REG - X5 Retail Group N.V - X5 Reports 18.2% Revenue Growth in 2022
17/03/2023 07:00
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RNS Number : 2722T X5 Retail Group N.V. 17 March 2023
X5 reports 18.2% revenue growth in 2022, 7.3% adj. EBITDA margin pre-IFRS 16
+18.2 % y-o-y
Revenue growth in 2022
driven by solid like-for-like (LFL)(1) sales and selling space expansion
+46.6 % y-o-y
Digital business (express delivery, Vprok.ru, 5Post and Mnogo Lososya) net
sales growth in 2022
Digital business net sales amounted to RUB 70.4 billion, which comprised 2.7%
of consolidated FY 2022 revenue.
24.4 % -108 b.p.
Gross margin under IFRS 16 in 2022
(-104 b.p. to 24.1% pre-IFRS 16(2))
driven predominantly by price investments
11.7 % -56 b.p.
Adjusted EBITDA(3) margin under IFRS 16 in 2022
(-17 b.p. to 7.3% pre-IFRS 16)
1.7% -20 b.p.
Net profit margin under IFRS 16 in 2022
(-19 b.p. to 2.0% pre-IFRS 16)
2.58x
Net debt/EBITDA ratio under IFRS 16 as of 31 December 2022
(1.02x pre-IFRS 16)
Amsterdam, 17 March 2023 - X5 Retail Group N.V. ("X5" or the "Company", LSE
and MOEX ticker: FIVE), a leading Russian food retailer that operates the
Pyaterochka, Perekrestok and Chizhik retail chains, today released its audited
financial statements for the year ended 31 December 2022 prepared in
accordance with International Financial Reporting Standards, as adopted in the
European Union.
Igor Shekhterman, X5 Chief Executive Officer, commented:
"Amid a turbulent 2022, X5 delivered on its core commitments as the country's
leading food retailer to ensure product availability and affordable prices,
all the while continuing to expand our market presence and customer offering.
Despite significant external factors that continue to impact the Company as we
enter 2023, including ongoing inflation and supply chain instability, we are
confident that X5's strategy of regional expansion, investment in retail
formats with more accessible pricing and continued development of our online
businesses has created a solid foundation for maintaining our strong
performance and high growth level in the year to come.
Despite the challenging external environment, X5 demonstrated solid
performance in 2022. Revenue growth accelerated to 18.2% year-on-year in 2022
and we maintained a 7.3% adjusted EBITDA margin pre-IFRS 16. Meanwhile, net
sales from our digital businesses - including e-grocery, the 5Post delivery
service and the Mnogo Lososya ready-meal delivery service - rose 46.6%
year-on-year to RUB 70.4 billion and accounted for 2.7% of our consolidated
revenue for 2022.
A notable move that contributed to our success was the decision to spin off
our e-grocery businesses into a separate entity within X5 Group, called X5
Digital, in summer 2022. This has enabled us to develop our online businesses
with maximum speed and flexibility by relying on our own infrastructure and
commercial capabilities.
The active expansion of our Chizhik hard discounter format continued to pay
off, as customers increasingly sought the best value offer for their money.
Revenue from Chizhik grew 12-fold year-on-year to nearly RUB 36 billion in
2022, with X5 opening hundreds of new stores and six distribution centres for
the retail chain during this period. We remain committed to meeting the needs
of society and tailoring our customer value proposition to changing demands,
even as this continues to impact our commercial margin. Given the current
macroeconomic situation and real disposable income dynamics in Russia, the
development of Chizhik, along with our Pyaterochka proximity store network,
will remain key priorities for the Company in 2023.
The past year saw X5 expand to new regions and diversify our supplier base, as
well as broaden our presence across the customer journey to offer a superior
shopping experience. In 2022 we reached a strategic partnership with two
leading retailers in Eastern Siberia, which will enable X5 to significantly
grow our footprint in the region, and signed an agreement to begin developing
the food market of the Russian Far East. We also partnered with more than
1,100 new suppliers across Russia and brought the total share of SMEs in our
supplier base to around 70% in 2022, as part of our ongoing effort to
diversify our product offering and use our extensive network to empower local
businesses throughout the country. And we took a milestone step towards
providing a seamless shopping experience by introducing the unified X5 Club
loyalty programme, which currently serves customers of Pyaterochka and
Perekrestok and is planned to integrate other Group businesses and services in
the future.
