Hello everyone. On behalf of Saham Capital Bourse, we welcome you to the LabelVie 2025 full year earnings call.

My name is Karim Barhoum, Equity Analyst, and I'll be your moderator for today. This conference call should last approximately 1 hour, starting with the management presentation followed by a Q&A session.

The earning release and today's presentation are both available on the company's IR website. You could either submit your questions through the chat box or raise your hand to speak.

Please note that this presentation will be recorded. The replay will also be available on the website.

We are delighted to be joined by three presenters: Ms. Naoual Benamar, CEO of LabelVie Group, Mr.

Hamza Bennani, CFO, and Mr. Soufiane Dada, Head of IR.

Without further ado, I will leave the floor to Mr. Soufiane Dada, Head of IR at LabelVie to start the earning call.

Soufiane?

Hello everyone. I'd like to thank you for your time, and I suggest we start with the macroeconomic context with our CFO, Hamza Bennani.

Thank you, Karim. Thank you so much for organizing this this call.

Without further ado, let's maybe start with the with our summary with the with the of today's presentation. We will start today with our macroeconomic clear view about our macroeconomic, and then discuss about the highlights of the year before moving on to the financial results, and then give you a brief overview of the outlook.

Without further ado, the regarding the macroeconomic, after 2 years of declining consumer confidence, we we saw an enhancement of that consumer confidence index starting the year 2025, that which has resulted in an improvement of almost 11 points compared to the levels of 2024. The recovery is continuing, and as we can see, the GDP has has also been has also known a sharp increase overall compared to 2024 numbers, finishing at an approximation of 4.8% increase versus the 3% of 2024.

According to several statistics, we expect GDP to be around the 4.6% level thanks to an improvement of consumer spending and driven by also quite an unusual agricultural season. Moving on to the next slide, let's address the highlights and the key achievements of 2025.

Regarding our development, this year we're able to add 18% of additional floor space, which is an exceptional year for LabelVie, which counts a net number of 55,300 square meter of additional sales area, which was opened across all the formats of activity. The biggest increase was concerning Supeco with 20,000 square meter representing 130 stores, which have been added this year, which is a record number.

It's a it's also a record number for the hypermarket also format, which knew three three stores which have opened. We'll we'll discuss them later on with 13,000, which brings a total networks of 16 stores hypermarkets as of today.

The Carrefour Market and Carrefour Express knew 6 and 5 openings this year, we're ending the and while the Atacadão knew four additional stores for 23-store network as of 2025. Today, LabelVie at the end of December counts 411 stores or 362 so 363,000 square meter of additional space.

We can move on the geographical distribution network. We're continuing to increase our footprint throughout Morocco with four new cities which which have opened, which are in the east and in the south of Morocco.

It's those are mostly empty white spaces where there is no other modern retailer over there. We can count those southern cities like Guelmim and Laayoune, for example, which don't have don't have for for a lot of them a presence of any modern player.

This big also the also big highlight is also the opening of Supeco outside the the the great Casablanca. Supeco is now established in the corridor or of Rabat, Salé, and Kénitra, which is one of the main consumption hub in Morocco with an increased as well geographical presence, which is expected throughout 2026 as well.

Moving on to the next slide, a quick focus here on on the Carrefour hypermarket presence in Casablanca. We opened the year as we opened 2025 three stores: one in Almaz in the southern part of Casablanca, one in Zenata, which is the north end of Casablanca, and one in Aïn Sebaâ in a mall which is anchored right in middle of the city in industrial and which is now gentrifying with high density area.

Those are three formats that we opened three stores that we opened within a 1-month period between November and December of last year, in quite a good traction so far since the opening. We also did a bond issue of 1.5 billion dirhams this year.

That's through a private placement with qualified investors aimed at optimizing our financing cost. As you can see from from there, our we have been optimizing every year our cost of financing through the use of bonds, which has a spread which is decreasing every year, and we're optimizing through through the bonds versus mid-term loans with with higher interest rates.

We have two types of of tranches: one with 5 years, one with one with 7 7 years. We've been realizing it with an average rate of 3.06.

A quick word maybe on our CSR and ESG achievements of the year. I'll let our GM, Ms.

Naoual Benamar, who present that.

Hi everybody. A quick update on this topic.

We continue our work to reduce the food waste, and we reduced 50 tons of the food that has been saved in our stores. The waste management has been a good priority for our stores this year also, and we managed to improve our reduction by 11%.

