Savola: Comprehensive Financial and Strategic Analysis of the Group's

Savola Group was established in the late 1970s, starting its journey as a company specializing in the import and distribution of vegetable oils, aiming to meet the basic food needs of the Kingdom of Saudi Arabia. Over time, the company gradually expanded to include the manufacturing of oils and ghee, then moved to horizontal expansion through the acquisition of other food companies and the establishment of integrated factories in several regions. By the 1990s, Savola had solidified its position as the largest producer of vegetable oils and ghee in the Kingdom, enhancing its distribution network to cover most Saudi cities. The group kept pace with major economic transformations in Saudi Arabia, investing in the sugar sector and introducing advanced production technologies, which granted it a competitive advantage against local and international companies. In the first decade of the third millennium, Savola adopted a diversification policy, entering the retail sector by acquiring the "Panda" supermarket chain, thus becoming one of the largest supermarket operators in the region. This expansion contributed to building an integrated system that combines production, distribution, and direct sales to consumers. The group also began regional expansion, launching operations in Gulf countries and Egypt, leveraging its logistical expertise and supply chain management efficiency. Savola did not stop at organic growth but continued to acquire stakes in small and medium-sized food companies, integrating its operations within the food and retail sector. In the last decade, the group has focused on innovation, developing healthy products, and adopting digital solutions in its operations to keep pace with changes in consumer behavior and enhance its resilience against global economic challenges. This rich historical journey highlights how Savola has transitioned from a specialized company to a giant group dominating the food and retail sectors in the Kingdom and the region.

The food sector forms the backbone of Savola Group's operations, as the company focuses on producing and distributing essential food items that meet the needs of millions of consumers in Saudi Arabia and beyond. Vegetable oils and ghee top the group's product list, as Savola is the largest producer and distributor of these goods in the Kingdom. The group owns advanced factories that rely on modern production lines ensuring product quality and diversity, offering various types and sizes of vegetable oils, in addition to vegetable ghee products that are heavily consumed in homes and restaurants. Savola's portfolio is not limited to oils and ghee but has expanded to include sugar production, one of the most important strategic commodities in the region. The group manages highly efficient sugar factories that contribute to achieving self-sufficiency for the Saudi market and exporting surplus to regional markets. Additionally, Savola invests in food manufacturing and canning companies, managing distribution networks that cover most parts of the Kingdom. This includes ready-to-eat products, canned goods, and some types of frozen foods, giving it the ability to compete with local and international companies. The group places significant importance on developing healthy and organic products, aligning with new consumer trends towards healthy eating, having launched production lines for cholesterol-free oils and lower-calorie sugar. Savola also invests in research and development to enhance product quality and provide food innovations that meet changing market demands. The food sector is the solid foundation upon which the group relies to achieve its revenues, with sales from this sector contributing significantly to Savola's annual total revenues, making it a key player in achieving national food security.

The retail sector is one of the major pillars of Savola Group's success, as the group owns the "Panda" chain of stores, which is one of the largest retail and supermarket chains in the Kingdom of Saudi Arabia. Savola began its entry into the retail sector in the early 2000s by acquiring "Panda", transforming from a mere food company into a major player in retail trade. Panda branches are spread across most regions of the Kingdom, covering both major and minor cities, giving the group extensive geographical reach and the ability to access various consumer segments. The store formats vary between supermarkets and hypermarkets, in addition to the giant "Hyper Panda" stores that offer a comprehensive shopping experience covering all food and non-food items. Savola relies on advanced marketing strategies in managing the retail sector, including periodic promotions, loyalty programs, and seasonal discount campaigns that attract millions of visitors annually. The group also invests in developing the digital shopping experience, having launched an online store for selling food and non-food products, which contributed to increasing Panda's market share amid rapid digital transformation. Panda is distinguished by its ability to offer products at competitive prices due to its negotiating power with suppliers and large purchasing volume. Savola continuously updates Panda branches and expands its network to include new areas both within and outside the Kingdom, having recently opened branches in Gulf countries such as the UAE and Qatar. The group also focuses on improving the supply chain and storage to ensure product availability and quality. The retail sector in Savola is an important source of income and provides job opportunities for thousands of citizens, reflecting the group's ability to manage large and complex operations efficiently.