Perhaps the proudest aspect of our work in 2022 is X5's commitment to social
wellbeing among the customers and communities we serve. In 2022, we donated
over 518 tonnes of food through our Basket of Kindness project and helped more
than 5,800 people in need through our pilot food-sharing project, among a
number of other initiatives. X5 also contributes to economic development in
existing and new regions where the Company operates: in 2022, we created
12,000 new jobs, including through our entry into Eastern Siberia. Our social
work continues alongside our extensive environmental initiatives, which are
focused on reducing X5's negative impact on the environment, boosting the use
of recycled and sustainable materials, and transitioning to renewable energy
use.
Finally, I would like to thank all X5 Group employees for their exemplary work
and dedication during a particularly challenging time. Over the past year, our
team members not only continued to put in their best effort at the workplace
but also made the time to invest in their professional development and help
the communities around them. One of the ways X5 has given back to employees is
through our recently launched "Director - Store Partner" programme, which
offers store directors in our Pyaterochka and Perekrestok networks the
opportunity to manage their stores with more freedom and flexibility under a
unique entrepreneurial model. We plan to expand this motivational programme to
more X5 stores in the future as part of our broader vision of empowering
employees to become a driver of growth.
Looking ahead, I am confident that our ongoing focus on supporting customers,
suppliers and employees in today's difficult market conditions will ultimately
reinforce X5's standing as a reliable and socially responsible partner,
ensuring our reputation as the domestic industry leader for years to come."
Profit and loss statement highlights(4)
IFRS 16 Pre-IFRS 16
RUB mln Q4 2022 Q4 2021 change y-o-y, % or multiple Q4 2022 Q4 2021 change y-o-y, % or multiple
Revenue 705,183 607,530 16.1 705,183 607,530 16.1
incl. net retail sales(5) 702,134 603,567 16.3 702,134 603,567 16.3
Pyaterochka (incl. express delivery) 560,440 491,290 14.1 560,440 491,290 14.1
Perekrestok (incl. express delivery) 104,400 97,986 6.5 104,400 97,986 6.5
Karusel 2,355 6,993 (66.3) 2,355 6,993 (66.3)
Chizhik 15,233 1,854 8x 15,233 1,854 8x
Gross profit 160,332 149,510 7.2 158,047 147,485 7.2
Gross profit margin, % 22.7 24.6 (187) b.p. 22.4 24.3 (186) b.p.
Adj. EBITDA 66,841 67,462 (0.9) 36,574 40,494 (9.7)
Adj. EBITDA margin, % 9.5 11.1 (163) b.p. 5.2 6.7 (148) b.p.
EBITDA 66,105 67,095 (1.5) 35,838 40,127 (10.7)
EBITDA margin, % 9.4 11.0 (167) b.p. 5.1 6.6 (152) b.p.
Operating profit 24,368 28,085 (13.2) 13,825 19,010 (27.3)
Operating profit margin, % 3.5 4.6 (117) b.p. 2.0 3.1 (117) b.p.
Net profit 2,083 7,955 (73.8) 5,853 9,570 (38.8)
Net profit margin, % 0.3 1.3 (101) b.p. 0.8 1.6 (75) b.p.
IFRS 16 Pre-IFRS 16
RUB mln FY 2022 FY 2021 change y-o-y, % or multiple FY 2022 FY 2021 change y-o-y, % or multiple
Revenue 2,605,232 2,204,819 18.2 2,605,232 2,204,819 18.2
incl. net retail sales(6) 2,596,086 2,194,477 18.3 2,596,086 2,194,477 18.3
Pyaterochka (incl. express delivery) 2,122,793 1,793,676 18.3 2,122,793 1,793,676 18.3
Perekrestok (incl. express delivery) 385,495 348,941 10.5 385,495 348,941 10.5
Karusel 15,693 31,742 (50.6) 15,693 31,742 (50.6)
Chizhik 35,893 2,940 12x 35,893 2,940 12x
Gross profit 635,196 561,317 13.2 626,744 553,363 13.3
Gross profit margin, % 24.4 25.5 (108) b.p. 24.1 25.1 (104) b.p.
Adj. EBITDA 305,529 271,023 12.7 189,468 164,197 15.4
Adj. EBITDA margin, % 11.7 12.3 (56) b.p. 7.3 7.4 (17) b.p.
EBITDA 302,849 267,850 13.1 186,788 161,024 16.0
EBITDA margin, % 11.6 12.1 (52) b.p. 7.2 7.3 (13) b.p.
Operating profit 138,118 117,572 17.5 97,632 84,359 15.7
Operating profit margin, % 5.3 5.3 (3) b.p. 3.7 3.8 (8) b.p.
