RNS Number : 1999Q
X5 Retail Group N.V.
26 October 2021
 

X5 REPORTS 11.7% REVENUE GROWTH IN Q3 2021
7.9% ADJ. EBITDA MARGIN PRE-IFRS 16

ü In Q3 2021, X5 delivered revenue growth of 11.7% year-on-year (y-o-y), driven by a 10.4 p.p. rise in offline sales and other revenue and a 1.3 p.p. contribution from growing digital business sales, which comprised 2% of consolidated revenue.

ü Gross margin increased by 67 b.p. to 26.2% (25.8% pre-IFRS 16(1)) in Q3 2021, driven by an improvement in commercial margin, a lower share of promo and improved shrinkage, slightly offset by higher logistics costs.

ü Adjusted EBITDA(2) margin reached 12.9% (7.9% pre-IFRS 16).

ü SG&A expenses excluding D&A&I, LTI, other one-off share-based payments and the impact of the Karusel transformation increased as a percentage of revenue by 102 b.p. (up 85 b.p. pre-IFRS 16), mainly driven by higher staff costs, third-party services and expenses related to digital business.

ü Net profit margin increased by 64 b.p. y-o-y (6 b.p. pre-IFRS 16) to 2.2% in Q3 2021 (2.5% pre-IFRS 16).

ü The net debt/EBITDA ratio was 3.08x (1.50x pre-IFRS 16) as of 30 September 2021.

 

Amsterdam, 26 October 2021 - 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 Karusel retail chains, today released its unaudited condensed consolidated interim financial information for the three months (Q3) and nine months (9M) ended 30 September 2021, in accordance with International Financial Reporting Standards as adopted by the European Union.

X5 Chief Executive Officer Igor Shekhterman said:

"In the third quarter X5 continued to grow revenue and maintain margins that were in line with or above our strategic targets. Our offline businesses continued to expand at a steady pace, with a focus on efficiency and rationalising our CVP to customer needs. Our digital businesses continued to expand at an accelerated pace, contributing 2% of total revenue, compared to 1% for FY2020. In Q3 2021 X5 posted 11.7% revenue growth, with both Pyaterochka and Perekrestok contributing double-digit revenue increases during the quarter.

"We are very pleased with the NPS results and LFL(3) sales performance that our new store concepts are delivering at Pyaterochka and Perekrestok. We also announced plans to roll out our new hard discounter retail chain called Chizhik by opening up to 3,000 stores over the next three years. This new format will address demand for rational, smart shopping, providing great value for money with a high share of private label goods.

"We continue to deliver on strategic goals such as strengthening the existing business. We continue to succeed at reducing shrinkage even further. We are also adapting to new challenges like labour shortages by increasing our use of automated and digital technologies that can streamline our personnel needs. Our Food.ru media platform is starting to expand and deepen its integration into X5's digital services, helping us to gain insights into customer preferences and guide them towards the X5 services that can meet their food needs.

"At the moment, X5 is also on track to deliver RUB 50 billion in dividends based on our expected full year performance. I am also pleased to note that we are well on track to deliver on some of our key 2023 ESG strategy goals, having already reduced CO2 emissions per sq. m of selling space by 9%, using sustainable packaging for 48% of our private label goods and recycling 85% of the recyclable waste we generate in our operations."

 

Profit and loss statement highlights(4)

 

RUB mln

IFRS 16

Pre-IFRS 16

Q3 2021

Q3 2020

change,

Q3 2021

change,

y-o-y, %

y-o-y, %

Revenue

543,586

486,641

11.7

543,586

486,641

11.7

incl. net retail sales(5)

540,718

485,552

11.4

540,718

485,552

11.4

Pyaterochka (incl. express delivery)

448,065

399,776

12.1

448,065

399,776

12.1

Perekrestok (incl. Vprok.ru Perekrestok and express delivery)

85,083

74,568

14.1

85,083

74,568

14.1

Karusel

6,546

11,207

(41.6)

6,546

11,207

(41.6)

Gross profit

142,170

124,011

14.6

140,163

122,226

14.7

Gross profit margin, %

26.2

25.5

67 b.p.

