REG-O'KEY Group S.A. O'KEY GROUP REPORTS FINANCIAL RESULTS FOR H1 2023
18/09/2023 08:00
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O'KEY Group S.A. (OKEY)
O'KEY GROUP REPORTS FINANCIAL RESULTS FOR H1 2023
18-Sep-2023 / 08:45 CET/CEST
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Press release
18 September 2023
O`KEY GROUP REPORTS FINANCIAL RESULTS FOR H1 2023
O`KEY Group S.A. (AIX, LSE, MOEX: OKEY, the “Group”), one of Russia’s
leading food retailers, has announced its financial results for the first
six months of 2023 based on condensed consolidated interim financial
statements.
All materials published by the Group are available on its website
1 okeygroup.lu.
All results are according to IFRS 16, unless stated otherwise.
H1 2023 financial highlights
• Total Group revenue increased by 1.7% YoY to RUB 99.5 bn driven by
both retail revenue and rental income.
• Group gross profit rose by 1.6% to RUB 22.7 bn, with gross margin
remaining flat YoY at 22.8% thanks to efficient procurement,
assortment management and logistics.
• Group EBITDA decreased by 5.4% YoY to RUB 7.1 bn, while EBITDA margin
declined by 0.6 pps YoY to 7.1%, mainly on the back of temporary SG&A
pressure from new store openings in the discounter segment. The Group
expects EBITDA margin to normalise by the year-end, as recently opened
discounters ramp up.
• The Group reported net loss of RUB 3.0 bn in H1 2023 compared to a RUB
0.6 bn net profit in H1 2022, mainly due to a non-cash foreign
exchange loss and an increase in finance costs.
• In July 2023, the National Credit Rating (NCR) agency assigned an A.ru
credit rating (Stable outlook) to O`KEY LLC, the main operating
subsidiary of O`KEY Group S.A.
For more details, please refer to the full press release at
2 https://www.okeygroup.lu/press-center/press-releases/2023/1859/.
Group profit and losses highlights in H1 2023
RUB mln H1 2023 H1 2022 ∆ YoY, %
Total Group revenue 99,478 97,803 1.7%
O`KEY 69,042 72,264 (4.5%)
DA! 30,436 25,539 19.2%
Gross profit 22,652 22,302 1.6%
Gross profit margin, % 22.8% 22.8% -
Selling, general and administrative expenses (21,762) (19,794) 9.9%
SG&A, % of revenue 21.9% 20.2% (1.6pp)
Other operating expenses, net (389) (551) (29.4%)
Finance costs, net (3,249) (2,685) 21.0%
Foreign exchange (loss)/gain (881) 1,533 n/a
Net (loss)/profit (2,977) 576 n/a
Group EBITDA 7,102 7,511 (5.4%)
Group EBITDA margin, % 7.1% 7.7% (0.6pp)
O`KEY EBITDA 5,447 5,765 (5.5%)
O`KEY EBITDA margin, % 7.9% 8.0% (0.1pp)
DA! EBITDA 1,656 1,745 (5.1%)
DA! EBITDA margin, % 5.4% 6.8% (1.4pp)
Group revenue
RUB mln H1 2023 H1 2022 ∆ YoY, %
Total Group revenue 99,478 97,803 1.7%
Retail revenue 98,463 96,814 1.7%
Rental income 1,015 989 2.6%
Total Group revenue increased by 1.7% YoY to RUB 99,478 mln driven by both
retail revenue and rental income. The Group’s retail revenue went up 1.7%
YoY to RUB 98,463 mln driven by DA! discounters and online revenue growth
in H1 2023. The Group’s rental income increased by 2.6% YoY to
RUB 1,015 mln in H1 2023.
Group net retail revenue and LFL revenue in H1 2023
RUB mln H1 2023 H1 2022 YoY, % LFL H1 2023/ H1 2022, %
O`KEY Group 98,463 96,814 1.7% (3.2%)
O`KEY hypermarkets 68,054 71,300 (4.6%) (5.4%)
DA! discounters 30,409 25,514 19.2% 3.1%
For more details, please refer to the Group’s 3 Q2 2023 Trading Update.
Group gross profit
In H1 2023, Group gross profit improved by 1.6% YoY to RUB 22,652 mln,
while gross margin stood flat YoY at 22.8%. The Group sustained its gross
margin thanks to efficient procurement and logistics optimisation along
with effective assortment and shrinkage management.
Group selling, general and administrative expenses
RUB mln H1 2023 % of revenue H1 2022 % of revenue ∆ YoY,
pps
Personnel costs 9,427 9.5% 8,494 8.7% 0.8
Depreciation and 5,717 5.7% 5,115 5.2% 0.5
amortisation
Communication and 2,702 2.7% 2,184 2.2% 0.5
utilities
Advertising and marketing 956 1.0% 1,029 1.1% (0.1)
Repairs and maintenance 820 0.8% 766 0.8% -
Insurance and bank 646 0.6% 606 0.6% -
commissions
Operating taxes 388 0.4% 421 0.4% -
Security expenses 380 0.4% 375 0.4% -
Legal and professional 292 0.3% 330 0.3% -
expenses
Materials and supplies 218 0.2% 206 0.2% -
Operating leases 187 0.2% 246 0.3% (0.1)
Other costs 28 0.0% 23 0.0% -
Total SG&A expenses 21,762 21.9% 19,794 20.2% 1.6
Group total SG&A expenses increased by 9.9% YoY to RUB 21,762 mln in
H1 2023. SG&A expenses as a percentage of revenue rose by 1.6 pps YoY to
21.9% in H1 2023, mainly due to the growth of personnel costs,
depreciation and amortisation (D&A), and communication and utilities
expenses.