Net profit 45,188 42,738 5.7 52,248 48,513 7.7
Net profit margin, % 1.7 1.9 (20) b.p. 2.0 2.2 (19) b.p.
Revenue
Revenue growth reached 16.1% year-on-year in Q4 2022. Net retail sales
increased by 16.3%, driven by a combination of 8.3% selling space growth and
7.9% LFL sales growth, while X5's digital business sales grew by 35.8% y-o-y.
Selling space by format, square metres (sqm)
31 DECEMBER 2022 31 DECEMBER 2021 CHANGE VS
31 DECEMBER 2021, %
Selling space, sqm
Pyaterochka 7,497,056 7,048,488 6.4
Perekrestok 1,085,496 1,098,905 (1.2)
Karusel 49,225 128,063 (61.6)
Chizhik 152,370 20,327 7x
X5 Group(7) 9,107,479 8,409,757 8.3
Q4 and FY 2022 LFL store performance by format, % change y-o-y
In Q4 2022, LFL sales increased by 7.9%, supported by solid LFL sales growth
at Pyaterochka and Perekrestok at 8.4% and 5.3%, respectively. LFL traffic was
the main driver of LFL sales in Q4 2022, with the LFL basket in positive
territory at 3.5% year-on-year.
Q4 2022 FY 2022
SALES TRAFFIC BASKET SALES TRAFFIC BASKET
Pyaterochka 8.4 4.7 3.6 11.7 3.5 7.9
Perekrestok 5.3 1.2 4.0 7.1 0.0 7.1
X5 Group(8) 7.9 4.3 3.5 10.8 3.1 7.5
For more details on net retail sales performance, please refer to X5's Q4 2022
Trading Update
(https://www.x5.ru/wp-content/uploads/2023/01/q4_2022_trading_update_eng.pdf)
.
(https://www.x5.ru/ru/PublishingImages/Pages/Media/News/Trading_Update_Q3%202021__RUS.pdf)
Gross profit margin
Gross profit margin under IFRS 16 decreased by 187 b.p. year-on-year to 22.7%
(by 186 b.p. year-on-year to 22.4% pre-IFRS 16) in Q4 2022. This was driven by
a decreasing commercial margin on the back of price investments as well as the
aggressive expansion of the Chizhik hard discounter network.
Gross profit margin for the full year 2022 declined by 108 b.p. under IFRS 16
(declined by 104 b.p pre-IFRS 16), driven by a decreasing commercial margin on
the back of price investments and the aggressive expansion of the Chizhik
retail chain.
Selling, general and administrative (SG&A) expenses (excl. D&A&I
and the impact of the Karusel transformation)
IFRS 16 Pre-IFRS 16
RUB mln Q4 2022 Q4 2021 change y-o-y, % Q4 2022 Q4 2021 change y-o-y, %
Staff costs (58,057) (50,332) 15.3 (58,057) (50,332) 15.3
% of revenue 8.2 8.3 (5) b.p. 8.2 8.3 (5) b.p.
incl. LTI and share-based payments (729) (516) 41.3 (729) (516) 41.3
staff costs excl. LTI and share- 8.1 8.2 (7) b.p. 8.1 8.2 (7) b.p.
based payments as % of revenue
Lease expenses (5,424) (4,296) 26.3 (30,581) (27,498) 11.2
% of revenue 0.8 0.7 6 b.p. 4.3 4.5 (19) b.p.
Utilities (14,224) (12,487) 13.9 (14,224) (12,487) 13.9
% of revenue 2.0 2.1 (4) b.p. 2.0 2.1 (4) b.p.
Other store costs (6,454) (6,150) 4.9 (6,677) (6,360) 5.0
% of revenue 0.9 1.0 (10) b.p. 0.9 1.0 (10) b.p.
Third-party services (7,702) (8,017) (3.9) (7,600) (7,923) (4.1)
% of revenue 1.1 1.3 (23) b.p. 1.1 1.3 (23) b.p.
Other expenses (8,219) (7,824) 5.0 (10,257) (9,127) 12.4
% of revenue 1.2 1.3 (12) b.p. 1.5 1.5 (5) b.p.
SG&A (excl. D&A&I and the impact of the Karusel transformation) (100,080) (89,106) 12.3 (127,396) (113,727) 12.0
% of revenue 14.2 14.7 (47) b.p. 18.1 18.7 (65) b.p.
