21st Apr 2015 08:51
X5 REPORTS Q1 2015 UNAUDITED FINANCIAL RESULTS
Amsterdam, 21 April 2015 - X5 Retail Group N.V., ("X5" or the "Company") a leading Russian retailer (LSE ticker: "FIVE"), announced today the Company's condensed consolidated interim financial information for the three months ended 31 March 2015 (Q1), in accordance with International Financial Reporting Standards as adopted by the European Union.
Q1 2015 Financial Results Highlights:
· Total net retail sales increased by 26.5% year-on-year (y-o-y).
· Gross profit margin increased by 54 basis points (bp) and reached 24.6%.
· EBITDA grew by 34.0%, y-o-y, EBITDA margin increased by 40 bp to 7.2%.
P&L statement highlights[1]
RUB million (mln) | Q1 2015 | Q1 2014 | % change y-o-y |
Revenue | 182,725 | 144,167 | 26.7% |
incl. net retail sales[2] | 182,053 | 143,898 | 26.5% |
Pyaterochka | 129,579 | 96,175 | 34.7% |
Perekrestok | 31,750 | 28,686 | 10.7% |
Karusel | 17,898 | 16,483 | 8.6% |
Express | 2,827 | 2,221 | 27.3% |
E5.RU | - | 334 | n/a |
Gross profit | 44,896 | 34,646 | 29.6% |
Gross profit margin, % | 24.6% | 24.0% | |
EBITDA | 13,129 | 9,796 | 34.0% |
EBITDA margin, % | 7.2% | 6.8% | |
Operating profit | 9,068 | 5,907 | 53.5% |
Operating profit margin, % | 5.0% | 4.1% | |
Net profit | 4,110 | 2,469 | 66.5% |
Net profit margin, % | 2.2% | 1.7% |
Net retail sales
Net Q1 2015 RUB retail sales dynamics, y-o-y change | Avg ticket | # of customers | Sales |
Pyaterochka | 14.2% | 17.9% | 34.7% |
Perekrestok | 16.6% | (5.6%) | 10.7% |
Karusel | 9.3% | (0.7%) | 8.6% |
Express | 12.9% | 13.4% | 27.3% |
X5 Retail Group | 11.9% | 12.9% | 26.5% |
Net retail sales in Q1 2015 grew by 26.5% year-on-year (y-o-y). A primary driver for the increase in net retail sales was selling space expansion and the positive performance of maturing stores added over the past two years, supported by successful store refurbishment programme, food inflation, and improved value proposition across X5's stores.
The increase in customer visits was primarily attributable to Pyaterochka expansion, as well as higher traffic in existing Pyaterochka stores due to ongoing customer redistribution driven by the challenging macroeconomic environment, which also resulted in a reduction in customer visits and traffic primarily at Perekrestok and to a smaller extent at Karusel.
Selling space end-of-period, square meters | As at | As at | Change, |
31-Mar-2015 | 31-Mar-2014 | y-o-y | |
Pyaterochka | 1,859,307 | 1,443,137 | 28.8% |
Perekrestok | 419,827 | 392,631 | 6.9% |
Karusel | 361,679 | 360,531 | 0.3% |
Express | 40,932 | 36,194 | 13.1% |
X5 Retail Group | 2,681,745 | 2,232,492 | 20.1% |
Q1 2015 LFL[3] results, growth y-o-y | Sales | Traffic | Basket |
Pyaterochka | 21.7% | 5.2% | 15.7% |
Perekrestok | 7.5% | (6.0%) | 14.4% |
Karusel | 7.8% | (1.4%) | 9.4% |
Express | 5.8% | (2.1%) | 8.1% |
X5 Retail Group | 17.1% | 2.9% | 13.7% |
For more details on net retail sales growth please refer to 'X5 Q1 2015 Trading update'.
Gross profit margin
The Company's gross profit margin in Q1 2015 amounted to 24.6%, a 54 bp increase compared to Q1 2014. The increase was primarily due to the improved logistics costs management as well as further optimization of assortment.