Savola Group witnessed strong financial performance in 2024 and 2025, reflected in revenue growth and net profits, supported by increased demand for essential food products and retail expansion. The group's revenues significantly increased in 2024, exceeding several billion Saudi riyals in total sales compared to the previous year, benefiting from rising global food prices and increased local and regional sales volumes. According to quarterly data, this growth continued into early 2025, especially with a surge in demand for canned goods and vegetable oils, and an increase in Savola's market share in the retail sector through the expansion of the Panda chain. Regarding net profit, the group returned to a recovery path after a period of volatility influenced by fluctuations in global commodity prices and import costs. Reports indicate that Savola achieved a positive operating net profit in 2024, with a noticeable improvement compared to the previous period, supported by cost control measures and the expansion of local production lines. The quarterly results for the first and second quarters of 2024 showed stability in performance with steady profit margins, while new expansions and cost rationalization contributed to enhancing profits during the third quarter. As for cash distributions, Savola continued its traditional approach of distributing annual dividends to shareholders, with the board of directors approving a dividend distribution for 2024 at a specified rate per share, representing a significant percentage of annual profits. The company also announced its intention to continue dividend distributions in 2025, depending on financial performance and regulatory approval. These indicators reflect the strength of the group's financial position and its ability to achieve sustainable returns in the food and retail sectors, despite economic and competitive challenges in the local and regional markets.

Savola Group's stock occupies a prominent position in the Saudi financial market (Tadawul), traded under the symbol 2050 and attracting the interest of local and international investors. The price of Savola's stock experienced notable fluctuations during 2024 and 2025, ranging between 50 and 60 Saudi riyals per share by the end of 2024, with slight changes in the early months of 2025. This price range reflects the stock's resilience against market fluctuations and supply and demand factors. As for market value, it is estimated at around 50 to 70 billion Saudi riyals, based on the stock price and the number of issued shares, placing Savola among the largest companies in the food and retail sector in the Kingdom. Daily trading volumes on the company's stock are relatively stable, indicating investor confidence and interest from financial institutions. Regarding the price-to-earnings (P/E) ratio, it reached between 20 and 30 times by the end of 2024, a rate classified within the medium range for the food sector, reflecting moderate profit margins compared to market value. The P/E ratio is affected by the company's achievement of annual profit growth, as the rate decreases with increased profits and rises during periods of financial volatility. As for the dividend yield, it has reached about 2 to 3% in recent years, with regular cash dividends distributed, as 1.20 riyals per share was distributed for 2023. These financial indicators are a fundamental reference for investors when evaluating Savola's stock, and it is always advisable to follow official updates from Tadawul's website and the company's official reports to obtain the latest data and analyze the stock's dynamics in the market.

Asset and liability management plays a pivotal role in enhancing Savola Group's financial stability, as the group relies on a balanced financial structure that combines substantial investments in fixed assets and sufficient cash liquidity to meet short- and long-term obligations. The total value of Savola's assets at the end of 2024 reached tens of billions of Saudi riyals, including production plants, distribution networks, warehouses, and retail branches spread across the Kingdom and the region. The group places great importance on efficiently managing productive assets to ensure sustainability and achieve good investment returns. On the liabilities side, Savola has successfully reduced a significant portion of its debts in recent years by repaying due loans and improving cash flows from operational activities. Financial data shows a decline in the debt-to-equity ratio, reflecting the strength of the financial position and the stability of the capital structure. The group also strives to maintain comfortable levels of cash liquidity, whether through bank accounts or short-term investments, to ensure the ability to finance expansions and meet periodic obligations. Savola adopts strict policies in monitoring expenses and managing working capital, including improving the collection cycle from customers and reducing unnecessary inventory. These measures enhance the group's flexibility and ability to face economic changes, such as fluctuations in raw material prices or changes in market conditions. Additionally, prudent financial management supports Savola's expansion and acquisition plans, providing a solid foundation for sustainable growth amid regional and global competition.

Savola Group's activities fall within the food and retail sector, which is characterized by several unique features that make it less affected by economic cycles compared to other sectors. Food is considered a basic consumer good that cannot be dispensed with, making demand relatively stable even during periods of recession or inflation. In the Kingdom of Saudi Arabia, the food market is characterized by high local consumption due to population density and cultural diversity, in addition to rising income and changing lifestyles. The market witnesses strong competition between local and international food companies, with Savola competing with companies such as Almarai and National Food Industries in the production of oils, sugar, and canned goods. In the retail sector, there is direct competition between Savola's Panda chain and major stores such as Al-Othaim, Danube, and Carrefour, with each chain seeking to enhance its market share through geographical expansion and innovative promotional offers. Seasonal changes, such as Ramadan and holidays, play a pivotal role in increasing demand for food products, prompting companies to intensify promotional offers and enhance inventory. On the other hand, factors such as global inflation and rising raw material prices have affected profit margins, prompting companies to develop advanced logistical solutions and production technologies to reduce costs. Government initiatives in food security and sustainability have also encouraged sector companies, including Savola, to adopt long-term strategies to ensure the availability of essential goods and achieve self-sufficiency. The importance of innovation in providing healthy and organic products that meet the aspirations of new consumers is highlighted, as well as expanding digital channels to meet the growing demands for online shopping. All these factors create a changing competitive environment that compels Savola to continue developing and innovating to maintain its leading position.

