REG-O'KEY Group S.A. O'KEY GROUP REPORTS UNAUDITED FINANCIAL RESULTS FOR H1 2021 DA! DISCOUNTERS SHOW A 46.1% EBITDA GROWTH
31/08/2021 07:50
============
O'KEY Group S.A. (OKEY)
O'KEY GROUP REPORTS UNAUDITED FINANCIAL RESULTS FOR H1 2021 DA!
DISCOUNTERS SHOW A 46.1% EBITDA GROWTH
31-Aug-2021 / 08:45 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
31 August 2021
O'KEY GROUP REPORTS UNAUDITED FINANCIAL RESULTS FOR H1 2021 DA!
DISCOUNTERS SHOW A 46.1% EBITDA GROWTH
O'KEY Group S.A. (LSE, MOEX: OKEY, the "Group" or the "Company"), one of
Russia's leading food retailers, today announces its financial results for
the first six months of 2021 based on condensed consolidated interim
financial statements reviewed by auditors.
All materials published by the Group are available on its website,
1 okeygroup.lu.
All results are presented under IFRS 16 unless stated otherwise.
H1 2021 financial highlights
• Group revenue increased by 4.2% YoY to RUB 88,662 mln
• O'KEY revenue grew by 0.8% YoY to RUB 73,001 mln from the high base of
H1 2020
• DA! revenue rose by 23.9% YoY to RUB 15,661 mln, driven by a 10.2% LFL
revenue growth and the expansion programme
• Group gross profit increased by 2.6% YoY to RUB 19,486 mln, while
gross profit margin stood at 22.0%
• Group EBITDA amounted to RUB 6,575 mln, and EBITDA margin was 7.4%
• O'KEY hypermarkets EBITDA reached RUB 5,904 mln, with EBITDA margin of
8.1%
• DA! discounters EBITDA improved by 46.1% YoY to RUB 671 mln, led by
the chain's ramp-up
Armin Burger, O'KEY Group CEO, commented:
"The Group delivered a strong set of financial results fully in-line with
our expectations. The revenue growth was driven by both hypermarkets and
discounters. Our strategy based on a combination of clearly positioned
store formats enables us to cover all customer segments and benefit from
the synergies.
"O'KEY hypermarkets demonstrated decent results, especially given the
challenging base of H1 2020. The Group is strongly positioned as one of
the leading hypermarket players in Russia, and continued to improve the
store portfolio to enhance sales density and streamline the cost base. We
are also reformatting and renovating hypermarkets in our core regions to
further strengthen their competitiveness in a fast-changing environment.
O'KEY is developing a multi-channel e-commerce shopping model with its own
platform in efficient collaboration with delivery operators. We are
pleased to post a 62.6% YoY online revenue growth in H1 2021.
"DA! discounters continued to outperform the market and increased their
revenue by almost 24% YoY with an impressive 10% like-for-like growth in
H1 2021 delivered on top of their 31.3% LFL performance in H1 2020. As the
chain keeps ramping-up, we see a substantial profitability improvement. We
expect discounters to grow further their top- and bottom-line and reach up
to 50% of the Group's revenue in a four-year horizon.
"We reiterate our guidance and expect a low-single-digit LFL growth at
hypermarkets and a double-digit LFL growth at DA! discounters in 2021. We
plan to open 35-40 DA! discounters, and O'KEY will relaunch 3 newly
renovated hypermarkets by the end of 2021."
Group net retail revenue and LFL revenue in H1 2021
RUB mln H1 2021 H1 2020 YoY, % LFL H1 2021/ LFL H1 2020/
H1 2020, % H1 2019, %
O'KEY Group 87,698 84,335 4.0% 0.5% 7.3%
O'KEY hypermarkets 72,061 71,718 0.5% (1.2%) 4.3%
DA! discounters 15,637 12,617 23.9% 10.2% 31.3%
For more details, please refer to the Group's 2 Q2 2021 Trading Update.
Group profit and losses highlights in H1 2021
RUB mln H1 2021 H1 2020 ∆ YoY, %
Total Group revenue 88,662 85,059 4.2%
O'KEY 73,001 72,417 0.8%
DA! 15,661 12,642 23.9%
Gross profit 19,486 18,993 2.6%
Gross profit margin, % 3 1 22.0% 22.3% (0.3pp)
Selling, general and administrative expenses (17,275) (16,317) 5.9%
SG&A, as % of revenue 19.5% 19.2% 0.3pp
Other operating (expenses)/income, net (266) (413) (35.7%)
Finance costs, net (2,343) (2,406) (2.6%)
Foreign exchange gain/ (loss) 539 (1,082) >100%
Net profit (loss) 152 (900) >100%
Group EBITDA 6,575 6,698 (1.8%)
Group EBITDA margin, % 7.4% 7.9% (0.5pp)
O'KEY EBITDA 5,904 6,239 (5.4%)
O'KEY EBITDA margin, % 8.1% 8.6% (0.5pp)
DA! EBITDA 671 459 46.1%
DA! EBITDA margin, % 4.3% 3.6% 0.7pp
Group revenue
RUB mln H1 2021 H1 2020 ∆ YoY, %
Total Group revenue 88,662 85,059 4.2%
Retail revenue 87,698 84,335 4.0%
Rental income 964 723 33.3%
In H1 2021, total Group revenue increased by 4.2% YoY to RUB 88,662 mln.