Selling, general and administrative (SG&A) expenses
RUB mln | Q1 2015 | Q1 2014 | % change y-o-y |
| |
Staff costs | (14,592) | (12,104) | 20.6% |
| |
% of Revenue | 8.0% | 8.4% |
| ||
Lease expenses | (8,367) | (6,598) | 26.8% |
| |
% of Revenue | 4.6% | 4.6% |
| ||
D&A and impairment | (4,061) | (3,889) | 4.4% |
| |
% of Revenue | 2.2% | 2.7% |
| ||
Utilities | (4,053) | (3,499) | 15.8% |
| |
% of Revenue | 2.2% | 2.4% |
| ||
Other store costs | (2,729) | (2,345) | 16.4% |
| |
% of Revenue | 1.5% | 1.6% |
| ||
Third party services | (1,279) | (1,092) | 17.1% |
| |
% of Revenue | 0.7% | 0.8% | |||
Other expenses | (2,336) | (1,265) | 84.7% |
| |
% of Revenue | 1.3% | 0.9% |
| ||
Total SG&A | (37,417) | (30,791) | 21.5% |
| |
% of Revenue | 20.5% | 21.4% |
| ||
As a percentage of revenue, in the reporting period, the Company was able to decrease staff costs by 41 basis points to 8.0% primarily due to improvements in operating leverage.
Lease expenses in Q1 2015, as a percentage of revenue, remained flat y-o-y at 4.6%. The share of leased space in Company's total real estate portfolio increased from 56.6% as of 31 March 2014 to 59.4% as of 31 March 2015.
Depreciation, amortization and impairment costs in Q1 2015, as a percentage of revenue, decreased by 48 bp y-o-y to 2.2% thanks to operating leverage effect and decreasing share of owned stores in total X5 real estate portfolio.
Utilities costs in Q1 2015, as a percentage of revenue, decreased by 21 bp and reached 2.2% due to operating leverage effect.
In Q1 2015, third party services, as a percentage of revenue, changed immaterially compared to Q1 2014.
Other store costs declined by 13 bp as a percentage of revenue, in Q1 2015 compared to Q1 2014 and reached 1.5%.
Other expenses in Q1 2015, as percentage of revenue, grew by 40 bp due to increased agent payments on the back of franchise program expansion, as well as due to movement in provisions.
EBITDA in Q1 2015 totaled RUB 13,129 mln, or 7.2% of revenue compared to RUB 9,796 mln, or 6.8% of revenue, in the corresponding period of 2014.
Non-operating gains and losses
RUB mln | Q1 2015 | Q1 2014 | % change y-o-y | |
Operating profit | 9,068 | 5,907 | 53.5% | |
Net finance costs | (3,945) | (2,674) | 47.5% | |
Net FX result | 114 | (25) | n/a | |
Profit before tax | 5,237 | 3,208 | 63.2% | |
Income tax expense | (1,127) | (739) | 52.5% | |
Net profit | 4,110 | 2,469 | 66.5% | |
Net profit margin, % | 2.2% | 1.7% | ||
Net finance costs in Q1 2015 increased by 47.5% y-o-y. The weighted average effective interest rate on X5's total debt for Q1 2015 amounted to 13.6% per annum compared to 8.8% in Q1 2014.
In Q1 2015, X5's effective tax rate was 21.5% compared to 23.0% in the corresponding period of 2014. The Russian statutory income tax rate for both periods was 20.0%. The difference between X5's effective and statutory tax rates is primarily due to certain non-deductible expenses.
