REG - X5 Retail Group N.V - X5 NET RETAIL SALES GROW 12.8% IN Q3 2019
RNS Number : 1952QX5 Retail Group N.V.17 October 2019X5 RETAIL GROUP REPORTS 12.8% NET RETAIL SALES GROWTH IN Q3 2019
ü Total net retail sales increased by 12.8% y-o-y (13.9% y-o-y, incl. VAT) in roubles (RUB), driven by:
§ 3.9% increase in like-for-like (LFL)(1) sales; and
§ 8.9% sales growth contribution from a 13.9% rise in selling space.
ü Net retail sales for X5's core formats Pyaterochka and Perekrestok increased by 13.4% and 18.0% y-o-y, respectively.
ü X5's LFL sales growth remained strong at 3.9% y-o-y in Q3 2019, with an increased contribution from LFL basket.
ü Karusel experienced a 2.6% decline in net retail sales following a 4.1% reduction in selling space due to the transfer of three stores to Perekrestok and the closure of one store as part of the Karusel transformation initiative.
ü X5 added 492 net new stores in Q3 2019.
Amsterdam, 17 October 2019 - X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer (LSE and MOEX ticker: "FIVE"), announces today the Company's preliminary consolidated net retail sales and operational results for the third quarter (Q3) and nine months (9M) ended 30 September 2019(2).
Net Retail Sales(3) Performance
Net retail sales by format (4)
RUB mln
Q3 2019
Q3 2018
change
y-o-y, %
9M 2019
9M 2018
change
y-o-y, %
Pyaterochka
337,778
297,946
13.4
1,002,447
871,259
15.1
Perekrestok
62,818
53,225
18.0
194,388
163,633
18.8
Karusel
20,116
20,647
(2.6)
63,101
64,723
(2.5)
Х5 Retail Group
420,712
372,934
12.8
1,260,415
1,104,132
14.2
Q2 & 9M 2019 LFL store performance by format, % change y-o-y
Q3 2019
9M 2019
Sales
Traffic
Basket
Sales
Traffic
Basket
Pyaterochka
3.4
0.3
3.1
4.3
1.9
2.4
Perekrestok
7.6
3.0
4.4
8.0
5.7
2.1
Karusel
1.2
(4.4)
5.9
1.2
(3.4)
4.8
X5 Retail Group
3.9
0.5
3.4
4.7
2.1
2.5
(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) Numbers in this press release are preliminary and have not been reviewed or audited by the Company's auditor.
(3) Net retail sales represent revenue from operations of X5-managed stores net of VAT. This number differs from revenue, which also includes proceeds from direct franchisees (royalty payments) and other revenue, which will be reported as part of X5's Q2 and 9M 2019 financial results.
(4) In the tables and text of this press release, immaterial deviations in calculation of % change, subtotals and totals are due to rounding.
Q3 2019 monthly net RUB retail sales by format, % change y-o-y
July 2019
August 2019
September 2019
Pyaterochka
14.2
13.4
12.4
Perekrestok
19.6
18.3
16.2
Karusel
(5.3)
(0.2)
(2.1)
X5 Retail Group
13.5
13.0
11.9
Average Ticket and Number of Customer Visits
Q3 & 9M 2019 average ticket and customer visits by format
Q3 2019
Q3 2018
change
y-o-y, %
9M 2019
9M 2018
change
y-o-y, %
Average Ticket, RUB
Pyaterochka
340.9
333.2
2.3
350.7
345.3
1.5
Perekrestok
500.9
481.2
4.1
521.9
511.6
2.0
Karusel
801.1
745.6
7.4
809.1
763.5
6.0
X5 Retail Group
368.6
359.5
2.5
380.7
374.9
1.5
# of Customers, mln
Pyaterochka
1,142.1
1,021.4
11.8
3,293.0
2,881.2
14.3
Perekrestok
144.2
125.9
14.5
428.0
364.6
17.4
Karusel
28.9
31.5
(8.3)
89.8
96.8
(7.3)
X5 Retail Group
1,315.2
1,184.3
11.1
3,812.9
3,363.0
13.4
Q3 2019 average monthly ticket and customer visits by format, % change y-o-y
July 2019
August 2019
September 2019
Average Ticket
Pyaterochka
2.9
3.0
0.9
Perekrestok
4.4
5.5
2.5
Karusel
6.0
9.2
7.1
X5 Retail Group
3.0
3.4
1.2
# of Customer Visits
Pyaterochka
12.0
10.9
12.5
Perekrestok
15.7
13.6
14.4
Karusel
(9.5)
(7.5)
(7.7)
X5 Retail Group
11.2
10.2
11.7
Expansion Dynamics
Selling space and # of stores by format
As at
30-Sep-19
As at
31-Dec-18
change vs
31-Dec-18, %
As at
30-Sep-18
change vs
30-Sep-18, %
Selling Space, square meters (sq. m.)
