Strategy Note /
Saudi Arabia

BinDawood Earnings Call Summary – Q3 22

  • Total revenue grew by 9.7% yoy to SAR1.18bn in Q3 22

  • Sales of corporate customers of Danube brand in Q3 22 dropped by SAR79mn yoy

  • Gross profits decreased by 22.7% yoy to SAR307mn in Q3 22

SNB Capital
16 November 2022
Published bySNB Capital

Financial performance

  • Total revenue grew by 9.7% yoy to SAR1.18bn in Q3 22, mainly driven by the increased contribution from BinDawood store sales and contributions from overseas subsidiary Ykone.

  • Sales of BinDawood stores increased by 38.4% yoy due to higher footfalls while Ykone contributed SAR38mn to total revenue. Danube stores’ sales declined by 4.7% yoy mainly due to lower sales to corporate customers. However, in-store sales of Danube increased by 6% yoy.

  • The group’s LFL revenue grew by 6.2% yoy with BinDawood’s LFL growth increased by 38.6% yoy. Excluding the effect of corporate customer sales, Danube’s LFL growth remained flat on yoy basis.

  • Sales of corporate customers of Danube brand in Q3 22 dropped by SAR79mn yoy.

  • Gross profits decreased by 22.7% yoy to SAR307mn in Q3 22, while gross margins dropped to 26.0% vs 36.9% in Q3 21 due to the combined effect of marketing and promotion campaigns and lower support from suppliers.

  • Adjusted EBITDA decreased by 57.6% yoy to SAR86mn in Q3 22 while adjusted EBITDA margins dropped to 7.2% vs 18.8% in Q3 21. The decline in EBITDA and margins was driven by decreased gross profits, higher employment costs, expenses associated with new branch openings and acquisition related costs.

  • The company recorded a net loss of SAR48.0mn in Q3 22 vs a net profit of SAR70.2mn in Q3 21. This reflects the cumulative impact of lower gross margins and higher operating expenses.

  • Adjusted CFO increased significantly to SAR219mn in Q3 22 vs SAR8.2mn in Q3 21, mainly due to decline in receivables and increased trade payables.

  • The company remains debt free with a healthy cash balance of SAR486mn at the end of Q3 22.

Operational performance

  • During the quarter, BinDawood opened its first international supermarket in Bahrain and one hypermarket in Tabuk.

  • The company also opened one new express store during the quarter, taking the total express store count to three.

  • During 9M 22, the company opened Five small dark stores and expects the positive impact of these stores on the company’s financial performance.

  • Customer count in Q3 22 increased by 26.3% yoy to 12.5mn vs 9.9mn in Q3 21, mainly driven by return of pilgrims and increase in promotional and marketing activities.

  • Average basket size in Q3 22 dropped by 15.0% yoy to SAR91.1 compared to SAR107.2 of Q3 21, mainly due to competitive pricing adopted by the company to attract footfall.

  • Haramain stores are contributing 12.2% to total revenues in 9M 22 vs 14% in 2019 and 7.7% in 2021.

  • Registered loyalty customers have surpassed 2.87mn in Q3 22 vs c1.0mn in Q1 22, indicating brand penetration and successful rollout of the customer loyalty programme.


  • Danube brand is witnessing a strong growth in customer count and market share.

  • The company attributed the fall of gross margins in Danube stores to marketing and promotional campaigns in which the products are sold at discounted prices.

  • The management also highlighted that they have appointed a new Chief Operating Officer and Deputy Chief Commercial Officer.

  • The company expects margins to improve as it has already started renegotiating the back margins with the suppliers.

  • The management is confident about the positive impact of new stores on the company’s performance in Q4 22. Hence there won’t be any change in its store expansion plans.

  • The company is in the process of selecting the locations for BinDawood stores in Riyadh.

  • With the absence of social distancing measure, the frequency of customer visits to the stores increased. This also impacted the drop in basket size.


  • The improvement in sales and regaining market share will help negotiations with the suppliers. Hence the management expects an improvement in gross margins from Q4 22, with the full turnaround to be completed in FY 23.

  • The company plans to open three Danube stores (one express store and two supermarkets) and one pastry shop during FY 23.

  • The company expects the contribution from Haramain stores to exceed 14% of revenue in full year 2022.

  • A fully automated Mega dark store is expected to be commissioned by in FY 23 and is expected to improve fulfilment rates and reduce delivery times.

  • The company is evaluating further M&A opportunities in MENA region to support the core grocery retailing business.