan that has entailed, has reached gross profit of 3,896 million euros, which represents an increase of 30.5% compared to the previous year; ebitda stood at 804 million euros (756 million more than the previous year), and a net profit of 120 million, compared to losses of almost three million the previous year.
The retail sector
The engine of the recovery has been the retail business, which has achieved sales of 11,300 million, with a significant recovery in the fashion area, whose growth stands at almost 49% compared to 2020. The good performance of the online sales, which already represents 12.3% of the total volume of business in department stores.
“This positive evolution has been possible thanks to planning carried out in advance to guarantee stock availability, especially in the Christmas season, as well as efficient negotiation with suppliers, better purchase planning, and limited exposure to acquisitions in Asia,” says the company.
Within retail, fashion has experienced notable growth, achieving a sales figure of 4,090 million euros (48.8% more than the previous year). There has also been a strong evolution in sales of home and household appliances (11.3% more) which have stood at over 1,302 million, as well as the area of culture and leisure with an increase of 11.5% and a figure business of 2,145 million.
Food and travel
In the food area, the exceptional moment experienced by the sector in 2020 has been corrected, placing the sales volume at 2,648 million, which represents a slight decrease of 4.8%. El Corte Inglés also highlights the significant improvement of Viajes El Corte Inglés despite the persistence that the effects of the pandemic have had for much of the year. Sales in this area have reached 984 million euros, with a growth of 218.6% over the previous year.
In the Insurance area, activity has maintained an upward trend with revenues of 217 million euros (2.8% more than the previous year) and an ebitda of 98 million, representing an increase of 5.4% . The company explains that, signed already in the 2022 financial year, it will allow El Corte Inglés customers to be offered a better, more complete and personalized insurance offer.
investment grade
The positive evolution that the Group has maintained throughout the 2021 financial year, as well as the optimization of costs, has been rewarded by the main rating agencies that have improved their perspectives on El Corte Inglés, placing them just one step away from investor grade. This recognition has also been accompanied by two significant events: the settlement of the first bond issue for an amount of 600 million euros and, already in March 2022, the refinancing for a maximum aggregate amount of 2,600 million euros carried out in the format of investment grade, lower cost and better conditions.
On the other hand, and as a result of the higher operating cash flow, in 2021 there has been a reduction in debt, which at the end of the year stood at 3,514 million euros. Following the signing of the agreement with Mutua, the debt again registered a sharp decline, remaining at 2,555 million euros, the lowest level in the last 15 years.
The cost of the ERE
El Corte Inglés allocated to the accounts for the 2021 financial year the cost of the Employment Regulation File (ERE) that it signed in March for 3,292 people. The impact on the accounts reached 113 million euros, which gives a dismissal price of 34,325 euros.
It was not the only extraordinary expense that he had to face. 68 million was also recorded for the pending payment to Adif for the Castellana site, another 84 million for the tax on large areas in communities such as Catalonia or Asturias and 85 million for the first installment paid to Dimas Gimeno for the purchase of his shares.
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