ADVEO reduces losses in 2017, despite stock issues
| 28 February, 2018
ADVEO reduced its losses by 34.5% in 2017 to €23.4 million, despite investing €12.3 million in logistics restructuring and organizational changes in Spain and France.
Revenues in the year totaled €490m, 9% lower, excluding the effect of the EOS repositioning. The drop in sales fall was mainly caused by low stock availability because of credit restrictions due to the long refinancing process, which was initiated in March and concluded in October.
This situation started to moderate at the end of 2017 and ADVEO said will stop having effect in the middle of 2018. It has affected all markets, especially Spain and Germany. ADVEO has worked on simplifying its structure and making management more efficient, which has allowed it to reduce structural costs by €15.5m.
In 2017 ADVEO has followed the roadmap established in the Strategic Plan 2017-20, aiming at transforming ADVEO into a platform of solutions, and laying the foundations for profitable growth, including a more efficient logistics and technological model, direct sales, own brands and a new value proposition for the retail channel.
In this sense ADVEO says it has successfully implemented its strategy throughout the year transforming actions that are already having positive effects. First, in the logistics transformation: after the agreement with ALC to outsource logistics in Spain, in the last quarter of the year ADVEO signed an agreement with Italian company C2U to outsource operations in Italy.
In January ADVEO closed the sale process of subsidiary ADVEO France warehouse in Compans (Paris) with IDI Gazeley for €8 million. At the same time, following the plan of efficiency established for ADVEO Germany, on February 12th the company started negotiations with union representatives to close the warehouse in Winkelhaid.
Once the refinancing process has been completed, ADVEO will progressively return to its level of stock availability throughout the first semester of 2018, that will allow sales volumes to recover, while new business lines (direct sales and own brands) gain importance. At the same time, as a result of the efficiency measures implemented in 2017, the company will keep on reducing operative costs.