Ladies and gentlemen, thank you for holding, and welcome to the Sligro Food Group conference call. During the presentation, all participants will be in listen only mode. Later, we will conduct a question and answer session. I would like to hand over the conference to Mr. Van der Sluijs. Go ahead, please, sir.
Thank you. Welcome everyone on the call on our half year results for 2019. As mentioned by the operator, I will start with a short introduction presentation, then there will be an opportunity for questions and answers. For my introduction, I will use the presentation which you can find on the company website on the half year figures. I will just start. Of course, first on the net sales. I'm looking at sheet number two of the presentation. What we see in the markets in which we operate, both in the Netherlands and Belgium, that there is a clear slowdown in the market as compared to last year. In the first half of last year, we still saw a market growth of 3.5%.
This year, the market has come down to a growth of only 0.2% in the Netherlands, and even a minus of 2%-3% in the Belgian market. That's a clear slowdown, what, of course, does not only affect the Sligro but all our competitors, but it's a more tough of an environment to operate in. Specifically within the market, we see quite a lot of differences between customer segments. Hospitality sector restaurants are still in growth mode, also within Sligro, we see that we are performing well in that segment. On the other end, we see pressure in the catering sector, in care and cure, and in the drinks related sector, so bars and leisure outlets. That is where we are hurt the most. All in all, in the Dutch market, we are more or less in line with market development.
In the Belgian market, we are doing a bit better than the market, both in the previously acquired businesses of JAVA and ISPC. Our new outlet in Antwerp is picking up week after week in sales, which causes a clear outperformance of the market in the combination in Belgium. On the next sheet number three, there's the same information, of course, as in the previous slide, in the new segmentation to the Netherlands and Belgium, with the comments as presented before. There we see that the first quarter was still okay-ish, specifically if we correct for the shift in Easter between the first and second quarter as compared to last year. On the other hand, we see a clear slowdown in the second quarter.
Specifically in our markets, the months of May and the early weeks of June were, compared to last year, really weak. That has to do with specific different weather circumstances. Last year in these months in our regions, it was already an average of over 25 degrees. This year it was below 15, and that has a big impact on these specific months. Of course, overall for the year, weather is a more or less neutral factor, but within a quarter, there can be major shifts as was this time. If I move on to the elaboration on the results development, we do it a little bit differently compared to last year's. That has everything to do with the implementation of IFRS 16 as of January 1st, 2019. I will elaborate on the shift a little bit later in this presentation.
What it means that all lines in the P&L more or less are affected, both EBITDA and EBIT are affected. Purely technical shifts in accounting principles, but the number profit before tax is most comparable. That's why we focus for the remainder of this presentation on that line and the net impacts of all different line items. What we see on sheet number four is that these harsh market circumstances with little growth and significant cost inflation have also put pressure on our markets. The main challenges that we face are not only caused by the market circumstances, but also as a result of a number of big building blocks. One is specifically the overhead cost structure. As explained last year, we always had a combined headquarters for both food retail and food service.
With the divestment of our food retail activities, we have to scale down the central operations, because otherwise all of the costs will be put on food service. We are in the process of doing so, rightsizing the headquarters, taking out 200 in headcount in the central organization. Although we still believe that we will complete the program in 2019, the speed of things is not progressing in the way we anticipated at first. Additional attention is needed to be able to complete that exercise. On the other hand, we are running a number of major programs in the organization. We are well on the way of finalizing the Heineken integration, which is a big effort, and we are preparing for the implementation of SAP, first in Belgium. That means that we still need a lot of the capacity and people in the headquarters.
We can't scale down to the right level yet. The last part is that we have still been servicing the new owners of EMTÉ on a number of central services, and that stopped as per June 2019. That means that as of this moment, we can start to dismantle also the functions related to those activities. All in all, a bit disappointing in terms of timing, but eventually we will be able to scale down quite a lot of the central costs. On the next sheet number five and six, we see the impact of IFRS. I won't go in too much of the detail, but as you can see, instead of the lease payments, which were previously recorded under expenses, we now see a shift of those elements to depreciation and interest expense.