We continue to invest heavily on the development of our people, and we managed to reach approximate 7,600 people on the training part to make sure that they increase their technical skills mostly, but also soft skills to continue grow in the company. We managed to get through new partnership because we continue to team up with many universities and school to continue to drive our recruitment from a good source through the Moroccan regions.

Energy efficiency, we managed to get 5% improvement versus our plan, and we continue to work heavily on the inclusion in our employment. We continue to have our activity, and we managed to integrate 100 new people coming from different horizons on that aspect.

We continue also our work to be present for the Moroccan community, and we managed to get 50,000 food product donation through the part that they need it for the last year. Next?

A quick word now on the operational and financial achievements for the year.

Important to recognize that we managed to get about 13% improvement on our revenue. We managed to get our space increase by 18%.

This has been driven mostly by our frequency in the stores. We managed to get 93 million tickets in our stores as a visit, 22% more than last year.

In our EBIT, we managed to get 10% more, with 1 billion 5,000 EBIT 1 million 5,500 5,000 5-7, and with an increase also for our net income with 6%, while investing 1 billion 200 million dollar dirham CAPEX and continue to improve our financial results, the same performance like last year, while not getting any one-off in our base. If we have a look by business unit, the hypermarket managed to get a sales growth by about 10%, while the organic growth is 4%, and we have a number of stores is 16%.

When I go to the supermarket, we managed to grow the top line by 6.7%, driven mainly by the opening that happened in 2024 and 7-5 0.5 on the organic part of the business. When we go to the proximity Express stores, we managed to grow this business unit by 15.4%, while the organic is plus 10.5, and we continue to grow our number of stores, it's 75 stores on that business unit.

Supeco, what we have to recognize is we managed to get 400 million dirham this year and an additional more than 200, I think 80 million, more than the last year, we continue the expansion. Our stores moved to 280 stores this year, we continue our plan to expand on the soft discount.

When we go to the Atacadão, strong performance, plus 16.8% 16.8% growth versus last year with an organic growth of plus 4.8%, and our stores now is 23 stores overall over Morocco. This brings the total performance to 15.8 billion dirham with plus 13.7 on the organic sales with an organic sales with the total sales with an organic sales at plus 3.5.

You can go? If we go by business unit, if I go to the Carrefour Hypermarket, as you can see, the plus 4% and the plus 9.8%, and you can see that the half year 2 was higher than half year 1, driven by, first, very solid performance on the fresh products.

We continue to be destination for our consumer on the fresh part. We increase also the penetration and the weight for the promotional activity without impacting the bottom line with our program to optimize the investment and to get it more efficient while increasing the penetration.

The continue of the growth of the e-commerce and the loyalty program that help in us to also reinforce our organic, but also our total growth. Also this year we have seen a very good performance on the non-food categories that really drive the frequency on the stores.

If I go to the supermarket business, plus 0.5 on the organic sales, plus 6.7 total sales that has been driven by the 285 million dirhams that comes from the opening. This business unit is really under pressure from the competition around each stores, from our proximity, competition proximity, the discount for our discount, the competition also on the discount.

It's a very heavy competition on the supermarket while we continue to drive the growth on 0.5 despite the challenges. As you can see, the half year 2 also is coming greater than the half year 1, the trend is very reassuring that we are on trend to continue growing.

Also fresh also was very good, and this performance is also driven with a very high level of frequency. We have seen also a shrink on the total spend by ticket.

Everything has been really driven by the frequency on our numbers. When I came to the Express, we managed to get a 10.5 organic growth and another 5% incremental on the opening that bring the business unit at plus 15.4%.

As you can see, the second also half is greater than the first one. We continue to revamp our concept, the work we have done is bringing really a confidence on our recruitment on that concept.

We are increasing the number of consumers, and we managed to get a strong service and assortment that really help us to be more solid versus consumers. Supeco, what is important is what I have been telling in the beginning is the half year 2 when we have seen the most part of the opening that is happening on the last 2024, and also what we have opened on half year 1.

We continue increase the business between periods as we are going steadily on opening stores every single month. This concept, what I can tell, that is under control from a top and bottom line, we are in line with what we have put as a business plan.

We are very confident that this business will continue to grow steadily, but also to answer the needs from its role, which is protecting the LabelVie from the bottom line on the consumption, but also to continue to be in playing its role on our profit portfolio. When I came to Atacadão, the opening was great, and it's accelerating the top line, but also bringing 4.8 in a market that didn't manage to get even more than 1% from a consumption point of view.

I'm talking about traditional trade is amazing. We continue to have a strong concept that continue to drive the top line.

When we go through the analysis of the concept, when we go to the big stores, it's really performing. When you go to the semi-rural cities also, it was a very strong performance.