SG&A (excl. D&A&I, LTI, share-based payments and the impact of the (99,351) (88,590) 12.1 (126,667) (113,211) 11.9
Karusel transformation)
% of revenue 14.1 14.6 (49) b.p. 18.0 18.6 (67) b.p.
IFRS 16 Pre-IFRS 16
RUB mln FY 2022 FY 2021 change y-o-y, % FY 2022 FY 2021 change y-o-y, %
Staff costs (209,940) (185,572) 13.1 (209,940) (185,572) 13.1
% of revenue 8.1 8.4 (36) b.p. 8.1 8.4 (36) b.p.
incl. LTI and share-based payments (2,517) (3,011) (16.4) (2,517) (3,011) (16.4)
staff costs excl. LTI and share-based payments as % of revenue 8.0 8.3 (32) b.p. 8.0 8.3 (32) b.p.
Lease expenses (19,624) (14,452) 35.8 (117,825) (105,451) 11.7
% of revenue 0.8 0.7 10 b.p. 4.5 4.8 (26) b.p.
Utilities (51,309) (45,539) 12.7 (51,309) (45,539) 12.7
% of revenue 2.0 2.1 (10) b.p. 2.0 2.1 (10) b.p.
Other store costs (23,685) (22,568) 4.9 (24,573) (23,418) 4.9
% of revenue 0.9 1.0 (11) b.p. 0.9 1.1 (12) b.p.
Third-party services (20,187) (22,016) (8.3) (19,796) (21,718) (8.8)
% of revenue 0.8 1.0 (22) b.p. 0.8 1.0 (23) b.p.
Other expenses (30,118) (26,881) 12.0 (36,714) (31,518) 16.5
% of revenue 1.2 1.2 (6) b.p. 1.4 1.4 (2) b.p.
SG&A (excl. D&A&I and impact from the Karusel transformation) (354,863) (317,028) 11.9 (460,157) (413,216) 11.4
% of revenue 13.6 14.4 (76) b.p. 17.7 18.7 (108) b.p.
SG&A (excl. D&A&I, LTI, share-based payments and impact from the (352,346) (314,017) 12.2 (457,640) (410,205) 11.6
Karusel transformation)
% of revenue 13.5 14.2 (72) b.p. 17.6 18.6 (104) b.p.
In Q4 2022, SG&A expenses excluding D&A&I, LTI, share-based
payments and the impact of the Karusel transformation under IFRS 16 as a
percentage of revenue decreased by 49 b.p. to 14.1% (decreased by 67 b.p. to
18.0% pre-IFRS 16), primarily driven by decreased staff costs, other store
costs, third party services and other expenses as a percentage of revenue.
Staff costs (excluding LTI and share-based payments) as a percentage of
revenue decreased by 7 b.p. year-on-year in Q4 2022 to 8.1%, mainly due to the
operating leverage effect as well as a balanced approach to targeted salary
increases.
LTI and share-based payment expenses amounted to RUB 729 million in Q4 2022.
The Company finished recognition of expense related to the LTI programme for
2018-2020 and Chizhik and continued accruing liability for the new LTI
programme for 2021-2023 and the new LTI programme for new businesses (Mnogo
Lososya and 5Post).
Lease expenses under IFRS 16 as a percentage of revenue in Q4 2022 increased
by 6 b.p. year-on-year to 0.8% mainly due to a higher number of revenue-linked
leases and reverse franchising agency fees. The decrease in pre-IFRS 16 lease
expenses by 19 b.p. to 4.3% was caused by a positive operating leverage effect
and measures taken to reduce lease expenses, partially compensated by a higher
number of revenue-linked leases.
Other store costs under IFRS 16 as a percentage of revenue in Q4 2022
decreased by 10 b.p. year-on-year (falling by 10 b.p. pre-IFRS 16), mainly due
to a positive operating leverage effect.
Third-party service expenses under IFRS 16 as a percentage of revenue in Q4
2022 decreased by 23 b.p. year-on-year to 1.1% (down 23 b.p. to 1.1% pre-IFRS
16), mainly due to lower marketing expenses.
Other expenses under IFRS 16 as a percentage of revenue in Q4 2022 decreased
by 12 b.p. year-on-year to 1.2% (down 5 b.p. to 1.5% pre-IFRS 16), mainly due
to a positive operating leverage effect and measures taken to reduce expenses.
In 2022, SG&A expenses excluding D&A&I, LTI, share-based payments
and the impact of the Karusel transformation under IFRS 16 as a percentage of
revenue decreased by 72 b.p. to 13.5% (decreased by 104 b.p. to 17.6% pre-IFRS
16), driven primarily by lower staff costs, utilities, other store costs and
third-party services as a percentage of revenue.