Group retail revenue increased by 4.0% YoY to RUB 87,698 mln in H1 2021,
driven by both O'KEY and DA! revenue growth. Rental income grew by 33.3%
YoY to RUB 964 mln in H1 2021.
Group gross profit
The Group's gross profit increased by 2.6% YoY to RUB 19,486 mln, driven
by retail and rental income growth. The Group's gross margin decreased by
0.3 pps YoY to 22.0% on the back of increased tariffs for external
transportation services, logistics staff salaries inflation, and the
launch of the company's new distribution centre in Q4 2020. However, this
was partially offset by improvements in commercial margin. Shrinkage costs
in H1 2021 were flat YoY as a percentage of revenue.
Group selling, general and administrative expenses
RUB mln H1 2021 % of H1 2020 % of ∆ YoY,
revenue revenue pps
Personnel costs 7,430 8.4% 7,042 8.3% 0.1
Depreciation and amortisation 4,347 4.9% 4,017 4.7% 0.2
Communication and utilities 1,984 2.2% 1,812 2.1% 0.1
Advertising and marketing 899 1.0% 955 1.1% (0.1)
Repair and maintenance 648 0.7% 614 0.7% -
Insurance and bank commissions 524 0.6% 503 0.6% -
Operating taxes 345 0.4% 431 0.5% (0.1)
Security expenses 349 0.4% 359 0.4% -
Legal and professional expenses 355 0.4% 335 0.4% -
Materials and supplies 182 0.2% 212 0.2% -
Variable lease expenses and
expenses relating to short-term and 185 0.2% 15 - 0.2
low-value leases
Other costs 27 - 22 - -
Total Group SG&A 17,275 19.5% 16,317 19.2% 0.3
Group SG&A expenses increased by 5.9% YoY to RUB 17,275 mln, and, as a
percentage of revenue, rose by 0.3 pps YoY to 19.5% in H1 2021.
Personnel costs, as a percentage of revenue, grew by 0.1 pps YoY to 8.4%,
mainly due to the hypermarkets personnel wages indexation in H1 2021,
offset partially by higher staff productivity and the discounter chain
ramp-up.
Depreciation and amortisation (D&A) expenses increased by 8.2% YoY to RUB
4,347 mln, driven mainly by lease terms revision in the discounter
segment.
Communication and utilities expenses increased, as a percentage of
revenue, by 0.1 pps YoY to 2.2% in H1 2021. This was largely attributable
to the utility tariffs inflation and the discounter chain growth.
Advertising and marketing expenses decreased, as a percentage of revenue,
by 0.1 pps YoY to 1.0%, as a result of increased efficiency of the loyalty
programme and optimisation of the advertising channels mix.
In H1 2021, operating taxes decreased, as a percentage of revenue, by 0.1
pps YoY to 0.4%, led by the recalculation of property tax based on
cadastral revaluation of several assets, as well as a decrease in the
amount of non-applicable VAT compared to H1 2020.
In H1 2020, during the pandemic-related lockdowns, the Group temporarily
re-negotiated rental terms and brought variable rental costs down. In H1
2021, these lease incentives were no longer in effect, and variable lease
expenses increased by 0.2 pps YoY to 0.2% in H1 2021.
Group other operating expenses
Group other operating expenses decreased by 35.7% YoY to RUB 266 mln in H1
2021 from RUB 413 mln in H1 2020. In H1 2021, a non-current assets
impairment loss of RUB 372 mln was recognised, offset partially by a RUB
122 mln gain from investment property revaluation. Additionally, a one-off
loss of RUB 360 mln from non-current assets disposal related to the store
and land plots portfolio optimisation was recognised in H1 2020. The
above-mentioned items are of non-cash nature.
Group net profit
Net finance costs decreased by 2.6% YoY to RUB 2,343 mln in H1 2021,
driven by a decline in the weighted average interest rate. A substantial
part of interest costs was attributable to non-current lease liabilities
(under IFRS 16).
In H1 2021, the Group recognised net foreign exchange gain of RUB 539 mln,
compared to a RUB 1,082 mln loss in H1 2020. The Group's foreign exchange
gain / loss was mainly attributable to intragroup US-dollar-denominated
loans, as well as lease contracts denominated in foreign currencies, while
losses from import operations had a relatively small impact on the Group's
results.
The Group recorded a net profit of RUB 152 mln in H1 2021, compared to a
loss of RUB 900 mln in H1 2020.
Group cash flow
RUB mln H1 2021 H1 2020
Net cash from / (used in) operating activities 804 (468)
Net cash used in investing activities (1,786) (1,614)
Net cash used in financing activities (4,344) (1,234)
Net decrease in cash and cash equivalents (5,326) (3,316)
Effect of exchange rate on cash and cash equivalents (7) (10)
Net cash from operating activities amounted to RUB 804 mln in H1 2021,
compared to a RUB 468 mln outflow in H1 2020. In H1 2020, substantial
investments in working capital were made to ensure shelf availability and
meet customer demand during the months of the pandemic.
