REG-O'KEY Group S.A. O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q4 AND 12M 2019
30/01/2020 09:45
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O'KEY Group S.A. (OKEY)
O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q4 AND 12M 2019
30-Jan-2020 / 10:43 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
30 January 2020
O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q4 AND 12M 2019
O'KEY Group S.A. (LSE: OKEY, the 'Group') announces its unaudited
operating results for the fourth quarter and twelve months of 2019.
All materials published by the Group are available on its website
1 www.okeygroup.lu.
12M 2019 operating highlights
• Underlying Group net retail revenue, excluding the effect of the
supermarket business sale, increased by 3.0% YoY to RUB 163,154 mln.
• Underlying net retail revenue generated by O'KEY hypermarkets
increased by 0.3% YoY to RUB 145,298 mln in 12M 2019.
• Net retail revenue generated by DA! grew by 31.7% YoY to
RUB 17,856 mln in 12M 2019, supported by a steady growth in traffic
(up 24.5% YoY) and the average ticket (up 5.8% YoY).
• Like-for-like (LFL) net retail revenue of the Group increased by
0.9% YoY in 12M 2019 due to a 0.9% YoY increase in the LFL average
ticket.
• Like-for-like (LFL) net retail revenue generated by O'KEY hypermarkets
decreased by 0.4% YoY in 12M 2019, driven by a 1.8% YoY decrease in
LFL traffic and a 1.4% YoY increase in the LFL average ticket.
• Like-for-like (LFL) net retail revenue generated by DA! increased by
14.9% YoY in 12M 2019, driven by a 8.6% YoY increase in LFL traffic
and a 5.8% YoY growth in the LFL average ticket.
• 19 discounters were opened in 12M 2019.
Q4 2019 operating highlights
• Group net retail revenue increased by 1.1% YoY to RUB 46,152 mln.
• Underlying net retail revenue generated by O'KEY hypermarkets
decreased by 1.4% YoY to RUB 41,136 mln in Q4 2019 as a result of
lower basket size due to weaker performance in December, which was
triggered by short-term factors such as abnormal weather conditions
influencing customer sentiment towards seasonal categories, and
one-off events such as the renovation of one of our shopping malls, to
be completed in Q2. If we exclude one-off factors, increases in
top-line metrics in December would have been in line with the trends
we observed in October and November. We have also noticed that
December saw a deflation in prices.
• Net retail revenue generated by DA! grew by 26.8% YoY to RUB 5,016 mln
in Q4 2019, supported by a steady growth in traffic (up 22.4% YoY) and
the average ticket (up 3.7% YoY).
• Like-for-like (LFL) net retail revenue of the Group decreased by
0.3% YoY in Q4 2019, driven by a 1.6% YoY increase in LFL traffic and
a 1.8% YoY decrease in the LFL average ticket.
• Like-for-like (LFL) net retail revenue generated by O'KEY hypermarkets
decreased by 1.4% YoY in Q4 2019, driven by a 0.4% YoY increase in
LFL traffic and a 1.7% YoY decrease in the LFL average ticket.
• Like-for-like (LFL) net retail revenue generated by DA! increased by
11.4% YoY in Q4 2019, driven by a 7.5% YoY increase in LFL traffic and
a 3.7% YoY growth in the LFL average ticket. The Group's discounters
saw continued gradual improvements in LFL traffic.
• 14 discounters were opened in Q4 2019.
Stores development of the Group
Indicator Q4 2019 Q4 2018 Net change Change (%)
Number of stores 178 160 18 11.3%
Number of net store openings 14 10 4 40.0%
Total selling space (sq. m) 598,308 584,914 13,394 2.3%
Total selling space added (sq. m) 9,634 6,485 3,149 48.6%
Group key operating indicators for 12M 2019
12M 2019 12M 2018
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
Group 2.4% 2.1% 0.3% (8.6%) (12.9%) 5.0%
Group LFL 0.9% 0.0% 0.9% (3.3%) (2.6%) (0.6%)
Group key operating indicators for the quarter
Q4 2019 Q4 2018
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
Group 1.0% 4.2% (3.0%) (6.6%) (12.9%) 7.3%
Group LFL (0.3%) 1.6% (1.8%) (2.7%) (3.4%) 0.8%
Underlying Group net retail revenue dynamics by quarter, YoY
Indicator Q1 2019 Q2 2019 Q3 2019 Q4 2019 12M 2019
Underlying Group net retail 0.9% 6.1% 4.5% 1.1% 3.0%
revenue
Key operating indicators by month
Indicator October November December
Net retail revenue 1.9% 3.3% (1.1%)
LFL net retail revenue 0.6% 1.9% (2.2%)
Customer traffic 3.0% 4.2% 5.1%
LFL customer traffic 0.5% 1.5% 2.7%
Average ticket (1.1%) (0.9%) (5.9%)
LFL average ticket 0.1% 0.4% (4.8%)
Underlying Group net retail revenue dynamics by month
Indicator October November December
Underlying Group net retail revenue 2.0% 3.3% (1.1%)
O'KEY: Operating review
Stores development
Indicator Q4 2019 Q4 2018 Net change Change (%)
Number of stores 78 78 - -
Number of net store openings - (1) 1 (100.0%)
Total selling space (sq. m) 529,055 528,124 931 0.2%
Total selling space added (sq. m) - (1,272) 1,272 (100.0%)
In Q4 2019, O'KEY did not open any new hypermarkets. As at 31 December
2019, the total number of stores was 78, with the total selling space at
529,055 sq. m.
