REG-O'KEY Group S.A. O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q1 2020
29/04/2020 15:05
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O'KEY Group S.A. (OKEY)
O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q1 2020
29-Apr-2020 / 16:03 CET/CEST
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
EQS Group.
The issuer is solely responsible for the content of this announcement.
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Press release
29 April 2020
O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q1 2020
O'KEY Group S.A. (LSE: OKEY, the 'Group') announces its unaudited
operating results for the first quarter of 2020.
All materials published by the Group are available on its website
1 www.okeygroup.lu.
Q1 2020 operating highlights
• Group net retail revenue increased by 7.6% to RUB 42,427 mln (by 6.0%
YoY if corrected for the leap year effect 2 1 ) driven by an increase
in traffic of 5.7% YoY and the average ticket of 1.8% YoY.
• Net retail revenue generated by O'KEY hypermarkets increased by
3.7% YoY (by 2.1% YoY1) to RUB 36,745 mln in Q1 2020, driven mostly by
a 3.6% YoY increase in the average ticket.
• Net retail revenue generated by DA! grew by 42.6% YoY (by 40.7% YoY1)
to RUB 5,682 mln in Q1 2020, supported by a steady growth in traffic
of 29.9% YoY and the average ticket of 9.7% YoY.
• Like-for-like (LFL) net retail revenue of the Group increased by
7.2% YoY (by 5.5% YoY1) in Q1 2020 due to a 3.7% YoY increase in the
LFL traffic and a 3.4% YoY increase in the LFL average ticket.
• Like-for-like (LFL) net retail revenue generated by O'KEY hypermarkets
increased by 4.9% YoY (by 3.3% YoY1) in Q1 2020, driven by a 0.9% YoY
increase in LFL traffic and a 4.0% YoY increase in the LFL average
ticket.
• Like-for-like (LFL) net retail revenue generated by DA! increased by
27.2% YoY (by 25.5% YoY1) in 1Q 2020, driven by a 15.5% YoY increase
in LFL traffic and a 10.1% YoY growth in the LFL average ticket.
Measures in response to COVID-19
The Group has promptly reacted to the changing situation in connection
with the spread of COVID-19 and has undertaken a number of measures to
maintain the safe and uninterrupted operation of its stores and
warehouses. The Company has established a COVID-19 response team headed by
the top management, which allowed it to ensure the effective operation of
all its divisions. Furthermore, the Company is in constant interaction
with the state authorities and monitors the changing situation in order to
coordinate actions and prompt response in compliance with regional
legislation in terms of various restrictions.
• Strict sanitary measures were introduced in all the Group's stores to
protect customers and employees. The majority of contact surfaces are
constantly disinfected, namely - the cash desk area, the doors of
freezer cabinets, scales in the self-service area, as well as trolley
handles and doors. The regulation of our own production was
comprehensively tightened through the introduction of strict personal
and sanitary control. Germicidal lamps for air disinfection run
continuously in the deli and bakery, trade and common areas are being
cleaned with disinfectants more frequently, and hand sanitiser
dispensers have been installed in busy areas.
• Furthermore, protective plastic screens have been installed in all
hypermarkets and discounters at cash desks to protect both customers
and employees. Stores have been provided with a stock of
disinfectants, disposable masks, and gloves for cashiers and store
staff. There are special markings on the floor to remind customers to
keep their distance.
• There is a strict monitoring of all staff in the Company, with
mandatory temperature measuring procedure to pass before starting a
shift at work. Personnel with even the slightest signs of a cold are
not allowed to work, and in the event that COVID-19 is detected in
store personnel, the Company has set out a number of measures to
quickly respond to the situation. Also, in order to ensure safety, the
Company has decided to move most of its office employees to remote
work.
• Keeping a close eye on how the COVID-19 situation has unfolded abroad,
the Group has made the timely decision to increase stock levels to
meet the expected rise in demand. The Company successfully
restructured its interaction with suppliers and increased the
efficiency of logistics operations. These measures have made it
possible to replenish store shelves with food and non-food items in a
timely manner. The Company has also ensured to have a sufficient
reserve of safety stock in its distribution centres, with a special
focus placed on high-demand, entry-level products.
• Our online delivery services have seen a more than twofold growth in
demand in the reporting period. The Company changed operations at its
online store, okeydostavka.ru, in line with the evolving situation,
providing all necessary protective equipment against the virus to
staff and customers. The number of staff involved in all stages was
increased - from receipt and picking of orders to delivery to
customers.
