REG - X5 Retail Group N.V - X5 reports 22.9% revenue growth in Q3 2023
25/10/2023 08:00
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RNS Number : 1584R X5 Retail Group N.V. 25 October 2023
X5 reports 22.9% revenue growth in Q3 2023, 7.8% adj. EBITDA margin pre-IFRS
16
+22.9 % y-o-y
Revenue growth in Q3 2023
driven by solid like-for-like (LFL) (1) sales and selling space expansion
+97.9 % y-o-y
Digital business (express delivery, Vprok.ru, 5Post and Mnogo Lososya) net
sales growth in Q3 2023
Digital business net sales amounted to RUB 29.2 billion, which comprised 3.7%
of consolidated Q3 2023 revenue.
24.8 % +47 b.p.
Gross margin under IFRS 16 in Q3 2023
(+48 b.p. to 24.4% pre-IFRS 16(2))
predominantly driven by higher commercial margin in Pyaterochka and lower
shrinkage in all formats
12.0 % -1 b.p.
Adjusted EBITDA(3) margin under IFRS 16 in Q3 2023
(+44 b.p. to 7.8% pre-IFRS 16)
3.2 % +110 b.p.
Net profit margin under IFRS 16 in Q3 2023
(+126 b.p. to 3.7% pre-IFRS 16)
2.53x
Net debt/EBITDA ratio under IFRS 16 as of 30 September 2023 (vs. 2.58x as of
31 December 2022)
(0.83х as of 30 September 2023 vs. 1.02х as of 31 December 2022 pre-IFRS 16
)
Amsterdam, 25 October 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
unaudited condensed consolidated interim financial information for the three
months (Q3) and nine months (9M) ended 30 September 2023, in accordance with
IAS 34 "Interim Financial Reporting" as adopted by the European Union.
Igor Shekhterman, X5 Chief Executive Officer, commented:
"During Q3 2023, X5 continued to implement its strategy of dynamic expansion
on the domestic food retail market while adapting its customer value
proposition to meet changing customer needs. We remain focused on developing
and growing our Pyaterochka proximity store and Chizhik hard discounter
networks, as well as continuing the transformation of our Perekrestok
supermarket format to increase efficiency and boost like-for-like sales.
In Q3 2023, X5 demonstrated strong revenue growth of 22.9%, driven by solid
like-for-like sales, new store openings and M&A activity, as well as the
active development of our hard discounter network. Against the backdrop of
this dynamic growth, X5 maintained a solid pre-IFRS 16 EBITDA margin of 7.7%.
In line with its domestic expansion strategy, X5 strengthened its presence in
the Far East after opening its first stores in the region in March 2023. In
September, X5 signed partnership agreements with four regions in the Far
Eastern Federal District. Under the new agreements, X5 will engage in joint
efforts to bring more local producers and SMEs to the consumer market,
facilitate investment projects in retail, support charitable programmes and
help to boost local business activity. X5 also announced further plans to
expand in the Far East, including the first store openings in the Amur Region
and the Jewish Autonomous Region in 2024.
Another landmark achievement during Q3 2023 was the opening of the 1,000(th)
Chizhik hard discounter store, a 350 square-metre retail outlet in the
southern city of Krasnodar. And in October, Chizhik launched its first stores
in Siberia, with plans to bring the total number of stores in the region to up
to 90 by the end of this year. In the three years since its launch, X5's hard
discounter format has seen increasingly strong demand thanks to its top-notch
product quality and affordable prices, as well as a unique private-label
assortment that is built around customer feedback. For the full year, X5 plans
to increase the rate of new store openings, well exceeding 1,000 Chizhik
stores and entering 11 new regions of Russia.
X5's online businesses continued to demonstrate strong results, as we work to
become the most effective business on the domestic e-grocery market. In Q3
2023, digital business net sales nearly doubled year-on-year, reaching RUB
29.2 billion and accounting for 3.7% of consolidated revenue.
During this quarter, X5's online delivery logistics service, 5Post, reached a
long-awaited milestone in the development of its infrastructure by entering
Siberia and surpassing 20,000 pickup points across all of Russia. Now, X5's
partners who use 5Post will be able to offer their customers a wider network
of pickup points, making online delivery even more accessible and closer to
home. 5Post's entry into Siberia has enabled X5 to approach 100% coverage of
its targeted geographical footprint and to meet the growing demand for
alternative delivery points in this region.
