How difficult or optimistic will the year be for Kotsovolos of 655 million.

By Giorgos Lampiris

Kotsovolos is preparing to face a year, which is estimated to be very difficult, with the managing director of the company, Yiannis Vasilakos referring to the chain’s suppliers, who speak of a difficult September and October and an even more difficult 2023. Despite nevertheless, he expressed his broadest optimism regarding the developments that we are all watching.

“I believe that in the next twelve months, as a country, we have the evidence to get through the situation on better terms than any other country. Either because we have learned during the years of crisis, or because we have built resilience, or because we have learned to react only to major events and not to medium or smaller. Either because tourism will be there, or because the state has the ability to intervene and give help to the citizens when it is needed, since the size of our country allows certain funds to be unlocked, we will manage to balance and maybe we’ll show a slightly positive sign as well. I’m optimistic.”

It should be noted that energy costs burdened the business by 4 million euros last year, and about 1 million euros of additional costs came from diesel fuel due to the increase in the price of fuel. The total cost that was above the budget was at the level of 5 million euros.

Explores reactivation in Europe with the backdrop of the Balkans

At the same time, the company is investigating its reactivation in addition to Cyprus and in other markets with priority in the Balkans, seeking to once again develop its activity abroad. In this direction, the activity of Kotsovolos in Cyprus can be a guide for the next steps. “We have set priorities and mapped the markets we want to enter. I consider the Balkan countries to be key candidates for expansion, given that the logistics can be served and there is room for a company like us that can bring a good production model and a customer service. However, we are in a general evaluation since the Cyprus project has not yet been finalized.”

The target is 700 million euros in turnover for the 2022/2023 financial year

The turnover in the financial year 2021/2022 amounted to 654 million euros with an increase of 13.1% from the 578 million euros of the financial year 2020/2021 and cash available 59.4 million euros against 76.6 million euros which was the 2020/2021. EBIT moved to the levels of 25.2 million euros from 20.9 million euros in the period 2020/2021 with a change of 20.6%, while EBITDA was 51.7 million euros, from 43.8 million. euros in 2020/2021, increased by 18%.

E-commerce currently accounts for 9% of the company’s turnover. B2B sales reflect 20% of the total turnover, maintaining a broad growth perspective in the coming years, with Greece’s tourism as the main vehicle. Regarding Cyprus’ target for sales of 45 million euros, at the moment, according to Mr. Vasilakos, the turnover is slightly below half of this amount.

For the 2022/2023 financial year, the aim is for the 2021/2022 financial year’s €655m to reach €700m and for the business to remain close to this year’s profits, although Mr Vasilakos predicted that these would be reduced due to inflation and costs.

It realized investments of 13.2 million euros

In the 2021-2022 fiscal year, Kotsovolos made total investments of 13.2 million euros. The 6.1 million euros from the total amount of investments were allocated to new stores in Cyprus (Nicosia and Limassol), relocation of existing stores in Agia Paraskevi and River West, a new store in Greece (K-spot in Rhodes) and renovation of the Kifissia. Also, 1.6 million euros were allocated to central warehouse and spare parts warehouse automation as well as 5.5 million euros to technology investments.

New investments of 12.5 million euros in the fiscal year 2022-2023

For the 2022-2023 fiscal year, it has planned approximately 12.5 million euros. The 6.1 million euros will be in stores, where 1 new store will be created in Greece, 3 stores will be relocated, 9 will be renovated, while accessibility and infrastructure improvement projects will also be implemented. It should be noted that to date it has 14 stores that are available to people with disabilities, while by 2023, 19 more stores will be accessible to people with special needs and recognized by ELEPAP, like the existing ones.

In the supply chain, it will invest 2.8 million euros in warehouse automation as well as the first phase of automation to consolidate all warehouses into one. We remind you that Kotsovolos is going to build a large single warehouse of 63,000 sq.m. in Thriasio, merging the two existing ones. This facility requires infrastructure and preparation and will feature automation and robotic systems. It will utilize it in the form of lease & lease back, without being burdened with the construction costs which under normal conditions would even reach 50 million euros. Kotsovolos will undertake to exclusively cover costs of around 10 million euros in automation and robotic systems that will equip the new facility. It is expected to be operational in 24 months from today.

Also in the fiscal year 2022/2023, Kotsovolos will invest a total of 3.5 million euros in technology, while Kotsovolos will become exclusively cloud native by transferring all infrastructure to the cloud, while it is also going to upgrade its call center.

The account of the 10 months of operation in Cyprus

The two stores in Cyprus in Limassol and Nicosia already count 10 months of operation. They had a total of 407,577 hits. The visits to the online store were 1,148,027. The number of delivery, recycling, repair, upgrade, installation and maintenance exceeded 33,000 devices.

According to Mr. Vasilakos, Cyprus is one of the most difficult and at the same time most important steps of recent years, either because it concerns technology systems, or “because it teaches us what it is like to adapt to a similar culture, to manage from afar, respecting the consumer and making profits”. Also for Kotsovolos it is a lesson for the model that he could capture in other countries in the future. “Cyprus is the first big experiment that says that if I succeed in a small market and manage to make money from it, then I am ready to take the next step,” said the head of the chain.