Pyaterochka
5,788,675
5,291,421
9.4
5,035,160
15.0
Perekrestok
853,514
781,538
9.2
728,467
17.2
Karusel
366,369
382,024
(4.1)
382,120
(4.1)
X5 Retail Group
7,008,558
6,463,735
8.4
6,155,080
13.9
# of Stores
Pyaterochka
14,850
13,522
9.8
12,822
15.8
Perekrestok
811
760
6.7
712
13.9
Karusel
91
94
(3.2)
92
(1.1)
X5 Retail Group
15,752
14,431
9.2
13,685
15.1
Selling space and # of stores added by format
Net Added
Q3 2019
Net Added
Q3 2018
change,
y-o-y, %
Net Added
9M 2019
Net Added
9M 2018
change,
y-o-y, %
Selling Space, square meters (sq. m.)
Pyaterochka
181,447
194,012
(6.5)
497,253
608,353
(18.3)
Perekrestok
38,706
23,151
67.2
71,976
91,225
(21.1)
Karusel
2,341
(4,151)
n/a
(15,655)
(3,151)
396.9
X5 Retail Group
222,493
208,910
6.5
544,823
675,339
(19.3)
Net # of Stores
Pyaterochka
465
508
(8.5)
1,328
1,597
(16.8)
Perekrestok
26
21
23.8
51
74
(31.1)
Karusel
1
(1)
n/a
(3)
(1)
200.0
X5 Retail Group
492
507
(3.0)
1,321
1,564
(15.5)
Perekrestok.ru Performance
Q3 2019
Q3 2018
change
y-o-y, %
9M 2019
9M 2018
change
y-o-y, %
Net sales, RUB mln
922
276
234.3
2,680
654
309.9
Number of orders
305,646
92,970
228.8
862,049
208,851
312.8
Average ticket, RUB
3,440
3,362
2.3
3,543
3,550
(0.2)
Key Drivers for Q3 2019 Results
External environment
§ Consumer sentiment continued to slowly improve and stood at -13% in Q3 2019, up from -15% in Q2 2019.
§ Growth in consumer demand for food products slowed to 0.9% y-o-y in July-August 2019 in real terms, compared with 1.7% y-o-y in Q2 2019.
§ Food inflation began to decelerate in Q3 2019, declining to 5.0% y-o-y from 5.9% y-o-y in Q2 2019. The slowdown in food inflation is attributed to the early and plentiful harvest of 2019.
§ Real wages growth in Q3 2019 remained strong, rising 3.0% y-o-y in 3Q 2019 from 2.6% y-o-y in Q2 2019. The unemployment rate fell to a new record low of 4.3% in August.
Sales
§ LFL traffic was positive in X5's core formats Pyaterochka and Perekrestok in Q3 2019, but LFL basket was the main LFL revenue driver in 3Q 2019. Cold weather in Q3 led to consumers shopping less frequently but buying more with each purchase.
§ Pyaterochka's net retail sales growth slowed sequentially in Q3 2019 to 13.4% y-o-y, reflecting the slower pace of openings. LFL basket accelerated to 3.1% in Q3 2019, while LFL traffic was 0.3% y-o-y in Q3 2019. This mainly reflects more aggressive promo activity from other proximity and discounter peers.
§ Perekrestok's net retail sales growth reached 18.0% in Q3 2019 as the format is dynamically expanding its network. In the supermarket segment, 3.0% growth in LFL traffic and a 4.4% y-o-y increase in LFL basket reflect the positive response from consumers to the format's CVP.