In parallel with organic growth, X5 continued to capitalise on attractive
M&A opportunities on the market. During this quarter, X5 acquired Victoria
Baltia, the operator of two retail store networks, two distribution centres
and a hypermarket in the Moscow and Kaliningrad Regions. The Kaliningrad
Region in particular is an exciting market for X5, yet it is limited in terms
of available locations for opening new stores. The acquisition of new stores
in this region will help X5 to consolidate its position and improve logistics
support for its operations on this high-potential growth market.
This quarter X5 reaffirmed its commitment to sustainable growth, with X5's
Supervisory Board approving an updated Sustainable Development strategy to
2025. The updated strategy sets ambitious new targets for reducing direct and
indirect greenhouse gas emissions and transitioning to renewable energy, among
others, and places a special emphasis on social support initiatives, including
expanding X5's food aid programmes and promoting inclusion through more
accessible services and stores. The strategy also underscores X5's focus on
the well-being of its employees with initiatives to promote employee
engagement, professional development and ensure workplace safety. We are
confident that this strategy reflects our ambitions towards sustainable
long-term value creation and becoming the number-one food retailer on the
market in terms of ESG recognition.
Despite a continuously challenging environment, X5 has remained steadfast in
its commitment to being a trusted and valued food retailer for the customers
and communities that we serve. I would like to express my gratitude to our
partners and investors for their continued partnership and trust, and to all
of X5's employees for their outstanding work and dedication to meeting and
surpassing customers' expectations. As X5 strives to become the
fastest-growing domestic food retailer by market share, I am confident that
our greatest asset - our people - will ensure our further success."
Profit and loss statement highlights(4)
RUB mln IFRS 16 Pre-IFRS 16
Q3 2023 Q3 2022 change, Q3 2023 Q3 2022 change,
y-o-y, % or multiple
y-o-y, % or multiple
Revenue 796,236 647,869 22.9 796,236 647,869 22.9
incl. net retail sales(5) 792,252 646,013 22.6 792,252 646,013 22.6
Pyaterochka (incl. express delivery) 639,516 538,842 18.7 639,516 538,842 18.7
Perekrestok (incl. express delivery) 97,335 89,185 9.1 97,335 89,185 9.1
Chizhik 31,435 9,742 3x 31,435 9,742 3x
Gross profit 197,243 157,418 25.3 194,652 155,268 25.4
Gross profit margin, % 24.8 24.3 47 b.p. 24.4 24.0 48 b.p.
Adj. EBITDA 95,178 77,496 22.8 62,464 47,986 30.2
Adj. EBITDA margin, % 12.0 12.0 (1) b.p. 7.8 7.4 44 b.p.
EBITDA 94,040 77,036 22.1 61,326 47,526 29.0
EBITDA margin, % 11.8 11.9 (8) b.p. 7.7 7.3 37 b.p.
Operating profit 51,954 35,982 44.4 40,330 25,182 60.2
Operating profit margin, % 6.5 5.6 97 b.p. 5.1 3.9 118 b.p.
Net profit 25,737 13,844 85.9 29,589 15,931 85.7
Net profit margin, % 3.2 2.1 110 b.p. 3.7 2.5 126 b.p.
RUB mln IFRS 16 Pre-IFRS 16
9M 2023 9M 2022 change, 9M 2023 9M 2022 change,
y-o-y, % or multiple
y-o-y, % or multiple
Revenue 2,264,643 1,900,049 19.2 2,264,643 1,900,049 19.2
incl. net retail sales(6) 2,254,342 1,893,951 19.0 2,254,342 1,893,951 19.0
Pyaterochka (incl. express delivery) 1,805,414 1,562,353 15.6 1,805,414 1,562,353 15.6
Perekrestok (incl. express delivery) 299,178 281,095 6.4 299,178 281,095 6.4
Chizhik 76,765 20,659 4x 76,765 20,659 4x
Gross profit 552,868 474,864 16.4 545,436 468,697 16.4
Gross profit margin, % 24.4 25.0 (58) b.p. 24.1 24.7 (58) b.p.