Savola Group faces strong competition in the Saudi and regional markets, both in the food and retail sectors. In the manufacturing of vegetable oils and sugar, Savola competes with companies such as National Food Industries and International Oils, which have recently begun to expand their market shares by offering competitive prices and improving production quality. Savola's operations also intersect with Almarai, a leader in dairy and frozen foods, especially in products that rely on ghee and vegetable oils. In the retail sector, the Panda chain competes with major stores such as Al-Othaim, Danube, and Carrefour, with each chain striving to enhance its market share through geographical expansion and innovative promotional offers. Savola benefits from its large size and extensive distribution network in securing large supply contracts and low purchasing prices, giving it a competitive advantage in pricing. However, the group faces increasing challenges due to the entry of international companies into the Saudi market and changing consumer preferences towards healthy and organic products, requiring continuous investment in research and development. Reports indicate that Savola retains a significant market share in the oils and sugar sectors, with Panda capturing a considerable share of the food retail market, yet intense competition requires the group to focus on innovation and expanding its digital offerings. Additionally, the expansion of competing companies in Gulf countries compels Savola to continue developing its logistical operations and enhancing its regional presence. The group's flexibility in adapting to changes is one of the key factors for its success in facing local and international competitors.

Savola Group relies on an ambitious expansion strategy aimed at enhancing its position in the Saudi market and expanding its presence in regional and international markets. In recent years, the group has increased its investments beyond the Kingdom's borders, leveraging its expertise in supply chain and distribution management. The strategy included launching new Panda branches in Gulf Cooperation Council countries such as the UAE and Qatar, in addition to entering partnerships with local companies in Egypt and North Africa to market its food products. Through this expansion, Savola aims to diversify its revenue sources and reduce reliance on the local market, as well as benefit from growth opportunities in emerging markets. The group has also invested in modern production plants abroad to enhance its competitiveness and meet the growing demand for high-quality Saudi products. The expansions are not limited to the retail sector but also include the food sector, where Savola has acquired stakes in local and regional manufacturing and distribution companies. The group places significant importance on vertical integration, seeking to control the value chain from production to final distribution, enhancing its ability to control costs and achieve high profit margins. Experience has shown that regional expansion has enhanced Savola's resilience in facing local economic challenges, as well as enabling it to benefit from opportunities for cooperation with regional governments in food security projects. The group plans to continue this strategy by exploring new markets and adopting innovative business models that align with economic transformations in the region.

Like other companies operating in the food and retail sector, Savola Group faces a range of challenges associated with fluctuations in global raw material prices, such as vegetable oils and sugar, which are essential components in its product portfolio. These fluctuations directly affect profit margins, especially during periods of rising global prices or currency volatility. The group sometimes has to reprice products or improve production efficiency to mitigate the impact of rising costs. Additionally, changes in consumer behavior and the increasing demand for healthy and organic products necessitate continuous innovation and the development of new products that meet market aspirations. On the other hand, intense competition from local and international companies poses a constant challenge, as maintaining market share requires investment in marketing, developing digital channels, and improving customer experience in retail stores. However, these challenges also present growth opportunities, as Savola can enhance its position by expanding its regional presence, investing in research and development, and adopting advanced technological solutions in the supply chain. Government initiatives such as support for national food security and sustainability open the door for Savola to develop new projects and participate in strategic programs. The group's flexibility in adapting to economic changes and its adoption of revenue diversification strategies are among the factors that enable it to turn challenges into opportunities for sustainable growth in the future.