In H1 2023, personnel costs increased by 11.0% YoY to RUB 9,427 mln and,
as a percentage of revenue, by 0.8 pps YoY to 9.5%. The growth was mainly
associated with new discounter openings, as well as wages indexation.
In H1 2023, D&A rose by 11.8% YoY to RUB 5,717 mln, and by 0.5 pps YoY to
5.7% of revenue, driven primarily by discounter chain growth.
Communication and utilities expenses grew by 23.7% YoY to RUB 2,702 mln,
and by 0.5 pps YoY as a percentage of revenue in H1 2023, mainly due to
tariff inflation and discounter chain growth.
As a result, Group EBITDA declined by 5.4% YoY to RUB 7,102 mln, while
EBITDA margin decreased by 0.6 pps YoY to 7.1% in H1 2023. The Group sees
the pressure on EBITDA margin from new discounter openings as temporary
and expects the margin to normalise by the year-end, as recently opened
discounters ramp up.
Net finance costs increased by 21.0% YoY to RUB 3,249 mln, mainly due to a
higher weighted average interest rate. A substantial part of interest
costs was attributable to non-current lease liabilities (accounted for in
accordance with IFRS 16).
In H1 2023, net foreign exchange loss amounted to RUB 881 mln compared to
a RUB 1,533 mln gain in H1 2022. The loss resulted from Russian rouble
devaluation in H1 2023, and was largely attributable to intragroup
US dollar-denominated loans, as well as lease contracts denominated in
foreign currencies. Losses from import operations had a relatively small
impact on the Group’s results. Net foreign exchange loss has a non-cash
nature.
Consequently, the Group reported a RUB 2,977 mln net loss in H1 2023
compared to the profit of RUB 576 mln in H1 2022.
Group cash flow
RUB mln H1 2023 H1 2022
Net cash (used in) from operating activities (521) 948
Net cash used in investing activities (2,249) (3,482)
Net cash (used in) from financing activities (3,079) 1,405
Net decrease in cash and cash equivalents (5,850) (1,129)
Effect of exchange rate on cash and cash equivalents (9) (373)
Net cash used in operating activities amounted to RUB 521 mln in H1 2023,
compared to RUB 948 mln cash from operating activities in H1 2022. That
resulted from an increase in investments in the Group's working capital in
H1 2023 on the back of a decrease in accounts payable.
Net cash used in investing activities amounted to RUB 2,249 mln in H1
2023, showing a decrease in comparison with RUB 3,482 mln of cash used in
H1 2022. In H1 2023, the Group invested approximately RUB 950 mln
(excluding VAT) in hypermarket business development and store renovation,
and over RUB 1,680 mln (excluding VAT) in the development of its
discounter business.
Net cash used in financing activities amounted to RUB 3,079 mln in
H1 2023, compared with the RUB 1,405 mln of net cash received from
financing activities in H1 2022. The dynamics resulted from the Group's
regular credit portfolio refinancing in H1 2023.
As of 30 June 2023, the Group had RUB 18,800 mln of available credit lines
in Russian roubles with fixed and floating interest rates, in respect of
which all conditions have been met. If necessary, proceeds from these
facilities may be used to finance operating and investing activities.
Group net debt position
RUB mln As of 30 June As of 30 June
2023 2022
EBITDA LTM 16,612 16,440
Total debt 48,442 44,396
Short-term debt1 6,198 10,122
Long-term debt 42,244 34,275
Cash & cash equivalents 5,921 7,946
Net debt 42,521 36,451
Total lease liabilities 25,215 23,967
Short-term lease liabilities 5,941 5,257
Long-term lease liabilities 19,274 18,711
Total interest-bearing liabilities (net of 67,735 60,418
сash & сash equivalents)
Total interest-bearing liabilities (net of 4.08 3.68
сash & сash 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 2023, the total interest-bearing liabilities (net of cash)
to LTM EBITDA ratio grew to 4.08x from 3.68x as of 30 June 2022, mainly
due to an increase in long-term debt and lease liabilities, as well as a
decrease in cash balance. As of 30 June 2023 and during the twelve-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 interim IFRS
financial statements, can be found at
https://www.okeygroup.lu/investors/result-center/ifrs-statements/.
For more information, please contact:
For investors
Natalya Belyavskaya
Head of Investor Relations
+7 495 663 6677, ext. 266
4 Natalya.Belyavskaya@okmarket.ru
5 www.okeygroup.lu
ABOUT O`KEY GROUP
O`KEY Group S.A. (AIX, LSE, MOEX: OKEY) is one of the leading grocery
retailers in Russia, operating hypermarkets under the O`KEY brand and
discounters under the DA! brand.
As of 30 June 2023, we operated 282 stores across Russia (77 hypermarkets
and 205 discounters) with a total selling space of 648,597 sq m. O`KEY
opened its first hypermarket in St Petersburg in 2002 and has since
demonstrated continuous growth. It was the first Russian food retailer to
launch e-commerce operations offering a full range of hypermarket products
for home delivery. The Group has e-commerce pick-up points in 31 O’KEY
hypermarkets: nine in Moscow, seventeen in St Petersburg, one in Sochi,
and four in Krasnodar. In 2015, we 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 – and employs
21,900 people.
In 2022, the Group’s revenue amounted to RUB 202.2 bn, and EBITDA reached
RUB 17.0 bn.
The O`KEY Group shareholder structure is as follows: NISEMAX Co Ltd –
49.11%. GSU Ltd – 34.14%, free-float and other holders – 16.75%.
DISCLAIMER
These materials contain statements about future events and expectations
that are forward-looking statements. These statements typically include
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 that 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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Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ISIN: US6708662019
Category Code: IR
TIDM: OKEY
LEI Code: 213800133YYU23T4L791
Sequence No.: 271897
EQS News ID: 1727687
End of Announcement EQS News Service
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