25.8

25.1

67 b.p.

Adj. EBITDA(1)

70,177

63,637

10.3

42,804

39,210

9.2

Adj. EBITDA margin, %

12.9

13.1

(17) b.p.

7.9

8.1

(18) b.p.

EBITDA 

69,195

63,129

9.6

41,822

38,702

8.1

EBITDA margin, %

12.7

13.0

(24) b.p.

7.7

8.0

(26) b.p.

Operating profit

31,684

27,958

13.3

23,110

21,324

8.4

Operating profit margin, %

5.8

5.7

8 b.p.

4.3

4.4

(13) b.p.

Net profit

12,225

7,841

55.9

13,647

11,949

14.2

Net profit margin, %

2.2

1.6

64 b.p.

2.5

2.5

6 b.p.

 

RUB mln

IFRS 16

Pre-IFRS 16

9M 2021

9M 2020

change,

9M 2021

9M 2020

change,

y-o-y, %

y-o-y, %

Revenue

1,597,289

1,449,266

10.2

1,597,289

1,449,266

10.2

incl. net retail sales(5)

1,590,909

1,446,988

9.9

1,590,909

1,446,988

9.9

Pyaterochka (incl. express delivery)

1,302,386

1,175,615

10.8

1,302,386

1,175,615

10.8

Perekrestok (incl. Vprok.ru Perekrestok and express delivery)

262,084

228,528

14.7

262,084

228,528

14.7

Karusel

24,750

42,844

(42.2)

24,750

42,844

(42.2)

Gross profit

411,807

366,526

12.4

405,878

361,153

12.4

Gross profit margin, %

25.8

25.3

49 b.p.

25.4

24.9

49 b.p.

Adj. EBITDA(1)

203,561

186,498

9.1

123,703

114,044

8.5

Adj. EBITDA margin, %

12.7

12.9

(12) b.p.

7.7

7.9

(12) b.p.

EBITDA 

200,755

184,968

8.5

120,897

112,514

7.5

EBITDA margin, %

12.6

12.8

(19) b.p.

7.6

7.8

(19) b.p.

Operating profit

89,487

84,899

5.4

65,349

63,781

2.5

Operating profit margin, %

5.6

5.9

(26) b.p.

4.1

4.4

(31) b.p.

Net profit

34,783

26,614

30.7

38,943

36,399

7.0

Net profit margin, %

2.2

1.8

34 b.p.

2.4

2.5

(7) b.p.

 

Revenue

Revenue growth reached 11.7% year-on-year in Q3 2021, driven by positive like-for-like (LFL) sales, selling space expansion and 156.9% revenue growth in X5's digital businesses. The latter reflected higher demand from customers for online services, an incremental increase in the number of new online customers, expansion of express delivery operations to new geographies, expansion of Vprok.ru Perekrestok's assortment, expansion of the 5Post delivery network and additional new e-commerce partners for 5Post.

Selling space by format, square meters (sq. m) 


As of

30-Sep-21

As of

31-Dec-20

change vs

31-Dec-20, %

As of

30-Sep-20

change vs

30-Sep-20, %

Selling space, sq. m

Pyaterochka

6,909,602

6,541,622

5.6

6,414,939

7.7

Perekrestok

1,080,711

1,013,860

6.6

978,007

10.5

Karusel

133,071

222,119

(40.1)

225,334

(40.9)

X5 Group(6)

8,212,057

7,840,055

4.7

7,679,755

6.9

Q3 and 9M 2021 LFL store performance by format, % change y-o-y

In Q3 and 9M 2021, LFL sales performance remained healthy, with figures up 4.8% and 3.7% y-o-y respectively.

The LFL basket was the main driver of LFL sales in Q3 2021, reflecting normalised customer behaviour.