Lease/sublease and other income(9)
As a percentage of revenue, the Company's income from leases, subleases and
other operations under IFRS 16 totalled 0.8%, a decrease of 23 b.p.
year-on-year in Q4 2022 (a decrease of 27 b.p. to 0.7% pre-IFRS 16), driven by
lower income from sales of recyclables, lower fixed/sublease fees as
percentage of revenue and the absence of depositary service fee income under
the GDR programme.
EBITDA and EBITDA margin
IFRS 16 Pre-IFRS 16
RUB mln Q4 2022 Q4 2021 change Q4 2022 Q4 2021 change
y-o-y, % y-o-y, %
Gross profit 160,332 149,510 7.2 158,047 147,485 7.2
Gross profit margin, % 22.7 24.6 (187) b.p. 22.4 24.3 (186) b.p.
SG&A (excl. D&A&I, LTI, share-based payments and the effect of the (99,351) (88,590) 12.1 (126,667) (113,211) 11.9
Karusel transformation)
% of revenue 14.1 14.6 (49) b.p. 18.0 18.6 (67) b.p.
Net impairment losses on financial assets (48) 73 n/a (48) 73 n/a
% of revenue 0.01 (0.01) 2 b.p. 0.01 (0.01) 2 b.p.
Lease/sublease and other income (excl. the effect of the Karusel 5,908 6,469 (8.7) 5,242 6,147 (14.7)
transformation)
% of revenue 0.8 1.1 (23) b.p. 0.7 1.0 (27) b.p.
Adj. EBITDA 66,841 67,462 (0.9) 36,574 40,494 (9.7)
Adj. EBITDA margin, % 9.5 11.1 (163) b.p. 5.2 6.7 (148) b.p.
LTI, share-based payments and other one-off remuneration payment expenses and (729) (516) 41.3 (729) (516) 41.3
SSC
% of revenue 0.1 0.1 2 b.p. 0.1 0.1 2 b.p.
Effect of the Karusel transformation (7) 150 n/a (7) 150 n/a
% of revenue (0.00) 0.02 (3) b.p. (0.00) 0.02 (3) b.p.
EBITDA 66,105 67,095 (1.5) 35,838 40,127 (10.7)
EBITDA margin, % 9.4 11.0 (167) b.p. 5.1 6.6 (152) b.p.
IFRS 16 Pre-IFRS 16
RUB mln FY 2022 FY 2021 change FY 2022 FY 2021 change
y-o-y, % y-o-y, %
Gross profit 635,196 561,317 13.2 626,744 553,363 13.3
Gross profit margin, % 24.4 25.5 (108) b.p. 24.1 25.1 (104) b.p.
SG&A (excl. D&A&I, LTI, share-based payments and the effect of the (352,346) (314,017) 12.2 (457,640) (410,205) 11.6
Karusel transformation)
% of revenue 13.5 14.2 (72) b.p. 17.6 18.6 (104) b.p.
Net impairment losses on financial assets (346) (154) 124.7 (346) (154) 124.7
% of revenue 0.01 0.01 1 b.p. 0.01 0.01 1 b.p.
Lease/sublease and other income (excl. the effect of the Karusel 23,025 23,877 (3.6) 20,710 21,193 (2.3)
transformation)
% of revenue 0.9 1.1 (20) b.p. 0.8 1.0 (17) b.p.
Adj. EBITDA 305,529 271,023 12.7 189,468 164,197 15.4
Adj. EBITDA margin, % 11.7 12.3 (56) b.p. 7.3 7.4 (17) b.p.
LTI, share-based payments and other one-off remuneration payment expenses and (2,517) (3,011) (16.4) (2,517) (3,011) (16.4)
SSC
% of revenue 0.1 0.1 (4) b.p. 0.1 0.1 (4) b.p.
Effect of the Karusel transformation (163) (162) 0.6 (163) (162) 0.6
% of revenue (0.01) (0.01) (0) b.p. (0.01) (0.01) (0) b.p.
EBITDA 302,849 267,850 13.1 186,788 161,024 16.0
EBITDA margin, % 11.6 12.1 (52) b.p. 7.2 7.3 (13) b.p.