Adj. EBITDA 258,187 238,688 8.2 163,212 152,894 6.7
Adj. EBITDA margin, % 11.4 12.6 (116) b.p. 7.2 8.0 (84) b.p.
EBITDA 256,677 236,744 8.4 161,702 150,950 7.1
EBITDA margin, % 11.3 12.5 (113) b.p. 7.1 7.9 (80) b.p.
Operating profit 135,170 113,750 18.8 100,831 83,807 20.3
Operating profit margin, % 6.0 6.0 (2) b.p. 4.5 4.4 4 b.p.
Net profit 61,740 43,105 43.2 71,250 46,395 53.6
Net profit margin, % 2.7 2.3 46 b.p. 3.1 2.4 70 b.p.
Revenue
Revenue growth reached 22.9% year-on-year in Q3 2023. Net retail sales
increased by 22.6%, driven by a combination of 12.6% selling space growth and
10.2% LFL sales growth, while X5's digital business sales grew by 97.9% y-o-y.
Selling space by format, square metres (sqm)
AS AT 30-SEP-23 AS AT 31-DEC-22 CHANGE AS AT 30-SEP-22 CHANGE Y-O-Y,
VS 31-DEC-22, % OR MULTIPLE
% OR MULTIPLE
Pyaterochka 8,139,969 7,497,056 8.6 7,385,832 10.2
Perekrestok 1,066,459 1,085,496 (1.8) 1,093,005 (2.4)
Chizhik 316,888 152,370 108.0 93,018 3x
Joint dark stores 10,258 8,087 26.8 5,358 91.5
X5 Group(7) 9,859,610 9,107,479 8.3 8,759,191 12.6
Q3 and 9M 2023 LFL store performance by format, % change y-o-y
In Q3 2023, LFL sales increased by 10.2% year-on-year, supported by
Pyaterochka's and Perekrestok's solid LFL results of 10.4% and 9.5%,
respectively.
LFL sales structure was more balanced in terms of LFL traffic and LFL basket
contribution compared to Q2 2023.
Q3 2023 9M 2023
SALES TRAFFIC BASKET SALES TRAFFIC BASKET
Pyaterochka 10.4 6.1 4.1 8.7 5.8 2.7
Perekrestok 9.5 2.2 7.2 6.0 1.9 4.0
X5 Group(8) 10.2 5.7 4.3 8.2 5.4 2.7
For more details on net retail sales performance, please refer to X5's Q3 2023
Trading Update
(https://www.x5.ru/wp-content/uploads/2023/10/q3_2023_trading_update_eng.pdf)
.
Gross profit margin
Gross profit margin under IFRS 16 increased by 47 b.p. year-on-year to 24.8%
(up 48 b.p. year-on-year to 24.4% pre-IFRS 16) in Q3 2023, mainly due to a
higher commercial margin driven by the low base effect of Q3 2022 and the
optimisation of assortment in Pyaterochka, as well as lower shrinkage in all
formats.
Gross profit margin for 9M 2023 decreased by 58 b.p. under IFRS 16 (down 58
b.p. pre-IFRS 16) due to the increasing share of the hard discounter format in
revenue, as well as the transformation of Pyaterochka's CVP partially offset
by the optimisation of assortment.
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 Q3 2023 Q3 2022 change, Q3 2023 Q3 2022 change,
y-o-y, %
y-o-y, %
Staff costs (65,045) (51,595) 26.1 (65,045) (51,595) 26.1
% of revenue 8.2 8.0 21 b.p. 8.2 8.0 21 b.p.
incl. LTI and share-based payments (1,160) (727) 59.6 (1,160) (727) 59.6
staff costs excl. LTI and share- 8.0 7.9 17 b.p. 8.0 7.9 17 b.p.
based payments as % of revenue
Lease expenses (7,185) (5,412) 32.8 (34,384) (30,022) 14.5
% of revenue 0.9 0.8 7 b.p. 4.3 4.6 (32) b.p.
Utilities (14,908) (12,096) 23.2 (14,908) (12,096) 23.2
% of revenue 1.9 1.9 1 b.p. 1.9 1.9 1 b.p.