Net cash used in investing activities amounted to RUB 1,786 mln in H1
2021, in comparison with RUB 1,614 mln worth of investments in H1 2020. In
H1 2021, the Group invested over RUB 870 mln (excluding VAT) in the
development of the hypermarket business, and over RUB 1,095 mln (excluding
VAT) in the discounter business operations. In H1 2021, the Group sold a
land plot and received RUB 180 mln of cash proceeds.
Net cash used in financing activities amounted to RUB 4,344 mln in H1
2021, compared to RUB 1,234 mln in H1 2020. The increase was mainly due to
a RUB 1,175 mln bonds redemption, as well as a partial repayment of
long-term loans amounting to RUB 973 mln in H1 2021.
As of 30 June 2021, the Group had RUB 17,400 mln of undrawn, committed
borrowing facilities available in Russian roubles on a fixed and floating
basis in respect of which all conditions had been met. Proceeds from these
facilities may be used to finance operating and investing activities if
necessary.
Group net debt position
As of 30 As of 30
RUB mln
June 2021 June 2020
EBITDA LTM 14,709 14,419
Total debt 36,556 35,077
Short-term debt1 9,661 7,469
Long-term debt 26,895 27,608
Cash & cash equivalents 2,380 2,181
Net debt 34,176 32,895
Total lease liabilities 24,241 23,640
Short-term lease liabilities 4,729 4,421
Long-term lease liabilities 19,512 19,219
Total interest-bearing liabilities (net of сash & сash 58,417 56,535
equivalents)
Total interest-bearing liabilities (net of сash & сash 3.97х 3.92x
equivalents) / EBITDA LTM
1 Short-term debt does not include interest accrued on loans and
borrowings.
The Group's financial position remained stable during the reporting
period. As of 30 June 2021, the total interest-bearing liabilities (net of
cash) to EBITDA ratio stood at 3.97x. As of 30 June 2021 and during the
six-month period then ended, the Group complied with all of its loan
covenants.
Group interim IFRS report
The Group's interim report, including the full set of reviewed IFRS
interim financial statements, can be found at
4 https://okeygroup.lu/investors/result-center/ifrs-statements/.
O'KEY Group S.A. (LSE, MOEX: OKEY) is pleased to invite the investment
community to join the Group's management conference call to discuss H1
2021 IFRS interim financial results.
Date: 31 August 2021
Time:
• 5.00 p.m. (Moscow)
• 3.00 p.m. (London)
• 10.00 a.m. (New York)
Participants:
• Armin Burger, CEO
• Konstantin Arabidis, CFO
• Natalya Belyavskaya, IRO
The conference call details are provided below. Please dial in 5-10
minutes prior to the start time using the number / Confirmation Code
below:
Russia: Local access +7 495 646 9190
Toll free 8 10 8002 8675011
UK: Local access +44 (0) 330 336 9434
Toll free 0800 279 7209
Europe: Local access +49 (0) 69 2222 2018
Toll free 0800 589 4631
USA: Local access +1 646-828-8193
Toll free 888-394-8218
Conference ID: 5961732
For further information please contact:
For investors For media
Natalya Belyavskaya Alla Golovatenko
Head of Investor Relations Head of Public Relations
+7 495 663 6677 ext. 266 +7 495 663 6677 ext. 496
5 Natalya.Belyavskaya@okmarket.ru 7 alla.golovatenko@okmarket.ru
6 www.okeygroup.lu 8 www.okeygroup.lu
ABOUT O'KEY GROUP
As of 30 June 2021, the Group operated 199 stores across Russia (77
hypermarkets and 122 discounters) with total selling space of 602,164
square meters. The company opened its first hypermarket in St. Petersburg
in 2002 and has since demonstrated continuous growth. O'KEY was the first
Russian food retailer to launch e-commerce operations in St. Petersburg
and Moscow, offering a full range of hypermarket products for home
delivery. The Group has six e-commerce pick-up points in Moscow and six
e-commerce pick-up points in St. Petersburg. In 2015, the Group launched
the first discount chain in Russia under the DA! brand. The Group operates
five distribution centres in Russia - three in Moscow and two in St.
Petersburg. The Group employs more than 20,000 people. In 2020, Group's
revenue amounted to RUB 174.3 billion, while EBITDA reached RUB 14.8
billion. The O'KEY shareholder structure is as follows: NISEMAX Co Ltd -
44.84%, GSU Ltd - 29.53%, free float - 25.63%.
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.
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9 1 In the reporting period, the Group reclassified certain expenses
relating to in-store deli from selling, general and administrative
expenses to cost of goods sold. For comparison purposes, the respective
changes in the presentation have been applied to the H1 2020 profit and
loss statement. The changes do not have any effect on EBITDA or net
income.
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ISIN: US6708662019
Category Code: IR
TIDM: OKEY
LEI Code: 213800133YYU23T4L791
Sequence No.: 121070
EQS News ID: 1229866
End of Announcement EQS News Service
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