D&A&I
Depreciation, amortisation and impairment costs under IFRS 16 decreased as a
percentage of revenue by 50 b.p. year-on-year to 5.9% (down 35 b.p.
year-on-year to 3.1% pre-IFRS 16) in Q4 2022, totalling RUB 41,737 million
(RUB 22,013 million pre-IFRS 16). This was mainly driven by higher impairment
accrual y-o-y in Q3 2022 on the back of macroeconomic situation and lower
additional impairment in Q4 2022. In 2022, depreciation, amortisation and
impairment costs under IFRS 16 a s a percentage of revenue decreased by 49
b.p. year-on-year to 6.3% (decreased by 5 b.p. year-on-year to 3.4% pre-IFRS
16), totalling RUB 164,731 million (RUB 89,156 million pre-IFRS 16).
Non-operating gains and losses
IFRS 16 Pre-IFRS 16
RUB mln Q4 2022 Q4 2021 change Q4 2022 Q4 2021 change
y-o-y ,% or multiple y-o-y, % or multiple
Operating profit 24,368 28,085 (13.2) 13,825 19,010 (27.3)
Net finance costs (16,798) (14,956) 12.3 (3,204) (4,118) (22.2)
Net FX result (3,457) (299) 12x (1,795) (41) 44x
Profit before tax 4,113 12,830 (67.9) 8,826 14,851 (40.6)
Income tax expense (2,030) (4,875) (58.4) (2,973) (5,281) (43.7)
Net profit 2,083 7,955 (73.8) 5,853 9,570 (38.8)
Net profit margin, % 0.3 1.3 (101) b.p. 0.8 1.6 (75) b.p.
IFRS 16 Pre-IFRS 16
RUB mln FY 2022 FY 2021 change FY 2022 FY 2021 change
y-o-y, % y-o-y, %
Operating profit 138,118 117,572 17.5 97,632 84,359 15.7
Net finance costs (68,417) (57,229) 19.5 (18,439) (16,569) 11.3
Net FX result (2,032) 399 n/a (2,699) 175 n/a
Profit before tax 67,669 60,742 11.4 76,494 67,965 12.5
Income tax expense (22,481) (18,004) 24.9 (24,246) (19,452) 24.6
Net profit 45,188 42,738 5.7 52,248 48,513 7.7
Net profit margin, % 1.7 1.9 (20) b.p. 2.0 2.2 (19) b.p.
Net finance costs under IFRS 16 in Q4 2022 increased by 12.3% year-on-year to
RUB 16,798 million (down 22.2% year-on-year to RUB 3,204 million pre-IFRS 16),
driven by increasing interest on lease liabilities partially compensated by
lower finance costs on the back of decreased total debt and higher interest
income on short-term financial investment. Under pre-IFRS 16, the decrease is
driven by lower finance costs on the back of decreased total debt and higher
interest income on short-term financial investment.
The negative net FX result totalled RUB 3,457 million (RUB 1,795 million under
pre-IFRS 16) in Q4 2022, compared with negative RUB 299 million (RUB 41
million under pre-IFRS 16) in Q4 2021, due to rouble volatility.
In FY 2022, the effective tax rate under IFRS 16 was 33.2% (31.7% under
pre-IFRS 16), up from 29.6% in 2021 (28.6% under pre-IFRS 16) due to one-off
effects.
Consolidated cash flow statement highlights
IFRS 16 Pre-IFRS 16
RUB mln Q4 2022 Q4 2021 change Q4 2022 Q4 2021 change
y-o-y, % y-o-y, %
Net cash from operating activities before changes in working capital 64,872 66,274 (2.1) 35,270 39,628 (11.0)
Change in working capital 7,702 31,415 (75.5) 7,235 31,582 (77.1)
Net interest and income tax paid (20,420) (24,444) (16.5) (6,850) (13,632) (49.8)
Net cash flows generated from operating activities 52,154 73,245 (28.8) 35,655 57,578 (38.1)
Adj. net cash used in investing activities(10) (25,935) (25,615) 1.2 (26,062) (25,797) 1.0
Short-term financial investments (30,000) (50,000) (40.0) (30,000) (50,000) (40.0)
Net cash generated from financing activities 7,200 15,540 (53.7) 23,824 31,389 (24.1)
Effect of exchange rate changes on cash and cash equivalents 137 (5) n/a 137 (5) n/a
Net increase in cash and cash equivalents 3,556 13,165 (73.0) 3,554 13,165 (73.0)
IFRS 16 Pre-IFRS 16
RUB mln FY 2022 FY 2021 change FY 2022 FY 2021 change
y-o-y, % y-o-y, %
Net cash from operating activities before changes in working capital 300,768 265,528 13.3 187,026 161,387 15.9
Change in working capital 5,924 32,415 (81.7) 4,088 32,244 (87.3)
Net interest and income tax paid (85,768) (70,481) 21.7 (35,887) (29,919) 19.9
Net cash flows generated from operating activities 220,924 227,462 (2.9) 155,227 163,712 (5.2)
Adj. net cash used in investing activities(10) (75,978) (89,435) (15.0) (76,295) (90,295) (15.5)
Short-term financial investments - (50,000) n/a - (50,000) n/a
Net cash used in financing activities (127,655) (81,890) 55.9 (61,641) (17,280) 4x
Effect of exchange rate changes on cash & cash equivalents (98) (83) 18.1 (98) (83) 18.1
Net increase in cash and cash equivalents 17,193 6,054 184.0 17,193 6,054 184.0
In Q4 2022, the Company's net cash from operating activities before changes in
working capital under IFRS 16 decreased by RUB 1,402 million (down RUB 4,358
million under pre-IFRS 16) and totalled RUB 64,872 million (RUB 35,270 million
under pre-IFRS 16). The lower positive change in working capital under IFRS 16
of RUB 7,702 million in Q4 2022 was driven by: a higher increase in
inventories on the back of business growth; a lower increase in accounts
payable due to earlier stockpiling and payments to ensure shelf availability
during the New Year season.