Other store costs (6,676) (5,827) 14.6 (6,894) (6,056) 13.8
% of revenue 0.8 0.9 (6) b.p. 0.9 0.9 (7) b.p.
Third-party services (5,794) (4,546) 27.5 (5,670) (4,448) 27.5
% of revenue 0.7 0.7 3 b.p. 0.7 0.7 3 b.p.
Other expenses (9,473) (6,198) 52.8 (12,149) (7,780) 56.1
% of revenue 1.2 1.0 23 b.p. 1.5 1.2 32 b.p.
SG&A (excl. D&A&I and the impact of the Karusel transformation) (109,081) (85,674) 27.3 (139,050) (111,997) 24.2
% of revenue 13.7 13.2 48 b.p. 17.5 17.3 18 b.p.
SG&A (excl. D&A&I, LTI, share-based payments and the impact of the (107,921) (84,947) 27.0 (137,890) (111,270) 23.9
Karusel transformation)
% of revenue 13.6 13.1 44 b.p. 17.3 17.2 14 b.p.
IFRS 16 Pre-IFRS 16
RUB mln 9M 2023 9M 2022 change, 9M 2023 9M 2022 change,
y-o-y, %
y-o-y, %
Staff costs (188,915) (151,883) 24.4 (188,915) (151,883) 24.4
% of revenue 8.3 8.0 35 b.p. 8.3 8.0 35 b.p.
incl. LTI and share-based payments (3,321) (1,788) 85.7 (3,321) (1,788) 85.7
staff costs excl. LTI and share- 8.2 7.9 30 b.p. 8.2 7.9 30 b.p.
based payments as % of revenue
Lease expenses (19,084) (14,200) 34.4 (98,653) (87,244) 13.1
% of revenue 0.8 0.7 10 b.p. 4.4 4.6 (24) b.p.
Utilities (46,202) (37,085) 24.6 (46,202) (37,085) 24.6
% of revenue 2.0 2.0 9 b.p. 2.0 2.0 9 b.p.
Other store costs (19,269) (17,231) 11.8 (19,912) (17,896) 11.3
% of revenue 0.9 0.9 (6) b.p. 0.9 0.9 (6) b.p.
Third-party services (15,243) (12,485) 22.1 (14,914) (12,196) 22.3
% of revenue 0.7 0.7 2 b.p. 0.7 0.6 2 b.p.
Other expenses (26,112) (21,899) 19.2 (33,051) (26,457) 24.9
% of revenue 1.2 1.2 0 b.p. 1.5 1.4 7 b.p.
SG&A (excl. D&A&I and the impact of the Karusel transformation) (314,825) (254,783) 23.6 (401,647) (332,761) 20.7
% of revenue 13.9 13.4 49 b.p. 17.7 17.5 22 b.p.
SG&A (excl. D&A&I, LTI, share-based payments and the impact of the (311,504) (252,995) 23.1 (398,326) (330,973) 20.3
Karusel transformation)
% of revenue 13.8 13.3 44 b.p. 17.6 17.4 17 b.p.
In Q3 2023, 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 increased by 44 b.p. to 13.6% (up 14 b.p. to 17.3%
pre-IFRS 16), mainly driven by higher staff costs, other expenses, and lease
expenses (only under IFRS 16).
Staff costs (excluding LTI and share-based payments) as a percentage of
revenue increased by 17 b.p. year-on-year in Q3 2023 to 8.0%, mainly due to a
negative operating leverage effect as well as the hiring of additional store
personnel at Perekrestok on the back of the new CVP.
LTI and share-based payment expenses amounted to RUB 1,160 million in Q3 2023,
up by 59.6% from RUB 727 million in Q3 2022, driven by the introduction of the
LTI programme for new businesses and an increase in accruals for the 2021-2023
LTI programme on the back of updated KPIs and a reassessment of the
probability of achieving these KPIs.
Lease expenses under IFRS 16 as a percentage of revenue in Q3 2023 increased
by 7 b.p. year-on-year to 0.9%, mainly due to an increase in the number of
reverse franchising stores and a higher number of revenue-linked leases. The
32 b.p. decrease in pre-IFRS 16 lease expenses to 4.3% was caused by a
positive operating leverage effect for fixed lease rates partially compensated
by a higher number of revenue-linked leases.
