What is Growth Strategy and Future Prospects of Sonae SGPS, S.A Company?

A significant move in 2024 was the consortium led by Sonae securing control of Musti, a leading pet care retailer in the Nordics. The investment was approximately €700 million, reaching about 81% of its share capital. This acquisition represents a strategic step to internationalize Sonae's retail portfolio into a high-growth sector.

Musti further expanded into the Baltics in November 2024 through the acquisition of Pet City, reinforcing Sonae's ambitious growth strategy in pet retail. In the first quarter of 2025, Musti's sales grew by 11.8% to €120 million, with comparable like-for-like sales increasing by 2.4%.

The expansion of Wells and Arenal, coupled with the acquisition of Druni in 2024, more than doubled Sonae's store network in this segment. By the end of 2024, the company had 797 company-operated stores in this segment. This merger significantly boosted the segment's growth trajectory.

Sonae's food retail segment, particularly Continente, has also focused on expansion. Six new proximity stores were opened in the first quarter of 2024 to reinforce its leadership in Portugal. This demonstrates Sonae's commitment to strengthening its position in the Portuguese market.

Consolidated turnover for Sonae SGPS reached €9.947 billion in 2024, an 18% year-on-year increase. In Q1 2025, consolidated turnover further increased by 23% year-on-year to €2.6 billion. This growth reflects the effectiveness of Sonae's business strategy and its ability to capitalize on market opportunities.

Underlying EBITDA grew by 26% year-on-year, reaching €908 million in 2024. In Q1 2025, underlying EBITDA rose by 38% year-on-year to €218 million. The increase in EBITDA is a result of improved operational profitability and contributions from newly acquired companies.

Net profit attributable to shareholders for 2024 was €223 million. Excluding a €168 million capital gain from the ISRG divestment in 2023, net profit would have increased by 18% year-on-year. In Q1 2025, net result (group share) rose to €43 million, a 77% increase year-on-year.

Consolidated investment reached a record €1.589 billion in 2024, more than doubling the €665 million in 2023. Investment in acquisitions totaled €1.121 billion, largely driven by the Musti and Druni investments. Sonae continues to strategically invest in its portfolio.

Net Asset Value (NAV), based on market references, totaled €4.6 billion in Q1 2025, up by 4.5% quarter-on-quarter. The Board of Directors proposed a dividend of 5.921 euro cents per share for 2024, corresponding to a 6.5% dividend yield.

Analysts forecast Sonae SGPS's revenue to grow by 4.7% per annum on average over the next three years. This growth rate is slightly below the 4.8% forecast for the Consumer Retailing industry in Europe, indicating a competitive market environment.

Regulatory changes and compliance present ongoing risks for Sonae SGPS. As a subsidiary, Sonae Sierra is required to comply with the Global Compact guidelines, including those against corruption. The company proactively aligns its reporting with the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), even before they are legally mandated. This proactive approach highlights Sonae's commitment to transparency and compliance, which impacts its Business Strategy.

Supply chain vulnerabilities and technological disruption are inherent risks for a diversified multinational conglomerate like Sonae. While specific recent examples are not detailed, Sonae's continued investment in digitalization and its active technology investment portfolio suggest a proactive approach to mitigating these risks. The company's strategy includes assessing emerging risks, such as those related to climate change, commissioning studies to investigate their financial impacts on its assets, which is crucial for Sonae's Growth Strategy.

Internal resource constraints, particularly in attracting and retaining talent, are addressed through diversity policies. In 2024, 41% of leadership positions were occupied by women. The company's commitment to diversity and inclusion is part of its broader Strategic Planning Process, aimed at ensuring a skilled and motivated workforce. This approach is crucial for mitigating risks associated with talent acquisition and retention.

Sonae employs a robust risk management process, relying on the Enterprise Risk Management – Integrated Framework (COSO). The Sonae's Risk Management Consulting Group meets quarterly to review policies and propose new guidelines. In 2024, internal audit activities covered 7% of core business processes identified as being at risk of corruption, with no instances found. Furthermore, 100% of employees received anti-corruption training in 2024. This demonstrates Sonae's proactive approach to risk mitigation, which is essential for its long-term success.