Working capital highlights
RUB mln 31 DECEMBER 2022 31 DECEMBER 2021 31 DECEMBER 2020
Inventories 208,661 166,840 144,393
Trade, other accounts receivable and prepayments 21,382 20,190 19,277
Trade accounts payable 238,641 212,949 170,909
Provisions and other liabilities 130,450 104,673 85,976
Short-term contract liabilities 3,767 2,392 2,198
Net interest and income tax paid under IFRS 16 in Q4 2022 decreased by 16.5%
year-on-year (down 49.8% year-on-year pre-IFRS 16) and totalled RUB 20,420
million (RUB 6,850 million pre-IFRS 16), driven by offset tax prepayments
available from the previous periods and lower withholding taxes.
As a result, net cash flow generated from operating activities under IFRS 16
totalled RUB 52,154 million in Q4 2022, down from RUB 73,245 million in Q4
2021 (RUB 35,655 million, down from RUB 57,578 million in Q4 2021 pre-IFRS
16).
In 2022, net cash flows generated from operating activities under IFRS 16
totalled RUB 220,924 million, down 2.9% from RUB 227,462 million in 2021 (and
totalled RUB 155,227 million, down 5.2% from RUB 163,712 million in 2021
pre-IFRS 16).
In Q4 2022, adj. net cash used in investing activities, which generally
consists of payments for property, plant and equipment, under IFRS 16
increased immaterially and totalled RUB 25,935 million (totalled RUB 26,062
million under pre-IFRS 16). For 2022, net cash used in investing activities
under IFRS 16 decreased to RUB 75,978 million (RUB 76,295 million under
pre-IFRS 16) from RUB 89,435 million (RUB 90,295 million under pre-IFRS 16) in
2021.
Net cash generated from financing activities under IFRS 16 totalled RUB 7,200
million (RUB 23,824 million pre-IFRS 16) in Q4 2022, compared with RUB 15,540
million (RUB 31,389 million pre-IFRS 16) in Q4 2021. In 2022, net cash used in
financing activities under IFRS 16 increased to RUB 127,655 million from RUB
81,890 million (and increased to RUB 61,641 million from RUB 17,280 million
pre-IFRS 16) in 2021.
Liquidity update
RUB mln 31 DECEMBER 2022 % of total 31 DECEMBER 2021 % of total 31 DECEMBER 2020 % of total
Total debt 234,532 294,338 261,947
Short-term debt 87,146 37.2 87,767 29.8 77,026 29.4
Long-term debt 147,386 62.8 206,571 70.2 184,921 70.6
Net debt (pre-IFRS 16) 191,277 268,276 241,939
Net debt/EBITDA (pre-IFRS 16) 1.02x 1.67x 1.67x
Lease liabilities (IFRS 16) 591,160 577,363 548,501
Net debt/EBITDA (IFRS 16) 2.58x 3.16x 3.24x
The Company's net debt/EBITDA ratio under IFRS 16 was 2.58x (1.02x pre-IFRS
16) as of 31 December 2022.
The Company's debt pre-IFRS 16 is 100% denominated in Russian roubles.
As of 31 December 2022, the Company had access to RUB 475,020 million in
available credit limits with major banks.
