Tuesday, February 21, 2023
The 8th of February was the first opportunity to subscribe to a green retail bond. The subscription to this issue, which is part of the Sustainable Financing Framework, began on 10 February 2023, and very quickly proved to be a success with investors. The targeted 250 million euros was raised in barely a day and the funds will be used in the years ahead to finance numerous existing and new sustainable projects of the group. Today marks a final milestone in the effective issue and the bonds are listed on the regulated market of Euronext Brussels for the first time. This was symbolically highlighted with the ringing of the bell on Euronext this morning.
Unique collaboration within Colruyt Group
In recent years, the retail bond market has been less attractive because of the low to negative interest environment. Stefaan Vandamme, CFO Colruyt Group, explains: “It was obvious to us that once the choice for a retail bond had been made, it would be linked to our sustainability strategy. The net proceeds of this green retail bond are used to finance green projects, such as the investment in clean transport, circular water management, renewable energy, sustainable renovation of buildings, etc. In this way, we want to continue to deliver on our long-term commitment to invest in a sustainable future.” Belfius Bank, BNP Paribas Fortis and KBC Bank acted as joint lead managers in the issue of the green retail bond.
This issue is part of the Sustainable Financing Framework, which is the result of a unique collaboration between different teams within Colruyt Group, ranging from Sustainability and the businesses involved, to the Finance department and KBC as Sustainable Structuring Agent. This Sustainable Financing Frameworklays down the terms and conditions which according to the retail group should be met for a project to qualify for a sustainable label.
Investing in a green(er) future together
Colruyt Group is always close to the customer. The idea of having the general public participate in green projects is not new to the retail group. Previous initiatives in this field include the establishment of Eoly Cooperation, which enables people to participate in the construction as well as the proceeds of onshore wind turbines and the public participation in offshore wind energy via NorthSeaWind a few years later. Since November 2022, customers have been able to save points by purchasing food products with Eco-score A and B through their Xtra app and use them to help promote biodiversity.
Through this green retail bond, Colruyt Group wanted to take this one step further and let the general public participate in the sustainability projects, receiving a fixed compensation in return. The low entry fee of EUR 1,000 made this accessible to many investors.
A maximum of 60% of the raised funds will be used on green projects that were realised the past and current year. Stefaan Vandamme explains: “As described in the Prospectus, this mainly concerns a refinancing of existing debts and it's a logical step in the further diversification of Colruyt Group's financial resources.” The remaining funds will be allocated to green projects that are in the pipeline in the coming years. These could include, for example, the further sustainability of Colruyt Group's buildings, sustainable water management, renewable energy, energy efficiency and the further development of initiatives such as the Eco-score.
Increased transport sustainability is also part of the scope. By 2035, Colruyt Group wants all its freight transport to be zero-emission. It plans to do this through complementary technologies, both battery-electric vehicles and hydrogen-electric vehicles will be needed for the transition. The retail group actively engages in dialogue about this with the ecosystem of (transport) partners and suppliers it works closely with.
Jef Colruyt, CEO Colruyt Group, adds: “Such green retail bond is a great way for our stakeholders to co-invest - other than through shares - in our green projects and should be seen in the context of previous, recent and long-term investments. Its success gives us great pleasure and we'd like to thank all investors for their trust - it's a confirmation of our deliberate choice to follow a sustainable course. Together we're contributing to a greener future, which is something we very much believe in as a group.” Today marks a final milestone in the effective issue in that the settlement of the bonds has been finalised and the bond will be listed on Euronext for the first time. This was symbolically highlighted with the ringing of the bell on Euronext this morning.
Continue to invest, also in challenging times
This initiative doesn't change anything to Colruyt Group's existing investment programme. In addition to the investments in renewable energy and energy efficiency, the group will continue to invest, among other things, in new stores, the expansion of the logistics capacity in Belgium and France (such as the new distribution centre in Ollignies for the non-food range in food stores and the new distribution centre near Dôle in France) and the expansion of production capacity in Belgium with a focus on vertical integration. Innovative change programmes and digital transition also remain a priority. Stefaan Vandamme, CFO Colruyt Group: “We're going through some challenging times, but we remain true to our long-term vision and continue to invest in things that support this long-term strategy.”