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Our Profitability Per Location Is Very High, Between 15% And 20%

The DIHME Group has just closed the purchase of El Kiosko, combining the restoration of 37 establishments and almost 20 million euros in turnover. The crisis derived from Covid-19 has changed the way the sector works and has led companies like this to turn home deliveries into a key point. elEconomista has spoken with Daniel Sala, CEO of the group, to find out about his plans.

How have you weathered the Covid crisis?

It was a challenge for the sector that we have overcome with flying colors. At first it was to maintain the health of employees and customers. Then came the work part, trying to keep selling. We have a lot of business in delivery and the truth is that it has continued to work well.

There was a time of crisis cabinets every day and we got through it. The good part is that we get very valuable lessons from everything. We have managed to keep the sale better than other companies and we have taken the opportunity to integrate teams that seem like a bombshell, it is in tune with what we do. Integration with El Kiosko has been a unique opportunity that would not have arisen without a pandemic.

What part of the business does ‘delivery’ involve?

Before El Kiosko it was roughly 80% -90% of the company’s sale. Now there is much less, it weighs about 60%.

On a financial level, how did 2020 end?

We gave profit, which is not small for the one that was falling. In sales, we achieved about 10 million, around 20% less than in 2019. We were lucky to have delivery and a lot of position in that segment. The Kiosko has very nice places and 90% had a terrace.

We are super happy to present this integration that has meant an exponential leap, especially because it incorporates invaluable know-how, that of the founders of El Kiosko, who stay with us, and because we now have a brand that is already consolidated, with 20 stores, some very powerful expansion plans but without haste.

We will close this year with ten new restaurants and we will reach 250 in three years. In total, about 50 restaurants in El Kiosko, we do not want to go from there for a brand issue. In addition, we want to get other firms that are equally well cared for.

What plans do you have for 2021?

In 2021 we will close with 10 more El Kiosco restaurants in Madrid. We are working with those interested in setting it up in Barcelona, ​​but nothing closed. We have another project, the Sagrada Fábrica, with two openings pending. They are probably in Toledo, because it will be an investment from the brewery.

What other markets that you are not yet interested in?

Barcelona interests us a lot. Also the Levante, because it is a very kiosk area, and Andalusia. Also Zaragoza, we understand that it is a place where you have to be. Then small towns that we like because we also consider them relevant, such as Salamanca, Valladolid, Segovia, Toledo, are areas where it will work.

What is the planned investment for the 10 openings?

We are going to make one of those 10 of our own, which will be in Madrid, and the other nine are franchisees. On average they have been 400,000 euros each opening.

Are they going to end this year with benefits?

Yes, of course, there is going to be a profit this year. And the joint ebitda of the companies has to be around more than 2 million euros. It is what we anticipate.

Have these operations been modified in the wake of the pandemic?

The year 2020 has been very different and our position for 2021 is what I have told you about. Right now we are waiting to see what happens. For now we are still open, we continue with good hours, etc.

What percentage is owned and how much is franchise?

Right now the network is four of its own out of 20 in total. Next year we will be five out of 30, no doubt. And so we always want to continue growing. One restaurant per year is our plan, because I think it is healthy and we learn from restaurants.

Have they had to resort to financing for the Covid?

Yes, through the ICO. When you drop sales by one point, the income statement suffers a lot. We do not know when it will recover. Hopefully in 2021 or 2022 we will take the sales of 2019, but with this uncertainty, you have to have financing. It is a party that we will pay for, but in installments.

Do they propose the entry of external capital?

No. We like agreements like those of El Kiosko, which is very much in tune between the two people and a common project for the growth of the company. What will a fund bring me? Money? For 50 restaurants I don’t need it.

What average profitability does each store have?

She’s very tall. It is between 15% and 20%. We bill in all time slots, we are close to a million euros in turnover for each restaurant.

Has the average ticket gone down with the pandemic?

It holds up quite well. It fell at the beginning, because a Covid menu was made with fewer dishes, but with the return to normality and the incorporation of new features, it recovers.

What are your financial goals?

I don’t like crystal balls, but the goal is to have 5 million ebitda in five years. This is based on a growth of up to 50 El Kiosko, some 15 Sagradas Factories, the position we have in Telepizza and the launch of a new brand. There is a lot of travel in shopping and cost savings.

And in employment?

We are many and we will be more. We are in those five years in about 1,500 people between franchisees and own.

He was talking about a new brand, when and how?

The sketch is quite in focus. In September or October, we have it fully developed in the absence of premises. Between now and the end of the year we will open. It will be a Kiosk, but different, in which it can be consumed from breakfast to dinner. It will remember the peoples, several decades ago.

What has changed in clients with the pandemic?

The locations, the delivery … and that has led to many changes, such as dark kitchens. We will surely open some of these kitchens to serve people who like El Kiosco, but not from the restaurant, from another place. El Kiosko is not a place to have bikers coming in while you dine.

Do they use any platform or do they have their own delivery people?

We have our own distributors, on staff. They recently looked at you as if you were crazy for doing that, but delivery is going to undergo a transformation from scratch.

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