This proven that our choice of opening the in semi-rural, but also continue to project on the new big city new stores, it's working, and our numbers are proving it.

Moving on to the contribution by format, we see that the Atacadão is the largest contributor in terms of retail sales top line in 883 million dirhams total out of the 1.9 billion dirhams that have been added from 2024 numbers. Atacadão is followed right after by the contribution of the hypermarket format by 343 million dirhams due to that strong performance on a like-for-like basis as well as the 2024 openings, which have been contributed to the overall.

As a quick recall, 2024 saw an opening of a store in Beni Mellal. Carrefour Market also saw a strong contribution of 300 million dirhams coming mainly from the 2024 openings as the openings that were performed last year have been occurring mostly at the end of the year.

Supeco right after with the 133 stores which have opened plus the 2024 figures have accounted for 291 million dirhams. In terms of contribution of EBITDA, the gross margin has added about 423 million dirhams, while the OPEX has actually decreased or shrunk basically our EBITDA by 278 that has resulted in EBITDA of 1.5 1.5 or 557 million dirhams total, which is actually quite a big performance with a strong actually change in the mix of the formats of activity.

We have seen it earlier, the contribution of the Atacadão and the Supeco formats has been significant in 2025 compared to their historical level, while the contribution of the Carrefour Market and the Carrefour Express and as well as the hypermarket is decreasing this year. The financial result is also stable compared to last year, which saw a one-off event last year.

We had a cash out of 49% stake of Terramis, our REIT, OPCI, in 2024, which hasn't been the case in 2025. Despite that one-off, the financial result is quite strong, and it's mainly due to the optimization of the cost of financing as well as several income as well from dividends as well as other financial income, which were performed throughout the year.

Moving on to the P&L, you will have it in our presentation, but we can skip that slide. Regarding balance sheet, we ended 2025 with 40 days in terms of treasury overall with net financing debt of 6.3 billion dirhams, representing about 142 days, but more importantly, a net gearing which is quite stabilized at 54% overall versus the 53% last year.

Without further ado, let's speak about the outlook for this year and the next ones.

Let me remind ourselves that we are in a force of realizing 28 billion dirham with an EBITDA of 9.3 while investing 5.3 and opening an additional 774 stores between 2024 and 2028, while preserving all our profitability ratio and financial balance. Let me perhaps show where we are versus this ambition.

If I take the stores that we realized over 2025 and I travel with it until 2028, you can see that 80% of our plan is secured today, which is 22.4 billion dirhams that comes from this existing 411 stores. What is missing is the 20%.

The 20% is 5.4, and realizing it in 3 years, we are confident to manage it because we still have a good plan to open. We still have also the performance that will be coming from all the plan that we have in place, from an optimization productivity plan, our plan on the opening stores by format, and also all the fundamentals that we are putting in place to secure a sustainable growth over time.

We see ourselves in place, we are half-time. Within half-time, we have 80% of the vision secured.

We still have to concretize the last 20 that we have the 3 years to manage it in. In summary, for 2026, we will continue to accelerate from the same strategy.

Continue to grow our organic stores, continue also to open on the five formats, continue with the same vision we have put on 2028 on our EBITDA margin. The board has proposed 120 dirhams, which is 8.5 higher than the last year for dividends.

This is it from our side, and let's open up for your question. We are at your disposal to answer your question.

Thank you, Ms. Nawal.

We're open for questions. Please feel free to write your questions in the chat or raise your hands to speak directly.

Thank you. I think there is a first question from Mr.

Mark Lawrence. "What is the 2026 outlook for the Moroccan consumer?

What are you seeing in terms of footfall and LFLs so far this year?"

I think the confidence is growing in Morocco when we have [unclear] is happy. This is first thing from an emotional point of view, but in numbers, we project 4.6% PIB growth, and we think that it will be impacting mostly the food part on our business.

We feel confident on the numbers that the government has shared, and the start is already a good start. Expecting to have a good macroeconomic help to get more consumption in Morocco.

Thank you.

Maybe regarding the cash flow if I may?

Yes, go ahead, please.

The cash flow definitely we reached a quite significant level of CAPEX in 2025 due to the sharp increase in acceleration in development, as well as assets which ended their securitization. In addition to the CAPEX that was actually spent in 2025, we had also an additional almost 500 million dirhams worth of assets which ended the securitization, which will be resecuritized this year, which may explain the negative cash flow in 20 in 2025.