Utilities costs as a percentage of revenue in Q3 remained flat at 1.9%.
Other store costs under IFRS 16 as a percentage of revenue in Q3 2023
decreased by 6 b.p. year-on-year (falling by 7 b.p. pre-IFRS 16), mainly due
to the optimisation of store security operations.
Third-party service expenses under IFRS 16 as a percentage of revenue in Q3
2023 increased by 3 b.p. year-on-year to 0.7% (up 3 b.p. to 0.7% pre-IFRS 16),
mainly due to the normalisation of marketing expenses vs Q3 2022.
Other expenses under IFRS 16 as a percentage of revenue in Q3 2023 increased
by 23 b.p. year-on-year to 1.2% (up 32 b.p. to 1.5% pre-IFRS 16), due to a
growing share of courier service costs and aggregator commissions for express
delivery. Under pre-IFRS 16, the effect also includes higher reverse
franchising agency fees.
In 9M 2023, 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 increased by 44 b.p. to 13.8% (up 17 b.p. to 17.6%
pre-IFRS 16), mainly driven by higher staff costs, utilities costs, and lease
expenses (only under IFRS 16)
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 0.7%, representing a decrease of 6
b.p. year-on-year in Q3 2023 (an increase of 8 b.p. to 0.7% pre-IFRS 16). This
was driven by a lower effect from the termination of lease agreements (only
under IFRS 16), partially compensated by higher income from sales of
recyclables.
EBITDA and EBITDA margin
IFRS 16 Pre-IFRS 16
RUB mln Q3 2023 Q3 2022 change, Q3 2023 Q3 2022 change,
y-o-y, %
y-o-y, %
Gross profit 197,243 157,418 25.3 194,652 155,268 25.4
Gross profit margin, % 24.8 24.3 47 b.p. 24.4 24.0 48 b.p.
SG&A (excl. D&A&I, LTI, share-based payments and the effect of the (107,921) (84,947) 27.0 (137,890) (111,270) 23.9
Karusel transformation)
% of revenue 13.6 13.1 44 b.p. 17.3 17.2 14 b.p.
Net impairment gain on financial assets (54) (151) (64.2) (54) (151) (64.2)
% of revenue (0.01) (0.02) 2 b.p. (0.01) (0.02) 2 b.p.
Lease/sublease and other income (excl. the effect of the Karusel 5,910 5,176 14.2 5,756 4,139 39.1
transformation)
% of revenue 0.7 0.8 (6) b.p. 0.7 0.6 8 b.p.
Adj. EBITDA 95,178 77,496 22.8 62,464 47,986 30.2
Adj. EBITDA margin, % 12.0 12.0 (1) b.p. 7.8 7.4 44 b.p.
LTI, share-based payments and other one-off remuneration payment expenses and (1,160) (727) 59.6 (1,160) (727) 59.6
SSC
% of revenue 0.1 0.1 3 b.p. 0.1 0.1 3 b.p.
Effect of the Karusel transformation 22 267 (91.8) 22 267 (91.8)
% of revenue 0.00 0.04 (4) b.p. 0.00 0.04 (4) b.p.
EBITDA 94,040 77,036 22.1 61,326 47,526 29.0
EBITDA margin, % 11.8 11.9 (8) b.p. 7.7 7.3 37 b.p.
IFRS 16 Pre-IFRS 16
RUB mln 9M 2023 9M 2022 change, 9M 2023 9M 2022 change,
y-o-y, %
y-o-y, %
Gross profit 552,868 474,864 16.4 545,436 468,697 16.4
Gross profit margin, % 24.4 25.0 (58) b.p. 24.1 24.7 (58) b.p.
SG&A (excl. D&A&I, LTI, share-based payments and the effect of the (311,504) (252,995) 23.1 (398,326) (330,973) 20.3
Karusel transformation)
% of revenue 13.8 13.3 44 b.p. 17.6 17.4 17 b.p.
Net impairment losses on financial assets (108) (298) (63.8) (108) (298) (63.8)
% of revenue 0.00 0.02 (1) b.p. 0.00 0.02 (1) b.p.