Consolidated cash flow
| RUB mln | Q1 2015 | Q1 2014 | % change y-o-y | ||||
Net cash from operating activities before changes in working capital | 13,573 | 9,196 | 47.6% |
| ||||
Change in working capital | (11,139) | (10,120) | 10.1% |
| ||||
Net interest and income tax paid | (4,685) | (3,708) | 26.3% |
| ||||
Net cash flows used in operating activities | (2,251) | (4,632) | (51.4%) |
| ||||
Net cash used in investing activities | (7,820) | (4,289) | 82.3% |
| ||||
Net cash (used in)/generated from financing activities | (10,440) | 6,135 | n/a |
| ||||
Effect of exchange rate changes on cash & cash equivalents | (9) | - | n/a |
| ||||
Net decrease in cash & cash equivalents | (20,520) | (2,786) | 636.5% |
| ||||
Company's net cash from operating activities before changes in working capital increased by RUB 4,377 mln, or by 47.6%, and totaled RUB 13,573 mln, whereas change in working capital increased by 10.1% and amounted to RUB 11,139 mln.
As a result, in Q1 2015 the net cash used in operating activities amounted to RUB 2,251 mln compared to RUB 4,632 in the same period a year earlier.
Net cash used in investing activities, which generally consisted of payments for property, plant and equipment, totaled RUB 7,820 mln in Q1 2015, compared to RUB 4,289 mln in Q1 2014, and reflects higher expenditures for store expansion and refurbishment. In Q1 2015, X5 added more than twice the net number of stores compared to Q1 2014, or 156 stores versus 74 stores, respectively. Moreover, 344 stores were refurbished in Q1 2015 compared to 33 in Q1 2014.
Net cash used in financing activities in Q1 2015 totaled RUB 10,440 mln compared to net cash generated from financing activities of RUB 6,135 mln in Q1 2014. In February 2015, the Company made early repayment of VTB Capital loan with floating interest rate in the total amount of RUB 9,000 mln.
Liquidity update
RUB mln | 31-Mar-15 | % in total | 31-Dec-14 | % in total |
Total debt | 120,619 | 130,986 | ||
Short-term debt | 14,407 | 11.9% | 15,834 | 12.1% |
Long-term debt | 106,212 | 88.1% | 115,152 | 87.9% |
Net debt | 115,516 | 105,363 | ||
Net debt/EBITDA | 2.35x[4] | 2.30x[5] | ||
EBITDA/Interest expense | 3.66x[4] | 3.76x[5] |
As of 31 March 2015, the Company's total debt amounted to RUB 120,619 of which 11.9 % was short-term debt and 88.1% long-term debt.
As of 31 March 2015, the Company had access to RUB 106 billion in undrawn credit lines with major Russian and international banks.
Note to Editors:
X5 Retail Group N.V. (LSE: FIVE, Fitch - 'BB', Moody's - 'B1', S&P - 'BB-') is a leading Russian food retailer. The Company operates several retail formats: the chain of proximity stores under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand and Express convenience stores under various brands.
At 31 March 2015, X5 had 5,639 Company-operated stores. It has the leading market position in both Moscow and St. Petersburg and a significant presence in the European part of Russia. Its store base includes 4,958 Pyaterochka proximity stores, 405 Perekrestok supermarkets, 83 Karusel hypermarkets and 193 convenience stores. The Company operates 33 DCs and 1,407 Company-owned trucks across the Russian Federation.
For the full year 2014, revenue totaled RUB 633,873 mln (USD 16,498 mln), EBITDA reached RUB 45,860 mln (USD 1,194 mln), and profit for the period amounted to RUB 12,691 mln (USD 330 mln). In Q1 2015, revenue totaled RUB 182,725 mln (USD 2,938 mln), EBITDA reached RUB 13,129 mln (USD 211 mln), and net income amounted to RUB 4,110 mln (USD 66 mln).
X5's Shareholder structure is as follows: Alfa Group - 47.86%, founders of Pyaterochka - 14.43%, X5 Directors - 0.04%, treasury shares - 0.04%, free float - 37.63%.
Forward looking statements:
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal", "believe", or other words of similar meaning.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond X5 Retail Group N.V.'s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements.