That means that all the line items within the profit and loss account are affected. You can see the bridges for 2019 displayed both on the profit and loss account, but also on the balance sheet. Of course, there's a major impact because all these future lease payments are now put on the balance sheet, both as an asset and as a debt of, in our case, approximately EUR 165 million. On the short term, the yearly lease amount, EUR 16 million. That means that upon implementation, we also have a charge to equity of EUR 12 million, which will run out in the next couple of years.
I think the bridge on the results is best represented on sheet number seven, where we see that the profit before tax in the first half of 2018 was EUR 31 million, we had a significant decrease to EUR 16 million in the first half of this year. As already explained, the main items in that are the central overheads, the ability or the inability to scale down sufficiently at this moment, and on the other hand, the Belgian operations. In the Belgian operations, there's a number of things happening. First of all, we are setting up our Belgian organization for further growth in future, which means that we are investing both in infrastructure and in central capacity and overheads. That means an increase in costs, as you can see here.
Unfortunately, we still can't bank on efficiencies, and that's because we still run different ERP systems in all of our Belgian operations. Of course, upon the moment that we are implementing SAP, we can start to take out efficiencies there as well. For the time being, it is a relatively inefficient central operation, although we have centralized all the activities in one central headquarters today. The other part of the Belgian operational losses are the startup losses of our outlet in Antwerp. We are progressing nicely in the turnover development in Antwerp. Week after week, the sales per week increases. We built a flagship store in Antwerp with a relatively high fixed cost base. Before we get to breakeven in Antwerp, we still need to grow significantly.
We think that we can end up at the breakeven level around the end of this year, beginning of next year. That still means that also for the second half of the year, there will be further startup losses in Antwerp. I think important to note in this sheet is where there is less of an issue, specifically focusing on the Dutch operation, which is totaled here at zero. Does it mean that we're not progressing in the Dutch market? Yes, bottom line, that's true. Given the fact that the market development has slowed down to only a growth of 0.2% in the Netherlands, and we know there is significant cost inflation in both logistics, wages, and energy, this shows that we were able to absorb this significant cost inflation in the Dutch operation.
Which we think is a good job, and where we see some potential in the next six months to improve a little bit, specifically because the comparison basis to last year in that sense is improving. All in all, a meager performance in the first half of 2019. We still believe that we are doing the right things today. We are faced with a tough market in which we need to be very focused on keeping in the turnover, on the one hand, and reducing the cost levels and looking for efficiencies. We still believe that we should continue on the major programs. Of course, the integration of Heineken and the setup of Belgium. Unfortunately, the negative impacts of those are now combined in the first half of this year and will be, to some extent, in the second half of this year.
We are on the right track. We know where we should put additional attention, and that is also what we intend to do in the second half of 2019. On the sheets following, we have more of a detailed breakdown per element, as I've just mentioned, so I will not repeat that. I would like to skip to sheet number 11. There we see the development of the Antwerp store. You also see the progress in the sales. What you can see is that we're now more or less halfway in terms of getting to the breakeven results. This is the results of 30 weeks of opening. We need another more or less half year to get there.
What will help in the second half of this year, we will transfer the Belgian turnover that we're now still doing from the Dutch base, actually into Belgium and actually into Antwerp. That means that on a weekly basis, we add another EUR 150,000 per week to the Antwerp store, which really helps to reduce shrinkage there and to cover the cost basis, while in the Netherlands, moving this away from the already crowded delivery surface in Gilze will go mostly unnoticed. That will give huge impulse to the Belgian operation and specifically in Antwerp. If we go to sheet number 13 on the net profit, not surprisingly, if profit before tax is down by EUR 15 million, that we also see a big decrease in the net profit.