• In order to take care of our customers, the Company launched a number
of social initiatives. The social campaign 'Stay healthy with us, we
take care of the rest', where the Company started to offer a huge
number of products with zero markup, including meat, fruit,
vegetables, fish, dairy and other fresh and ultra-fresh products.
Also, in order to take care of the most vulnerable in society - the
elderly - we launched the social campaign 'Older People Hour', where
they receive priority service for an hour in the morning.
Group: Operating review
Indicator Q1 2020 Q1 2019 Net change Change (%)
Number of stores 178 162 16 9.9%
Number of net store openings - 2 -2 -100.0%
Total selling space (sq. m) 3 2 598,308 586,357 11,951 2.0%
Total selling space added (sq. m) - 1,443 -1,443 -
Group key operating indicators for the quarter
Q1 2020 Q1 2019
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
Group 7.6% 5.7% 1.8% -1.1% -3.5% 2.6%
Group LFL 7.2% 3.7% 3.4% -1.3% -3.4% 2.2%
Group w/o leap day 6.0% 4.3% 1.6% -1.1% -3.5% 2.6%
Group LFL w/o leap 5.5% 2.3% 3.1% -1.3% -3.4% 2.2%
day
Key operating indicators by month
Indicator January February February w/o leap day March
Net retail revenue 3.4% 8.9% 3.7% 10.1%
LFL net retail revenue 2.0% 9.0% 3.8% 10.0%
Customer traffic 8.8% 10.3% 5.9% -0.9%
LFL customer traffic 6.1% 8.5% 4.1% -2.6%
Average ticket -4.9% -1.3% -2.0% 11.1%
LFL average ticket -3.9% 0.4% -0.3% 12.9%
O'KEY: Operating review
Stores development
Indicator Q1 2020 Q1 2019 Net change Change (%)
Number of stores 78 78 - -
Number of net store - - - -
openings
Total selling space 529,055 528,124 931 0.2%
(sq. m)2
Total selling space added - - - -
(sq. m)
In Q1 2020, O'KEY did not open any new hypermarkets. Two stores were
temporarily closed during the quarter - one for the whole period due to
renovation, second in the end of the quarter because of the closure of its
host shopping centre. As at 29 April 2020, the total number of stores is
78, with the total selling space at 529,055 sq. m.
Key operating indicators for the quarter
Q1 2020 Q1 2019
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
O'KEY 3.7% 0.1% 3.6% -4.0% -8.5% 4.9%
O'KEY LFL 4.9% 0.9% 4.0% -3.6% -6.0% 2.6%
O'KEY w/o leap day 2.1% -1.3% 3.4% -4.0% -8.5% 4.9%
O'KEY LFL w/o leap 3.3% -0.5% 3.7% -3.6% -6.0% 2.6%
day
Key operating indicators by month
Indicator January February February w/o leap day March
Net retail revenue 0.3% 5.7% 0.6% 4.9%
LFL net retail revenue 0.3% 7.4% 2.3% 6.7%
Customer traffic 4.0% 5.2% 0.9% -7.8%
LFL customer traffic 4.0% 6.5% 2.1% -6.6%
Average ticket -3.6% 0.4% -0.3% 13.7%
LFL average ticket -3.6% 0.9% 0.1% 14.2%
In Q1 2020, net retail LFL revenue grew by 4.9% YoY (3.3% without the leap
day effect), driven by a traffic increase of 0.9% and an average ticket
increase of 4.0%. During the quarter we maintained our strong focus on
freshness (with this category's LFL sales increasing by 6.7% YoY),
strengthening assortment range and private label products, which was
further supported by an ongoing rezoning project in our hypermarkets.
Continuous work on improving our private label products' quality and range
had a notable effect, with LFL sales increasing by 13.9% YoY. Another
important milestone was the introduction of a new loyalty programme for
our customers, which offers additional benefits and an enhanced shopping
experience. These activities, supported by a number of successful
promotions, boosted traffic in the first two months of the quarter and
provided a substantial surge in revenue for the period.
At the end of the quarter, the Company noticed changes in customer
behaviour in reaction to the coronavirus pandemic: less visits to stores,
but a much larger basket size and increased demand for a certain
assortment of goods. In direct reaction to this, the Company adjusted its
product range and increased the offer in staples, hygiene, and sanitary
products. These changes resulted in a 14.2% YoY increase in the LFL
average ticket and a 6.6% LFL decrease in footfall in March. In the
current environment, hypermarkets proved to be an effective and convenient
format as a one-stop destination for customers to buy all the goods they
need in a safe way.
