Performance Bol.com remains secret for fear of Amazon

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The top of the Zaanse concern has strongly considered the success of its fast-growing web store in recent months.

That should have boosted the troubled share price of Ahold Delhaize. Nevertheless, the performance of Bol.com remains hidden.

Like other web stores, Ahold Delhaize fears the launch of Amazon in the Netherlands, probably this month already. It does not want to make Americans wiser. That’s what sources around Ahold Delhaize say on condition of anonymity. The company itself, which will publish annual results tomorrow, does not want to comment.

The performance of Bol.com is a mystery for investors and analysts, because they are hidden in the results. As a result, the financial world sees Ahold Delhaize as a supermarket company, with a price-earnings ratio that belongs to this sector.

Web shop ratings are generally higher. Their rapid growth makes investors mouth water, even at the expense of profitability. “In London and New York they don’t understand how big Bol.com is here,” says an initiate. “As a result, the performance of Bol.com is insufficiently reflected in the valuation of the Ahold share.”

Loss of face

The fact that Ahold previously shared few figures also had to do with Amazon, sources around the top say. “We thought: if Amazon sees how much money Bol.com earns in the Netherlands, they will be there tomorrow.” In Germany, the Americans now hold almost half of the market.

With the American web giant finally starting in the Netherlands, Ahold does not want to risk losing face, says an investment banker who wants to remain anonymous. “The question is whether Bol.com can win from Amazon. If Ahold were to emphasize Bol.com’s performance now, it would make itself vulnerable. What if things don’t go well later? ”

Ahold Delhaize is warming up in more ways for the arrival of the web giant. Bol.com is also going to sell women’s and men’s fashion, the Dutch newspaper revealed the Financieele Dagblad in November. Just like ‘everything store’ Amazon. Since last week, customers can buy clothing from brands such as Zeeman and Claudia Sträter.

Commissions

In addition, from March onwards, commissions will be lowered that entrepreneurs pay if they sell their products via the Bol platform. As a result, the supply must grow and the web store can compete better with the range of Americans.

More openness about Bol.com could give the Ahold Delhaize share a welcome lift: those who bought 100 euros of shares in the supermarket group at the start of 2019 are now only 6.24 euros richer – including dividends. In the AEX the same amount yielded more than 31 euros, in a European retail index even more than 37 euros.

A higher rate would better protect Ahold Delhaize against activist shareholders and unwanted takeover attempts. Moreover, the top of the company receives a higher bonus if the stock pays better than the competition.

Own stock exchange listing

That is why Ahold Delhaize considered selling the success of its web store better. Even a personal stock exchange listing for Bol.com was on the table. It was more obvious to report Bol.com’s results as a separate business unit.

The web store is now large enough for this. Ahold Delhaize paid 350 million euros for Bol.com in 2012. Since then, the turnover of the online store has grown by double digits, to 2.1 billion euros in 2018.

Bol.com started with the purchase and sale of its own stock, but is increasingly changing into a platform that brings customers and external sellers into contact with each other on a margin. In 2020, more than half of Bol.com’s revenue will come from third-party sales, the company predicts.

Since the acquisition of Bol.com, Ahold Delhaize has provided only limited information about the results of its web store subsidiary. Once a year, at the presentation of the annual figures, the concern reports the turnover of the web store. In the three other quarters, investors and analysts have to make do with a growth percentage compared to a year earlier.

In those quarters, Bol.com’s revenue is hidden in a comprehensive category: internet sales from all of Ahold in the Netherlands, including via ah.nl and the web stores of Etos and Gall & Gall. As a result, the profitability of Bol.com remains a mystery. With the annual figures for 2018, Ahold Delhaize only reported that the profit margin (EBITDA) of the web store was positive.



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