We, however, still believe that this is a timing issue and a temporary negative impact on our results, and that the major and strategic programs that we are running are going to pay off in the future as expected. We don't see a reason to adjust the interim dividend as we have proposed it last year, and we will pay out similar interim dividend for 2019 of EUR 0.55 per share on September 30th. On the next sheet, you can see more details on the segment information. I think the main messages we already covered, but here you see the numbers and the percentages related to that. Of course, keep in mind that in these lines, all the shifts of IFRS 16 are included. For instance, on the EBITDA level, the overall number looks better compared to 2018.
Of course, if you take out the effect of IFRS 16 in these numbers, you see similar effects as presented on the previous sheets. Maybe some words on the cash flow statement on sheet number 15. We see on the one hand, in the operating cash flow, the cash flow from operations will be down in line with the results as presented. This is compensated by the corporate income tax paid. That's the result of a restitution that we got in 2019 over 2018. We prepaid corporate income taxes in February last year, not taking into account the impact of the divestment of food retail and the incidental costs relating to that later in the year 2018. That meant that we had a significant tax refund of EUR 14 million in 2019, and that's already in the cash flow for this year.
On the other hand, we prepaid an estimate of the corporate income tax for this year, and that is a net result of EUR 7 million only compared to EUR 24 million last year. That covers, in cash terms at least, the lack of cash from operations. In total, more or less the same level. Investment activities. Of course, there is the acquisition of De Kweker, which was in the first half of this year. We dispose of Maison 1251, a specialty shop for some products in our cash and carry. We see that net CapEx has increased also significantly compared to last year. There is a timing element in this net CapEx. As explained before, we are rebuilding the distribution network for the combination of Sligro and Heineken as we speak. We intend to sell and lease back most of these new delivery service locations.
For instance, the location in Deventer, which is almost finalized, it will be ready in September this year. We have absorbed all the CapEx until now, to a large part in this number, but in the second half of this year, we expect to do the sale and lease back, then we get an inflow of roughly EUR 20 million. That reduces net CapEx again. The overall CapEx number for 2019, we expect to be around EUR 80 million net. That's the outlook going forward. The change in depth is related to the acquisition of De Kweker. On the one hand, we took on an additional loan from the banks. On the other hand, we did some repayments, a net impact of over EUR 30 million.
The dividend paid, as stated here, is the closing dividend of 2018, which we paid out at the beginning of this year. If we look at the free cash flow, there is an error in the presentation, so it doesn't relate to the number on page 14. If we look to the free cash flow, but the numbers on page 15 are correct, my apologies for that. Free cash flow is EUR -13 million compared to EUR -1 million last year for the group. The net effect of that is mainly related to the increased capital expenditure that we have done compared to last year. In the sheets following are more details on the developments in the Netherlands and Belgium. Both for Belgium and the Netherlands, you see on these sheets the market developments of consumer confidence, unemployment and inflation, and overall market dynamic.
I think I've mentioned the most important elements of that. Specifically, the drop in consumer confidence as of last year compared to now are not boding well for the developments in our market. We expect, going forward, a more flattish market with the information we have today. More importantly, we are focusing our internal efforts on the situation where we have a flat to a slightly declining market. We make sure that we have the right focus, and the focus should be on reducing costs and making things more efficient, because growth will not be the way out for the foreseeable period, as we think. Next steps in Belgium are described, then the market dynamics for the Netherlands. I'll go fast-forward to an update on De Kweker. A few sheets further on, we have mentioned the developments around De Kweker.
The acquisition was completed at June 17th of this year. The opening balance sheet is part of our overall balance sheet, consolidation of turnover and results only start from July onwards, they will be in the numbers of the second half of this year. Overall, on annual basis, roughly EUR 130 million sales of De Kweker, 50/50 in cash and carry and distribution. We will start the integration effort at the beginning of next year. First, we want to finalize the Heineken integration in the Amsterdam region, then we can integrate the delivery business of De Kweker into Amsterdam as well. Then we can also lease the infrastructure of De Kweker. The relocation of the cash and carry on their specific position in the Amsterdam market is going to be at a later stage.