Lease/sublease and other income (excl. the effect of the Karusel 16,931 17,117 (1.1) 16,210 15,468 4.8
transformation)
% of revenue 0.7 0.9 (15) b.p. 0.7 0.8 (10) b.p.
Adj. EBITDA 258,187 238,688 8.2 163,212 152,894 6.7
Adj. EBITDA margin, % 11.4 12.6 (116) b.p. 7.2 8.0 (84) b.p.
LTI, share-based payments and other one-off remuneration payment expenses and (3,321) (1,788) 85.7 (3,321) (1,788) 85.7
SSC
% of revenue 0.1 0.1 5 b.p. 0.1 0.1 5 b.p.
Effect of the Karusel transformation 1,811 (156) n/a 1,811 (156) n/a
% of revenue 0.08 (0.01) 9 b.p. 0.08 (0.01) 9 b.p.
EBITDA 256,677 236,744 8.4 161,702 150,950 7.1
EBITDA margin, % 11.3 12.5 (113) b.p. 7.1 7.9 (80) b.p.
D&A&I
Depreciation, amortisation and impairment costs under IFRS 16 decreased as a
percentage of revenue by 105 b.p. year-on-year to 5.3% (down 81 b.p.
year-on-year to 2.6% pre-IFRS 16) in Q3 2023, totalling RUB 42,086 million
(RUB 20,996 million pre-IFRS 16). This was mainly attributable to the high
base effect of Q3 2022 due to one-off impairment and the fact that revenue
growth outpaced growth in the gross book value of assets. In 9M 2023,
depreciation, amortisation and impairment costs under IFRS 16 decreased by 111
b.p. year-on-year to 5.4% (down 85 b.p. year-on-year to 2.7% pre-IFRS 16),
totalling RUB 121,507 million (RUB 60,871 million pre-IFRS 16).
Non-operating gains and losses
IFRS 16 Pre-IFRS 16
RUB mln Q3 2023 Q3 2022 change, Q3 2023 Q3 2022 change,
y-o-y, % or multiple
y-o-y, % or multiple
Operating profit 51,954 35,982 44.4 40,330 25,182 60.2
Net finance costs (17,604) (16,300) 8.0 (2,026) (3,453) (41.3)
Net FX result (1,677) (1,512) 10.9 (817) (949) (13.9)
Profit before tax 32,673 18,170 79.8 37,487 20,780 80.4
Income tax expense (6,936) (4,326) 60.3 (7,898) (4,849) 62.9
Net profit 25,737 13,844 85.9 29,589 15,931 85.7
Net profit margin, % 3.2 2.1 110 b.p. 3.7 2.5 126 b.p.
IFRS 16 Pre-IFRS 16
RUB mln 9M 2023 9M 2022 change, 9M 2023 9M 2022 change,
y-o-y, % or multiple
y-o-y, % or multiple
Operating profit 135,170 113,750 18.8 100,831 83,807 20.3
Net finance costs (50,619) (51,619) (1.9) (6,930) (15,235) (54.5)
Net FX result (5,175) 1,425 n/a (2,639) (904) 192
Profit before tax 79,376 63,556 24.9 91,262 67,668 34.9
Income tax expense (17,636) (20,451) (13.8) (20,012) (21,273) (5.9)
Net profit 61,740 43,105 43.2 71,250 46,395 53.6
Net profit margin, % 2.7 2.3 46 b.p. 3.1 2.4 70 b.p.
Net finance costs under IFRS 16 in Q3 2023 increased by 8.0% year-on-year to
RUB 17,604 million (down 41.3% year-on-year to RUB 2,026 million pre-IFRS 16),
driven by increasing interest on lease liabilities under IFRS 16. Other
factors include higher interest income on short-term financial investments,
partially compensated by higher interest costs due to increased interest rates
in the Russian capital markets.
The negative net FX result totalled RUB 1,677 million (RUB 817 million under
pre-IFRS 16) in Q3 2023, compared with RUB 1,512 million (RUB 949 million
under pre-IFRS 16) in Q3 2022, due to the depreciation of the rouble.
In Q3 2023, income tax expense under IFRS 16 increased by 60.3% year-on-year
(up 62.9% year-on-year pre-IFRS 16) due to the increased profit before tax.