The outlook is definitely is going to be different for 2026 due to that resecuritization for a higher amount, because we're going to add all the assets which were completed last year and the year before with new securitization fund, which is going to be roughly about 30% higher, a level of almost 700 million dirhams worth of CAPEX, plus also a CAPEX which will be slightly lower. Nawal presented earlier the 40,000 square meter of additional sales space that we need every year versus the 55,000 that we have completed in 2025.

We're also expecting a level of CAPEX which is going to be slightly lower this year to end a year with a top line of between 10 between 10 and 15% higher top line as well as total sales area increase.

Let me perhaps answer the question of the discounters. Let me remind an important element.

Morocco is 20% modern trade and 80% traditional trade. When you take Supeco and you take Atacadão, Atacadão, 100% of consumption is coming from traditional trade.

It's a kind of conversion or a structural way that traditional trade is consuming. This is Atacadão, who is converting for us the potential from traditional trade that we were not reaching with the other format.

Supeco is a model between that is trying to educate the consumer that they are partially or fully consuming from traditional trade to move to a different level. If I take my vision of 2028, the 28 billion, what we have put as a assumption, half of the consumption will come from recovering market share from the existing, and half of it will come from converting traditional trade through the other part of our strategy of multiformat.

Are we limiting things? No, the only thing that we are doing, we are trying to answer the need of the consumer wherever is consuming.

We'll put with our plan wherever is needed from a store point of view/format point of view to answer the need of the consumer. No limits from our side.

Perhaps one important point that Hamza didn't cover of the cash flow, we have this average that you have seen as the cash flow is going through many seasonalities. The seasonality of the end of the year, there is two two element.

We buy, as we open the store at the end of the year, we buy for the store what we didn't yet sell because of this end-of-the-year opening, and also because of Ramadan is moving now the 20 February. We buy always many categories much before Ramadan, it's impact in that has been bought on December that is a move versus last year that happened in January last year and it's happening in December this year.

These two element is largely compensating the variation that you can see. If you analyze our number of cash flow days, it's varying depending on the seasonality, but in average, it's on track and it's always 2-3 days around 30 days, plus minus 2 days.

I see "Any data you can share on market share trend? How is BIM doing?"

BIM is doing very well. We continue win shares.

I don't have the last numbers, but I have the numbers of November. We managed to win 1.5 share point over the last 12-month rolling.

BIM is now I think 16 or 17%. We are about 38% without counting Atacadão.

I'm talking B2C business, while the largest losing on this equation is Marjane, they lost 2.5. We are resistant to what is happening.

Discount is really going to get more market share, and we continue to develop our strategy that is working and protecting our business while continue to grow market share on the B2C. The B2B is incremental to the reading.

If I put it approximately, we are the number one by far and we are more than 50% total sales on the non-alimentary on the total volume of modern trade.

We have a question over the microphone. Please, you may go.

We take microphone and there is...

Wissam Abu Shaba, [unclear].

Sorry, go ahead.

Can you hear me?

Yes.

Can you hear me?

Yes.

Wissam Abu Shaba, Attijariwafa Bank. I have three questions.

First question is regarding growth. Can you give us an idea of the normative level of like-for-like growth for the group, if it's a GDP plus something or minus something?

Also, can you give us an idea on growth, can you also come back on the different levels of like-for-like growth per segment, because the Express was at a level much higher than the other ones, and if there's an explanation for that? Then I have a question regarding e-commerce.

Can you give us an idea what represents e-commerce in the total mix of the revenue of the group? Then one question regarding EBITDA margin.

You made 9.5% this year, you're targeting 9.3% for '28. Also, what kind of level of EBITDA margin do we have per segment, and if there are some potential earning surprise regarding the level of the EBITDA margin by '28?

Thanks.

Let's go to the organic growth for our group. Have shared it's 3.5% that the total organic growth that realized 2025 versus 2024.

This is your first question. Let me go to your second question.

Soufiane, the second question?

No. My question is to have an idea of the normative level of growth.

In Morocco? We expect...

No, no, no, GDP...

GDP, yes, I think between one Between 1 and 2%. We don't have the real numbers, but the numbers we're getting from our big suppliers on the category we are playing, it's between 1 and 2%.

With this 3.5%, we definitely grow share. This is the reconciliation we have

done with

our pool of suppliers.

My question is to know, is it something that we can have for the next years, 3.5% like-for-like growth, or can we expect more than that for the next years?

We hope more.

All right. My second question was regarding the e-commerce business.

In the B2C business, the e-commerce is about, I think, 3.5 to 4%. This is the total business of our e-commerce on the B2C part, excluding Atacadão.