We will continue to operate from the existing base in the cash and carry store, which they have today. We intend to bank on a number of synergies. Of course, in terms of purchase synergies, we can immediately start to convert in this year. We will also start to bank on the efficiencies on headquarter efforts, take the activities to our Veghel headquarters and reduce headcount in the Amsterdam region. Also the physical infrastructure is not needed anymore, specifically for the delivery part of the business. We intend to integrate the business in our Amsterdam delivery center and then sell off the buildings again into the market, which also saves quite a lot of infrastructure costs. For the short term, however, we have some work to do in Amsterdam.
Besides the food service business, which we find very attractive of De Kweker, there's also a fruit and vegetable company part of the group, which is not performing very well, was heavily loss-making last year, somewhere between EUR 5 million-EUR 6 million loss on an annual basis. We have made the decision either to sell off this business as a whole or in parts, or if there is no seller available, to fully dismantle the business. One way or another, we want to have this finalized before the end of the year. That means that some remaining operational losses and reorganization charges will affect our P&L in the second half of this year as a more or less one-off. We took that also out of the acquisition price. The way of accounting is such that these costs will run through the P&L in the second half.
We will report that as discontinued operations, it's clear to everybody that this is related to this dismantling of this part of the business. Still, we expect an impact pretax of roughly EUR 4 million, more or less, as a result of this exercise. That means that with the integration effort that we need to do, the headquarter dismantling that we are setting up now, and the alignment of purchase terms that we are also setting up now, that we expect a positive contribution to earnings per share from the second half of 2020 onwards. That's more or less one-year period of integration and restructuring before we can bank on the benefits for De Kweker. A little bit on the new IT landscape on the next slide. This program is running well and according to plan.
Also in terms of time and budget, we are in line with the earlier communicated expectations. Which means that in the summer period and right after summer, we will start the prototyping phase of our new international SAP landscape. We will do extensive testing, and then implement in Belgium in the course of 2020, which is as planned. Fortunately, now we have discussed with our implementation partner what we exactly need and what the design is. Also the cost and CapEx related to this are within the ranges that we communicated earlier. We are nicely on track in that sense.
If we go to the outlook for the remainder of this year and the months thereafter in 2020, we, of course, can't predict the future, given the indicators on consumer confidence and the way the market is developing, we anticipate continued pressure on the markets, both in Belgium and the Netherlands. We have seen and will see, we think, still some cost inflation, which we need to absorb by partially passing on some of it in the pricing to our customers. On the other hand, taking additional measures to increase efficiency. We need to speed up our process and give more attention to the reduction of the central overheads in the Netherlands specifically. We think we will be able to manage that, in terms of timing, we have to run the remainder of the program in the second half of 2019.
We think we can manage, we will stay very focused on the strategic programs. It means that in the short term, we still anticipate some pressures because Antwerp still has to grow into its breakeven model. The reduction of headcount will be gradually, it will be there eventually and still give some pressure on the shorter term. Of course, De Kweker, and specifically the fruit and vegetable company, will give some pressure as well in the second half. These are the most important effects, we won't give a firm prediction yet on the end of the year completely because there's too many variables still also in market development to be taken into account. That concludes my introduction and wrap-up of the sheet presentation. I'd be happy to now give the opportunity to ask questions.
Ladies and gentlemen, we will start the question and answer session now. To be registered for the question and answer queue, you may now press star one on your telephone. That's star one for your questions. Go ahead, please. Ladies and gentlemen, please press star one for your questions. Go ahead, please. There are no questions at the moment, Mr. Van der Sluijs .
Okay, thank you. If there are no further questions, I would like to thank all of you who dialed in on this call for your attention. In October, we will be back with a trading update on the quarter three numbers. Should any of you have any further questions popping up at a later stage, feel free to contact us to ask for that. For now, I wish everybody a good day, and for those who still have to go on holidays, a good holiday, and we'll speak again at a later moment. Thank you for your attention.
Ladies and gentlemen, this concludes the Sligro Food Group event call. Thank you for attending. You may now disconnect your line.