In 9M 2023, the effective tax rate under IFRS 16 was 22.2% (21.9% under
pre-IFRS 16), down from 32.2% in 9M 2022 (31.4% under pre-IFRS 16).
Consolidated cash flow statement highlights
IFRS 16 Pre-IFRS 16
RUB mln Q3 2023 Q3 2022 change, Q3 2023 Q3 2022 change,
y-o-y, % or multiple
y-o-y, % or multiple
Net cash from operating activities before changes in working capital 93,514 75,322 24.2 60,956 46,847 30.1
Change in working capital 20,930 16,715 25.2 20,424 14,849 37.5
Net interest and income tax paid (27,185) (25,403) 7.0 (11,610) (12,616) (8.0)
Net cash flows generated from operating activities 87,259 66,634 31.0 69,770 49,082 42.2
Net cash (used in)/generated from investing activities (32,626) (13,018) 150.6 (32,824) (12,966) 153.2
Net cash used in financing activities (27,687) (52,512) (47.3) (10,000) (35,010) (71.4)
Effect of exchange rate changes on cash and cash equivalents 57 79 (27.8) 57 79 (27.8)
Net increase in cash and cash equivalents 27,003 1,183 23x 27,003 1,183 23x
IFRS 16 Pre-IFRS 16
RUB mln 9M 2023 9M 2022 change, 9M 2023 9M 2022 change,
y-o-y, % or multiple
y-o-y, % or multiple
Net cash from operating activities before changes in working capital 253,562 235,896 7.5 159,309 151,756 5.0
Change in working capital 6,915 (1,778) n/a 6,590 (3,147) n/a
Adj. net interest and income tax paid(10) (70,529) (65,348) 7.9 (26,898) (29,039) (7.4)
Interest received on short-term financial investments 2,232 - n/a 2,232 - n/a
Net interest and income tax paid (68,297) (65,348) 4.5 (24,666) (29,039) (15.1)
Adj. net cash flows generated from operating activities(10) 189,948 168,770 12.5 139,001 119,570 16.3
Net cash flows generated from operating activities 192,180 168,770 13.9 141,233 119,570 18.1
Adj. net cash used in investing activities(11) (80,056) (50,043) 60.0 (80,531) (50,233) 60.3
(Payment for)/Repayment of short-term financial investments (32,232) 30,000 n/a (32,232) 30,000 n/a
Net cash used in investing activities (112,288) (20,043) 460.2 (112,763) (20,233) 457.3
Net cash used in financing activities (69,041) (134,855) (48.8) (17,619) (85,465) (79.4)
Effect of exchange rate changes on cash and cash equivalents 313 (235) n/a 313 (235) n/a
Net increase in cash and cash equivalents 11,164 13,637 (18.1) 11,164 13,637 (18.1)
In Q3 2023, the Company's net cash from operating activities before changes in
working capital under IFRS 16 increased by RUB 18,192 million (up RUB 14,109
million under pre-IFRS 16) and totalled RUB 93,514 million (RUB 60,956 million
under pre-IFRS 16). The higher positive change in working capital under IFRS
16 of RUB 20,930 million in Q3 2023 vs. RUB 16,715 million in Q3 2022 was
attributable to a higher increase in trade account payables due to the effect
of a non-working day at the end of September and a lower increase in accounts
receivable, driven by a low base of back bonuses from suppliers in June 2022
and their recovery by September 2022 on the back of renewed marketing and
promotion activities.
Working capital highlights
RUB mln 30-Sep-23 31-Dec-22 30-Sep-22
Inventories 213,704 208,661 172,706
Trade, other accounts receivable and prepayments 24,287 21,382 16,846
Trade accounts payable 247,788 238,641 196,068
Provisions and other liabilities 135,537 130,450 106,931
Short-term contract liabilities 1,547 3,767 5,335
Net interest and income tax paid under IFRS 16 in Q3 2023 increased by 7.0%
year-on-year (down 8.0% year-on-year pre-IFRS 16) and totalled RUB 27,185
million (RUB 11,610 million pre-IFRS 16). This was due to increased interest
on lease liabilities driven by business growth.