Any forward-looking statements made by or on behalf of X5 Retail Group N.V. speak only as at the date of this announcement. Save as required by any applicable laws or regulations, X5 Retail Group N.V. undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events or circumstances after the date of this document.
For further details please contact
| |
Maxim Novikov Head of Investor Relations Tel.: +7 (495) 502-9783 e-mail: [email protected]
| Anastasiya Kvon IR Director Tel.: +7 (495) 792-3511 e-mail: [email protected] |
Appendix I
Condensed Consolidated Interim Statement of Profit or Loss
for the three months ended 31 March 2015
(expressed in millions of Russian Roubles, unless otherwise stated)
Three months ended 31 March 2015 | Three months ended 31 March 2014 | |
Revenue | 182,725 | 144,167 |
Cost of sales | (137,829) | (109,521) |
Gross profit | 44,896 | 34,646 |
Selling, general and administrative expenses | (37,417) | (30,791) |
Lease/sublease and other income | 1,589 | 2,052 |
Operating profit | 9,068 | 5,907 |
Finance costs | (4,299) | (2,684) |
Finance income | 354 | 10 |
Net foreign exchange gain/(loss) | 114 | (25) |
Profit before tax | 5,237 | 3,208 |
Income tax expense | (1,127) | (739) |
Profit for the period | 4,110 | 2,469 |
Profit for the period attributable to: | ||
Equity holders of the parent | 4,110 | 2,469 |
Basic earnings per share for profit attributable to the equity holders of the parent (expressed in RUB per share) | 60.56 | 36.40 |
Diluted earnings per share for profit attributable to the equity holders of the parent (expressed in RUB per share) | 60.56 | 36.40 |
Appendix II
Condensed Consolidated Interim Statement of Comprehensive Income for the three months ended 31 March 2015
(expressed in millions of Russian Roubles, unless otherwise stated)
Three months ended 31 March 2015 | Three months ended 31 March 2014 | |
Profit for the period | 4,110 | 2,469 |
Other comprehensive loss | ||
Items that may be reclassified subsequently to profit and loss | ||
Exchange differences on translation from functional to presentation currency | - | (23) |
Total items that may be reclassified subsequently to profit and loss, net of tax | - | (23) |
Other comprehensive loss, net of tax | - | (23) |
Total comprehensive income for the period, net of tax | 4,110 | 2,446 |
Total comprehensive income for the period attributable to: | ||
Equity holders of the parent | 4,110 | 2,446 |
Appendix III
Condensed Consolidated Interim Statement of Financial Position at 31 March 2015 (expressed in millions of Russian Roubles, unless otherwise stated)
|
| 31 March 2015 | 31 December 2014 |
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 154,670 | 150,328 | |
Investment property | 3,670 | 3,718 | |
Goodwill | 65,732 | 65,684 | |
Other intangible assets | 14,100 | 14,618 | |
Investment in associates | 31 | 31 | |
Available-for-sale investments | 213 | 213 | |
Other non-current assets | 2,304 | 2,251 | |
Deferred tax assets | 3,706 | 3,568 | |
244,426 | 240,411 | ||
Current assets | |||
Inventories | 52,800 | 47,084 | |
Indemnification asset | 244 | 240 | |
Trade and other accounts receivable | 18,480 | 21,464 | |
Current income tax receivable | 2,304 | 2,610 | |
VAT and other taxes recoverable | 14,259 | 13,488 | |
Cash and cash equivalents | 5,103 | 25,623 | |
93,190 | 110,509 | ||
TOTAL ASSETS | 337,616 | 350,920 | |
EQUITY AND LIABILITIES | |||
Equity attributable to equity holders of the parent | |||
Share capital | 2,457 | 2,457 | |
Share premium | 46,218 | 46,218 | |
Retained earnings | 45,899 | 41,789 | |
Share-based payment reserve | 105 | 94 | |
94,679 | 90,558 | ||
Total equity | 94,679 | 90,558 | |
Non-current liabilities | |||
Long-term borrowings | 106,212 | 115,152 | |