Savola Group places significant importance on innovation and digital transformation as essential elements of its growth and competitiveness strategy. The group recognized early on that technological transformations and digital consumer behavior shape the future of the food and retail sectors, and thus invested heavily in developing its digital infrastructure. Savola launched a comprehensive online store that allows customers to purchase food and non-food products online, providing flexible and fast payment and delivery options. The group has also partnered with major e-commerce platforms in the Kingdom to enhance Panda's digital presence and expand its customer base. Savola has invested in improving supply chain and warehouse management systems using artificial intelligence and big data analytics, leading to increased operational efficiency and reduced operating costs. In marketing, the group has relied on targeted digital campaigns and smart loyalty programs that allow tracking purchasing patterns and offering personalized offers to customers. Savola has also launched several innovations in its products, such as low-fat healthy oils and organic sugar, to meet the growing demand for healthy foods. The group is keen to integrate sustainability into its digital plans through waste management and recycling initiatives and the use of environmentally friendly packaging solutions. These efforts reflect Savola's vision that digital innovation is not just a tool for improving operations but a strategic pathway to create added value and enhance competitiveness in the changing market.

Savola Group is committed to the principles of social responsibility and environmental sustainability as an essential part of its corporate identity and long-term strategy. The group recognizes that its role extends beyond profit-making to contributing to community development and environmental protection. In recent years, Savola has launched several environmental initiatives, such as reducing the use of plastic in packaging, recycling used oils, and improving energy efficiency in its factories and branches. The group has also issued periodic reports on the environmental impact of its activities and set clear goals to reduce its carbon footprint and increase reliance on renewable energy sources. On the social level, the group has implemented food support programs for needy families during Ramadan and crises, and participated in awareness campaigns about healthy nutrition and food safety. Savola has also supported localization initiatives, providing job and training opportunities for Saudi youth across its various sectors. The group has partnered with governmental and non-profit organizations to enhance national food security and contribute to achieving the goals of Saudi Vision 2030 in sustainability and employment. The group believes that achieving a balance between economic growth and social responsibility is the key to ensuring its continuity and success in the long term. It is keen to integrate environmental and social governance standards into all its operations, enhancing investor and customer confidence in it as a responsible and sustainable institution.

Savola Group witnessed a series of important developments and news between 2023 and 2025 that impacted its financial performance and operational strategies. In early 2024, the group announced strong quarterly financial results, showing improvements in sales and profits compared to the same period of the previous year, supported by increased demand for vegetable oils and canned goods and the success of digital marketing campaigns. Savola also implemented a new project to establish an advanced vegetable oil production plant, aiming to enhance self-sufficiency and reduce reliance on imports, reflecting its commitment to Saudi Vision 2030 in food security. In the retail sector, the group continued to expand Panda branches both within the Kingdom and abroad, opening new branches in the UAE and Qatar, and developing the online shopping experience through advanced digital platforms. Savola announced strategic alliances with global suppliers and partnerships with governmental entities to develop supply chains and enhance storage and shipping efficiency. On the social responsibility front, the group launched campaigns to support needy families during Ramadan and awareness programs on health and nutrition. It also published reports on environmental sustainability and confirmed its continued efforts to reduce plastic waste and develop eco-friendly packaging solutions. The price of Savola's stock experienced fluctuations during the second half of 2024 linked to earnings announcements and new expansions, yet the overall trend remained stable with government support for the sector and growing investor confidence. These developments reflect Savola's resilience and ability to adapt to economic and technological changes, as well as its ongoing innovation and business development to meet the aspirations of the Saudi and regional markets.

Savola Group aims to enhance its leading position in the Saudi and regional markets by implementing ambitious strategic plans focusing on sustainability, innovation, and geographical expansion. Management has announced that it will continue to invest in developing healthy and organic products in response to changing consumer preferences and the increasing demand for low-fat and low-sugar foods. The group is also focusing on cost rationalization and improving operational efficiency using advanced technological solutions, such as artificial intelligence and data analytics in supply chain management. Savola plans to expand its presence in regional markets, especially in Gulf countries and Egypt, by launching new branches and strategic acquisitions in the food and retail sectors. The group intends to enhance digital sales channels and develop its online store into a comprehensive platform that meets the needs of Saudi and Gulf families. Savola places significant importance on research and development, allocating budgets to support new product innovation projects and improving packaging and wrapping processes in line with sustainability standards. The group aims to increase its contribution to national food security programs through strategic projects that achieve self-sufficiency and enhance cooperation with governmental entities. Savola will also continue its social responsibility programs, supporting localization and providing job opportunities for Saudi youth. The group believes that rapid adaptation to economic and technological changes, along with continued investment in human capital and innovation, is the key to ensuring sustainable growth and achieving rewarding returns for shareholders in the long term.