DA!: Operating review
Stores development
Indicator Q1 2020 Q1 2019 Net change Change (%)
Number of stores 100 84 16 19.0%
Number of net - 2 -2 -100.0%
store openings
Total selling 69,253 58,233 11,020 18.9%
space (sq. m)
Total selling
space added - 1,443 -1,443 -
(sq. m)
In Q1 2020, the company did not open any new discounters. As of 29 April
2020, total number of discounters is 100 with a total trade area of 69,253
sq. m.
Key operating indicators for the quarter
Q1 2020 Q1 2019
Segment Net retail Average Net Average
revenue Traffic ticket retail Traffic ticket
revenue
Discounters 42.6% 29.9% 9.7% 36.0% 25.9% 8.0%
LFL Discounters 27.2% 15.5% 10.1% 19.5% 12.1% 6.6%
Discounters w/o leap 40.7% 28.4% 9.6% 36.0% 25.9% 8.0%
day
LFL Discounters w/o 25.5% 14.2% 9.9% 19.5% 12.1% 6.6%
leap day
Key operating indicators by month
Indicator January February February w/o leap day March
Net retail revenue 32.8% 36.8% 31.0% 55.3%
LFL net retail revenue 18.5% 22.2% 17.0% 38.5%
Customer traffic 30.4% 31.6% 26.8% 28.1%
LFL customer traffic 15.9% 16.9% 12.6% 14.1%
Average ticket 1.8% 3.9% 3.3% 21.2%
LFL average ticket 2.2% 4.5% 3.9% 21.3%
The discounter DA! posted stable and steady growth in the first three
months of 2020. We continued to improve its value proposition to customers
by improving the quality of goods and services in stores, while
maintaining its position as one of the most competitive on the market in
terms of prices for essential goods.
In March, in reaction to the coronavirus crisis we increased stock levels
and on-shelf availability of goods in high demand. Therefore we were able
to attract new customers to DA! stores, keep traffic growth strong and
additionally gain from an increased average ticket, which jumped by more
than 20%. Overall LFL sales for the quarter grew 27.2%, with LFL traffic
increasing by 15.5% and the LFL average ticket by 10.1%.
OVERVIEW
O'KEY Group S.A. (LSE: OKEY, RAEX - 'ruA-') operates under two main
formats: hypermarkets under the O'KEY brand and discounters under the DA!
brand.
As at 29 April 2020, the Group operates 178 stores across Russia (78
hypermarkets and 100 discounters). The Group opened its first hypermarket
in St. Petersburg in 2002 and has since demonstrated continuous growth.
O'KEY is the first among Russian food retailers to launch and actively
develop e-commerce operations in St. Petersburg and Moscow, offering a
full range of hypermarket products for home delivery. The Group operates
six e-commerce pick-up points in Moscow and six e-commerce pick-up points
in St. Petersburg. The Group operates four distribution centres across the
Russian Federation - two in Moscow and two in St. Petersburg. As at
29 April 2020, the Group employs more than 20,000 people.
For the full year 2019, revenue totalled RUB 165,086,202 thousand, EBITDA
reached RUB 14,061,431 thousand, and the net profit for the period
amounted to RUB 746,958 thousand.
The O'KEY shareholder structure is as follows: NISEMAX Co Ltd - 44.79%,
GSU Ltd - 29.52%, free float - 25.69%.
DISCLAIMER
These materials contain statements about future events and expectations
that are forward-looking statements. These statements typically contain
words such as 'expects' and 'anticipates' and words of similar import. Any
statement in these materials that is not a statement of historical fact is
a forward-looking statement that involves known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
None of the future projections, expectations, estimates or prospects in
this announcement should be taken as forecasts or promises nor should they
be taken as implying any indication, assurance or guarantee that the
assumptions on which such future projections, expectations, estimates or
prospects have been prepared are correct or exhaustive or, in the case of
the assumptions, fully stated in this announcement. We assume no
obligations to update the forward-looking statements contained herein to
reflect actual results, changes in assumptions or changes in factors
affecting these statements.
For further information please contact:
4 ir@okmarket.ru
5 okeygroup.lu
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6 1 Figures corrected for the leap day effect (w/o the additional day
in February)
7 2 Two O'KEY stores were temporarily closed during the quarter.
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ISIN: US6708662019
Category Code: MSCH
TIDM: OKEY
LEI Code: 213800133YYU23T4L791
Sequence No.: 61247
EQS News ID: 1033133
End of Announcement EQS News Service
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