Deferred tax liabilities | 3,841 | 3,924 | |
Long-term deferred revenue | 11 | 13 | |
110,064 | 119,089 | ||
Current liabilities | |||
Trade accounts payable | 84,336 | 92,001 | |
Short-term borrowings | 14,407 | 15,834 | |
Interest accrued | 910 | 693 | |
Short-term deferred revenue | 247 | 555 | |
Current income tax payable | 1,771 | 1,770 | |
Provisions and other liabilities | 31,202 | 30,420 | |
132,873 | 141,273 | ||
Total liabilities | 242,937 | 260,362 | |
TOTAL EQUITY AND LIABILITIES | 337,616 | 350,920 |
Appendix IV
Condensed Consolidated Interim Statement of Cash Flows
for the three months ended 31 March 2015
(expressed in millions of Russian Roubles, unless otherwise stated)
Three months ended 31 March 2015 | Three months ended 31 March 2014 | ||
Profit before tax | 5,237 | 3,208 | |
Adjustments for: | |||
Depreciation, amortization and impairment of property, plant and equipment, investment property and intangible assets | 4,062 | 3,888 | |
Loss/(gain) on disposal of property, plant and equipment, investment property and intangible assets | 8 | (496) | |
Finance costs, net | 3,945 | 2,674 | |
Impairment of trade and other accounts receivable | 135 | 32 | |
Share-based options expense | 1 | 19 | |
Net foreign exchange (gain)/loss | (114) | 25 | |
Other non-cash items | 299 | (154) | |
Net cash from operating activities before changes in working capital | 13,573 | 9,196 | |
Decrease in trade and other accounts receivable | 1,665 | 390 | |
(Increase)/decrease in inventories | (5,716) | 811 | |
Decrease in trade payable | (7,648) | (11,256) | |
Increase/(decrease) in other accounts payable | 560 | (65) | |
Net cash generated from/(used in) operations | 2,434 | (924) | |
Interest paid | (3,988) | (2,456) | |
Interest received | 354 | 9 | |
Income tax paid | (1,051) | (1,261) | |
Net cash used in operating activities | (2,251) | (4,632) | |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (7,429) | (4,635) | |
Acquisition of subsidiaries | (110) | (54) | |
Proceeds from disposal of property, plant and equipment, investment property and other intangible assets | 36 | 643 | |
Purchase of other intangible assets | (317) | (243) | |
Net cash used in investing activities | (7,820) | (4,289) | |
Cash flows from financing activities | |||
Proceeds from loans | - | 9,263 | |
Repayment of loans | (10,440) | (3,124) | |
Principal payments on finance lease obligations | - | (4) | |
Net cash (used in)/generated from financing activities | (10,440) | 6,135 | |
Effect of exchange rate changes on cash and cash equivalents | (9) | - | |
Net decrease in cash and cash equivalents | (20,520) | (2,786) | |
Movements in cash and cash equivalents | |||
Cash and cash equivalents at the beginning of the period | 25,623 | 7,611 | |
Net decrease in cash and cash equivalents | (20,520) | (2,786) | |
Cash and cash equivalents at the end of the period | 5,103 | 4,825 |
[1] Please note that in this and other tables and text of the press release, immaterial deviations in the calculation of % changes, subtotals and totals are explained by rounding.
[2] Net of VAT and revenue from wholesale operations.
[3] LFL comparisons of retail sales between two periods are comparisons of retail sales in local currency (including VAT) generated by the relevant stores. The stores that are included in LFL comparisons are those that have operated for at least twelve full months. Their sales are included in LFL calculation starting from the day of the store's opening. We include all stores that fit our LFL criteria in each reporting period.
[4] Based on consolidated EBITDA of RUB 49,194 mln. and interest expense of RUB 13,455 mln.
[5] Based on consolidated EBITDA of RUB 45,860 mln. and interest expense of RUB 12,186 mln.
Related Shares:
X5 Retail