§ Karusel saw a small 2.6% y-o-y decline in net retail sales, mainly due to the transfer of three stores to Perekrestok management during H1 2019 and the closure of one, while the format's LFL revenue contribution was positive, at 1.2% y-o-y.
Loyalty programmes
§ X5 continued to develop its loyalty card programmes. In total, X5's three retail formats had 38.7 million registered loyalty card users as of 30 September 2019, with penetration in traffic in September reaching 53% at Pyaterochka, 55% at Perekrestok and 78% at Karusel.
Expansion and retail portfolio improvement
§ In line with the strategy of balanced growth, the Company opened less stores over the third quarter of 2019 compared with Q3 2018. X5's full-year target to open 2,000 new stores (gross) between its two core formats remains unchanged.
§ In Q3 2019, as part of the Company's ongoing rationalisation programme, X5 closed 50 proximity stores, four supermarkets and one hypermarket.
§ 15 supermarkets were opened following refurbishments in Q3 2019.
§ The first new-concept Pyaterochka store and a large format Perekrestok store were opened in Q3 2019. Revenue and LFL growth have been strongly positive in refurbished stores.
§ In Q3 2019, X5 opened one new distribution centre in Novosibirsk (30.9 ths sq. m) to serve the proximity format.
§ The online supermarket Perekrestok.ru continued to expand. The total number of orders exceeded 305 ths in Q3 2019, increasing by more than three times compared to Q3 2018.
Note to Editors:
X5 Retail Group N.V. (LSE and MOEX: FIVE, Fitch - 'BB+', Moody's - 'Ba1', S&P - 'BB', RAEX - 'ruAA') is a leading Russian food retailer. The Company operates several retail formats: the chain of proximity stores under the Pyaterochka brand, the supermarket chain under the Perekrestok brand and the hypermarket chain under the Karusel brand.
As of 30 September 2019, X5 had 15,752 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 14,850 Pyaterochka proximity stores, 811 Perekrestok supermarkets and 91 Karusel hypermarkets. The Company operates 43 DCs and 4,029 Company-owned trucks across the Russian Federation.
For the full year 2018, revenue totalled RUB 1,532,537 mln (USD 24,439 mln), Adjusted EBITDA reached RUB 109,871 mln (USD 1,752 mln), and net profit for the period amounted to RUB 28,642 mln (USD 457 mln). In H1 2019, revenue totalled RUB 843,175 mln (USD 12,905 mln), adjusted EBITDA reached RUB 66,072 mln (USD 1,011 mln), and net profit amounted to RUB 22,805 mln (USD 349 mln).
X5's Shareholder structure is as follows: CTF Holdings S.A. - 47.86%, Intertrust Trustees Ltd (Axon Trust) - 11.43%, X5 Directors - 0.08%, treasury shares - 0.01%, Shareholders with less than 3% - 40.62%.
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 Retail 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 Retail Group N.V. speak only as of the date of this announcement. Save as required by any applicable laws or regulations, X5 Retail 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.
Elements of this press release contain or may contain inside information about X5 Retail Group N.V. within the meaning of Article 7(1) of the Market Abuse Regulation (596/2014/EU).
For further details please contact:
Natalia Zagvozdina
Head of Corporate Finance and IR
Tel.:+7 (495) 662-88-88 ext. 27-300
e-mail: Natalia.Zagvozdina@x5.ru
Andrey Vasin
Head of Investor Relations
Tel.:+7 (495) 662-88-88 ext. 13-151
e-mail: Andrey.Vasin@x5.ru
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDTSTMRBTTMBABMJL
Recent news on X5 Retail NV
See all newsREG - X5 Retail Group N.V - X5 acquires Nice Ice production facility
AnnouncementREG - X5 Retail Group N.V - Pyaterochka opens major DC in Samara Region
AnnouncementREG - X5 Retail Group N.V - X5 Group publishes its 2023 Sustainability Report
AnnouncementREG - X5 Retail Group N.V - X5's rights in Russian subsidiary suspended
AnnouncementREG - X5 Retail Group N.V - Moscow court postpones ruling on X5's subsidiary
Announcement