As a result, net cash flow generated from operating activities under IFRS 16
totalled RUB 87,259 million in Q3 2023, up from RUB 66,634 million in Q3 2022
(RUB 69,770 million, up from RUB 49,082 million in Q3 2022 pre-IFRS 16).
In 9M 2023, net cash flows generated from operating activities under IFRS 16
totalled RUB 192,180 million, up 13.9% from RUB 168,770 million in 9M 2022
(totalling RUB 141,233 million, up 18.1% from RUB 119,570 million in 9M 2022
pre-IFRS 16).
In Q3 2023, net cash used in investing activities, which predominantly
consists of payments for property, plant and equipment, increased to RUB
32,626 million under IFRS 16 (RUB 32,824 million pre-IFRS 16) due to a higher
number of store openings and the acquisition of Victoria Baltia in August
2023. For 9M 2023, adjusted net cash used in investing activities under IFRS
16 increased to RUB 80,056 million (RUB 80,531 million under pre-IFRS 16) from
RUB 50,043 million (RUB 50,233 million under pre-IFRS 16) in 9M 2022.
Net cash used in financing activities under IFRS 16 totalled RUB 27,687
million (RUB 10,000 million pre-IFRS 16) in Q3 2023, compared with net cash
used in financing activities of RUB 52,512 million (RUB 35,010 million
pre-IFRS 16) in Q3 2022. In 9M 2023, net cash used in financing activities
under IFRS 16 decreased to RUB 69,041 million from RUB 134,855 million
(decreasing to RUB 17,619 million from RUB 85,465 million pre-IFRS 16) in 9M
2022.
Liquidity update
RUB mln 30-Sep-23 % of total 31-Dec-22 % of total 30-Sep-22 % of total
Total debt 219,003 234,532 208,945
Short-term debt 119,987 54.8 87,146 37.2 70,497 33.7
Long-term debt 99,016 45.2 147,386 62.8 138,448 66.3
Net debt (pre-IFRS 16) 164,584 191,277 169,246
Net debt/EBITDA (pre-IFRS 16) 0.83x 1.02x 0.89x
Lease liabilities (IFRS 16) 652,122 591,160 564,067
Net debt/EBITDA (IFRS 16) 2.53x 2.58x 2.41x
The Company's net debt/EBITDA ratio under IFRS 16 was 2.53x (0.83x pre-IFRS
16) as of 30 September 2023.
The Company's debt pre-IFRS 16 is 100% denominated in Russian roubles.
As of 30 September 2023, the Company had access to RUB 494,816 million in
available lines of credit with major banks.
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 LFL
calculations starting from the day of the store's opening. We include all
stores that fit our LFL criteria in each reporting period. Express delivery
sales from stores and dark stores that have operated for less than 12 full
months are also included in LFL calculations.
2. 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 asset sale and leaseback
operations for the proportion of rights retained as 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. 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.
7. Including Vprok.ru dark stores, Mnogo Lososya dark kitchens, and
Krasny Yar and Slata stores.
8. Excluding Krasny Yar and Slata, Vprok.ru and Mnogo Lososya; including
Chizhik.
9. Mainly consists of lease/sublease income, income from the sale of
recyclable materials and other one-off gains.
10. Adjusted for interest received on short-term financial investments.
11. 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 30 September 2023, X5 had 23,466 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, as well as a growing presence in the
Russian Far East. Its store base includes 20,761 Pyaterochka proximity stores,
955 Perekrestok supermarkets, 1,071 Chizhik hard discounters and 601 Krasny
Yar and Slata stores. The Company operates 61 DCs and 4,745 Company-owned
trucks across the Russian Federation.
X5 is one of the largest employers in Russia. The Company employs over 364
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*). In 9M 2023, revenue totalled RUB 2,264,643 million
(USD 27,386 million**), adjusted EBITDA pre-IFRS 16 reached RUB 163,212
million (USD 1,974 million**), and net profit pre-IFRS 16 amounted to RUB
71,250 million (USD 862 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
** FX rate: 82.6934 USD/RUB
For further details, please contact:
Polina Ugryumova
Head of Corporate Finance and IR
Tel.: +7 (495) 662-88-88 ext. 13-312
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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