Dividends
In view of the current market conditions, ongoing regulatory constraints, and
consistent with last year's profit allocation, the Supervisory Board will
recommend to X5's General Meeting of shareholders not to distribute a dividend
for 2022. This recommendation is based on various factors, including the need
to strengthen the Company's focus on supporting customers and suppliers to
maintain a stable supply chain and keep store shelves sufficiently stocked.
The Supervisory Board believes that meeting these priorities will require
financial resources, and that all Company stakeholders will benefit in the
long term from X5 strengthening its reputation as a reliable partner for both
customers and suppliers. While the Company remains committed to its long-term
goal of returning company profits to shareholders, the Supervisory Board
believes it would be in the Company's best interest to temporarily deviate
from its dividend policy as long as current uncertainties and regulatory
conditions prevail.
Related party transactions
For a description of the related party transactions entered into by the
Company, please refer to note 8 of the consolidated financial statements.
Issuance of audited 2022 Annual Report
The Group expects to separately publish its full 2022 Annual Report prepared
in compliance with Dutch requirements at a later date, together with the audit
report issued by its Dutch external auditor, who was only engaged at the
beginning of 2023.
Notes
1. 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 12 full months. Their sales are included in the LFL
calculation starting from the day of the store's opening. We include all
stores that fit our LFL criteria in each reporting period.
2. The pre-IFRS 16 financial measures are calculated by adjusting the
applicable IFRS measures to include fixed lease expenses and fixed non-lease
components of lease contracts and to exclude any gain on derecognition of
right-of-use assets and lease liabilities, depreciation of right-of-use assets
and interest on lease liabilities and gain/loss from sale of asset under sale
and leaseback operations for the proportion of the rights retained recognised
under IFRS 16.
3. Adjusted EBITDA is EBITDA before costs related to the LTI programme,
share-based payments, other one-off remuneration payment expenses and the
impact of the Karusel transformation.
4. Please note that, in this and other tables and in the text of this
press release, immaterial deviations in the calculation of % changes,
subtotals and totals are due to rounding.
5. Net retail sales represent revenue from the operations of X5-managed
stores net of VAT. This number differs from revenue, which includes proceeds
from wholesale operations, direct franchisees (royalty payments) and other
revenue. Including Mnogo Lososya, Vprok.ru, Krasny Yar and Slata
6. Including Mnogo Lososya, Vprok.ru, Krasny Yar and Slata.
7. Including Vprok.ru dark stores, Mnogo Lososya dark kitchens, Karsny
Yar and Slata stores and joint dark stores.
8. Including Chizhik and Karusel.
9. Mainly consists of lease/sublease income, income from the sale of
recyclable materials and other one-off gains
10. Adjusted for cash used for short-term financial investments
Note to Editors
X5 Retail Group N.V. (LSE and MOEX: FIVE; Expert RA - ruAAA; ACRA - AAA(RU))
is a leading Russian food retailer. The Company operates proximity stores
under the Pyaterochka brand, Perekrestok supermarkets and Chizhik hard
discounters. X5 provides an omnichannel experience to its customers,
integrating retail stores and e-commerce through its businesses Vprok.ru,
5Post and Mnogo Lososya.
As of 31 December 2022, X5 had 21,323 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 19,164
Pyaterochka proximity stores, 971 Perekrestok supermarkets, 517 Chizhik hard
discounters and 595 Krasny Yar and Slata stores. The Company operates 53 DCs
and 4,386 Company-owned trucks across the Russian Federation.
X5 is one of the largest employers in Russia. The Company employs over 353
thousand people.
For the full year 2022, revenue totalled RUB 2,605,232 million (USD 38,005
million*), EBITDA pre-IFRS 16 reached RUB 186,788 million (USD 2,725
million*), and net profit pre-IFRS 16 for the period amounted to RUB 52,248
million (USD 762 million*).
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 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 Group N.V. speak
only as of the date of this announcement. Save as required by any applicable
laws or regulations, X5 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.
* FX rate: 68.5494 USD/RUB
For further details, please contact:
Polina Ugryumova
Head of Corporate Finance and IR
Tel.: +7 (495) 662-88-88 ext. 27-300
e-mail: Polina.Ugryumova@x5.ru (mailto:Polina.Ugryumova@x5.ru)
Maria Yazeva
Investor Relations Officer
Tel.: +7 (495) 662-88-88 ext. 13-147
e-mail: Maria.Yazeva@x5.ru (mailto:Maria.Yazeva@x5.ru)
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