LabelVie is planning a major expansion that could transform it from a supermarket-focused business into a group with interests in several sectors, including catering, textiles and services for companies. The retail group aims to generate 47bn dirhams in revenue by 2030, following its integration with Retail Holding. It is also targeting 3.8bn dirhams in earnings before interest, tax, depreciation and amortisation (EBITDA), and 1.5bn dirhams in net profit.
The new activities brought in through Retail Holding are expected to contribute around 11bn dirhams to the group’s targeted revenue. They include contract catering, services for businesses, textiles and other commercial activities.
The deal will significantly broaden LabelVie’s business beyond food retail, which has traditionally been its main area of activity.
The group is also counting on closer cooperation between its businesses to improve profits. It plans to cut costs through economies of scale, share resources and develop commercial links between its subsidiaries. The aim is to create additional value rather than simply add together the financial results of the two groups.
The merger is expected to generate a surplus of 12bn dirhams, which will strengthen the group’s equity and improve its debt position.
LabelVie’s management expects its debt ratio to fall from more than 50% to around 30%, giving the group greater financial flexibility.
The new structure will also bring investment decisions under a common framework and make it easier to coordinate projects across the different businesses.
It could allow the group to explore opportunities in other sectors, including construction equipment and footwear, without creating competition between its subsidiaries.
LabelVie had previously planned its expansion around a strategy running until 2028. The integration of Retail Holding has prompted it to raise its targets and extend its development plan to 2030.
The group plans to continue expanding its activities across the country while gradually entering new African markets.
The longer-term ambition is to turn LabelVie into a diversified group with several brands and business activities, reducing its reliance on food retail while expanding its presence beyond its home market.