Key operating indicators for 12M 2019
12M 2019 12M 2018
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
O'KEY (0.4%) (2.5%) 2.1% (11.1%) (18.2%) 8.6%
O'KEY LFL (0.4%) (1.8%) 1.4% (4.3%) (4.8%) 0.4%
Key operating indicators for the quarter
Q4 2019 Q4 2018
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
O'KEY (1.4%) 0.3% (1.7%) (8.9%) (17.9%) 11.0%
O'KEY LFL (1.4%) 0.4% (1.7%) (3.7%) (5.6%) 2.0%
Underlying O'KEY net retail revenue dynamics by quarter, YoY
Parameter Q1 2019 Q2 2019 Q3 2019 Q4 2019 12M 2019
Underlying O'KEY net retail (2.0%) 3.0% 2.0% (1.4%) 0.3%
revenue
Key operating indicators by month
Indicator October November December
Net retail revenue (0.8%) 0.7% (3.3%)
LFL net retail revenue (0.6%) 0.7% (3.2%)
Customer traffic (1.1%) 0.2% 1.4%
LFL customer traffic (0.8%) 0.2% 1.4%
Average ticket 0.3% 0.5% (4.6%)
LFL average ticket 0.2% 0.5% (4.6%)
Underlying O'KEY net retail revenue dynamics by month
Parameter October November December
Underlying O'KEY net retail revenue (0.6%) 0.7% (3.3%)
In Q4 2019, in line with the previously announced assortment improvement
strategy, the Company significantly increased direct imports of fruit and
vegetables, expanded the ranges of fresh and ultra-fresh products, and
also continued its private label development programme. We grew our
private label ranges across different price categories, including That's
What You Need, O'KEY and Selection of O'KEY, by 494 SKUs while
significantly expanding the range of seasonal products. We also rebranded
a number of private labels to reflect our new design concept. The fourth
quarter was marked by a significant increase in LFL turnover - by 26% for
the O'KEY and O'KEY Selection private labels.
In Q4 2019, O'KEY's own production showed strong positive dynamics in
LFL growth - up by 0.5%. During the reporting period, several new product
ranges were launched in our own production at the federal level, and the
Hot Bread project was started within the O'KEY Bakery segment to provide
our customers with freshly baked bread three times a day.
We note that weaker-than-expected LFL performance during the Q4 was mainly
driven by lower LFL in December, which was triggered by several one-off
factors, namely the renovation of one of our shopping malls, to be
completed in Q2, and abnormal weather conditions, leading to
weaker-than-expected sales in seasonal categories. Excluding these one-off
factors, sales in December would have been in line with the positive
trends we observed in October and November. It is also worth noting that
we observed trends of price deflation in December, driven by slowing
inflation.
DA!: Operating review
Stores development
Indicator Q4 2019 Q4 2018 Net change Change (%)
Number of stores 100 82 18 22.0%
Number of net store openings 14 11 3 27.3%
Total selling space (sq. m) 69,253 56,790 12,463 21.9%
Total selling space added (sq. m) 9,634 7,757 1,877 24.2%
In Q4 2019, in line with the previously announced plans, the Company
opened 14 new discounter stores in Moscow, Yaroslavl, Klin, Tver, Kaluga,
Tula, and Ryazan Regions, increasing the total selling space by
9,634 sq. m to 69,253 sq. m as at 31 December 2019.
Key operating indicators for 12M 2019
12M 2019 12M 2018
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
Discounters 31.7% 24.5% 5.8% 31.9% 27.8% 3.3%
LFL discounters 14.9% 8.6% 5.8% 12.7% 9.5% 1.2%
Key operating indicators for the quarter
Q4 2019 Q4 2018
Segment Net retail Traffic Average Net retail Traffic Average
revenue ticket revenue ticket
Discounters 26.8% 22.4% 3.7% 28.7% 22.1% 5.4%
LFL discounters 11.4% 7.5% 3.7% 12.2% 9.5% 2.5%
Key operating indicators by month
Indicator October November December
Net retail revenue 26.8% 30.1% 24.4%
LFL net retail revenue 11.4% 13.7% 9.7%
Customer traffic 20.9% 22.4% 23.7%
LFL customer traffic 6.0% 7.2% 9.2%
Average ticket 4.9% 6.3% 0.6%
LFL average ticket 5.1% 6.1% 0.4%
The Company demonstrated an increase in LFL revenue for Q4 2019, driven by
average ticket gains, and a continued growth in LFL traffic. In Q4 2019,
the Company continued improving its value proposition for customers,
enhanced the quality of goods and customer service in stores.
In Q4 2019, the Company rebranded several existing private label brands
and introduced new private label SKUs, expanded the range of products,
including seasonal ones.
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 31 December 2019, 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
31 December 2019 the Group employs more than 20,000 people.
For the full year 2018, revenue totaled RUB 161,303,411 thousand, EBITDA
reached RUB 8,644,008 thousand, and net loss for the period amounted to
RUB 599,755 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:
Anton Farlenkov
Corporate Development Director
+7 919 777 0220
2 Anton.farlenkov@okmarket.ru
3 www.okeygroup.lu
Alla Golovatenko
Public Relations Manager
+7 926 169 9117
4 alla.golovatenko@okmarket.ru
5 www.okeygroup.lu
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ISIN: US6708662019
Category Code: MSCH
TIDM: OKEY
LEI Code: 213800133YYU23T4L791
Sequence No.: 43596
EQS News ID: 964127
End of Announcement EQS News Service
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