If I exclude the Atacadão top line and I put the e-commerce on the total business, it's 3.5 to 4%. I don't have the exact number by the end of the year.

Maybe I could...

Okay. Do you have also an...

The Express

or

was it your question regarding the Express as well, right, Wissam?

Yes, exactly, yes.

Express, the 10.5% resulted from a lot of efficiency at the store level in order to improve the offer of the store, but also the pricing strategy of those formats, which some of them saw let's say some other BIMs open nearby. Hence, we adjusted the prices of some sensitive goods, which has resulted in increased traffic and volume across those formats of stores, which have led to that 10.5%, which is quite exceptionally indeed.

We correct the 4P to make sure that we continue to be next to the competition and to continue to grow, and we add more services. We give you our plan on the services we are offering to the consumer to create differentiation versus competition.

Those two two choices works very well and bring a very nice top line growth.

Regarding the EBITDA question... Just

and and and regarding...

Go ahead.

Sorry, Hamza. Just regarding the Express business, this like-for-like growth, would be a reason for you or something that would help to see more openings of Express in the next years?

We will be opening more stores, but let me remind the strategy. We are trying, we have a system on the back office to really study every single opening and for every single format.

The most important thing I have to open...

Excuse me, we can't hear you. I think there's a problem with the microphone.

You can't hear? I'm sorry.

Can you hear me now?

Yes, much

better.

Okay. What I'm trying to explain that every store opening is a study to tell ourselves what is the best format for this place.

We will be opening based on the consumer profile that it's need to be opening. Sometimes we need two format in the same area, sometimes we need three format, sometimes we need one format.

We are doing a lot of data in the back office to optimize our opening and to continue to grow. Our plan, yes, we will still continue to open on the Express wherever there is need.

Yes, we will be continuing to expand on the format, and the plan is to expand on the five formats.

Thank you.

I think we cover all your question. I will go to the written question to try to answer.

There's only one question regarding EBITDA, the question regarding EBITDA margin.

We can...

The EBITDA, the question was what's the level basically going in 2028. We forecasted 9.3%, which was a level in 2024.

We found that this is going to be reasonable or reachable thanks to the volume which is increasing every year, but also to all the synergy and economies of scale, which going to be performed throughout the year. Going forward, the 9.3% is a level that we feel confident to sustain despite the high number of new stores as well as the mix format, which is also in the favor today of the discount formats.

Thank you.

Volume and mix, we are managing this mix between volume and pricing, and we are putting a plan every week to readjust and to push to make sure that we have a positive equation. Sometimes we will have to push for volume because we need to win more marketplace, sometimes we have to do the both.

It's not a coincidence. We have deflation in some categories, we have inflation in some categories, and we have all necessary activity system to manage this equation to make sure that it's not impacting our margin and also our volume.

I don't know if it answers your question. "Could you please provide some insights into..."

Both evolve. In some format, back margin, in some, front margin.

We are putting both them to create more value for the different format. We have a separate plan for each one to create the incrementality pending the format.

"Target of 2026 opening stores?" We are targeting plus 10 to 15% additional surface for 2026.

Yes, and the presentation is available on our website and has all the details if needed.

I think there's one more question, Tien: "What is the normalized EBITDA margin for Supeco longer term, given..." Yeah.

Go ahead. Yes,

thanks for the question. Yes, regarding Supeco, we are in a format that is quite new, and today the weight of the new stores is quite significant.

A store normalizes anywhere between 2 and 3 years with our increased volume. We should definitely expect a better EBITDA margin.

As a recall, BIM was actually loss-making for 8 or 8 or 9 years until it reached

15 years in Morocco.

Until it reached 600 or 700 stores of today. The big advantages as a quick recall for LabelVie is that all the central function and central office is actually shared with the rest of the business units.

Hence, Supeco can be profitable much quicker and is already profitable. This is a great news with only 200 or stores.

We are expecting a normalization year after year, but this is going to be steady across the format. As next year, we're expecting a higher number of stores to be opened versus the 130 stores which have opened in 2025.

If there are no further questions, this would conclude the call. Thank you, everyone, for attending LabelVie 2025 earnings call.

The replay of this conference will be available on the group's financial communications website. Thank you, Ms.

Nawal, Mr. Hamza, and Mr.

Soufiane. Thank you, everyone.

Thank you.

Thank you, Karim,

so much. Thank you, Saham Capital Bourse,

for

hosting this call.

Thank you, everybody, for

your

attention and your question, and hope we see you in person in the next round with us in the next earnings. Thank you so much.

Bye, thank you.

Thank you.