Q3 2021

9M 2021


Sales

Traffic

Basket

Sales

Traffic

Basket

Pyaterochka

5.0

(0.0)

5.0

4.1

1.3

2.7

Perekrestok

4.5

2.0

2.4

2.9

4.2

(1.2)

Karusel

(4.3)

(8.7)

4.8

(8.6)

(8.0)

(0.6)

X5 Group

4.8

0.1

4.7

3.7

1.5

2.1

For more details on net retail sales performance, please refer to X5's Q3 2021 Trading Update.

Gross profit margin

Gross profit margin under IFRS 16 increased by 67 b.p. y-o-y to 26.2% (by 67 b.p. y-o-y to 25.8% pre-IFRS 16) in Q3 2021. An improvement in commercial margin, which was supported by the product mix reflecting abnormally hot weather in the central part of Russia and slightly lower promo levels vs Q3 2020, as well as an improved level of shrinkage, was partially offset by higher logistics costs on the back of rising market competition for logistics staff due to higher COVID-19 cases and low migrant labour supply.

Selling, general and administrative (SG&A) expenses (excl. D&A&I and the impact of the Karusel transformation)

RUB mln

IFRS 16

Pre-IFRS 16

Q3 2021

Q3 2020

change,

Q3 2021

Q3 2020

change,

y-o-y, %

y-o-y, %

Staff costs

(47,257)

(39,372)

20.0

(47,257)

(39,372)

20.0

% of revenue

8.7

8.1

60 b.p.

8.7

8.1

60 b.p.

incl. LTI and share-based payments

(889)

(508)

75.0

(889)

(508)

75.0

staff costs excl. LTI and share-based payments as % of revenue

8.5

8.0

54 b.p.

8.5

8.0

54 b.p.

Lease expenses

(3,749)

(2,847)

31.7

(26,483)

(24,221)

9.3

% of revenue

0.7

0.6

10 b.p.

4.9

5.0

(11) b.p.

Utilities

(10,892)

(9,531)

14.3

(10,892)

(9,531)

14.3

% of revenue

2.0

2.0

5 b.p.

2.0

2.0

5 b.p.

Other store costs

(5,606)

(5,224)

7.3

(5,813)

(5,467)

6.3

% of revenue

1.0

1.1

(4) b.p.

1.1

1.1

(5) b.p.

Third-party services

(4,972)

(3,764)

32.1

(4,933)

(3,676)

34.2

% of revenue

0.9

0.8

14 b.p.

0.9

0.8

15 b.p.

Other expenses

(6,295)

(4,532)

38.9

(7,587)

(5,502)

37.9

% of revenue

1.2

0.9

23 b.p.

1.4

1.1

27 b.p.

SG&A (excl. D&A&I and impact from the Karusel transformation)

(78,771)

(65,270)

20.7

(102,965)

(87,769)

17.3

% of revenue

14.5

13.4

108 b.p.

18.9

18.0

91 b.p.

SG&A (excl. D&A&I, LTI, share-based payments and impact from the Karusel transformation)

(77,882)

(64,762)

20.3

(102,076)

(87,261)

17.0

% of revenue

14.3

13.3

102 b.p.

18.8

17.9

85 b.p.

 

RUB mln

IFRS 16

Pre-IFRS 16

9M 2021

9M 2020

change,

9M 2021

9M 2020

change,

y-o-y, %

y-o-y, %

Staff costs

(135,240)

(116,903)

15.7

(135,240)

(116,903)

15.7

% of revenue

8.5

8.1

40 b.p.

8.5

8.1

40 b.p.

incl. LTI and share-based payments

(2,495)

(1,530)

63.1

(2,495)

(1,530)

63.1

staff costs excl. LTI and share-based payments as % of revenue

8.3

8.0

35 b.p.

8.3

8.0

35 b.p.

Lease expenses

(10,156)

(8,350)

21.6

(77,953)

(71,564)

8.9

% of revenue

0.6

0.6

6 b.p.

4.9

4.9

(6) b.p.

Utilities

(33,052)

(28,800)

14.8

(33,052)

(28,800)

14.8

% of revenue

2.1

2.0

8 b.p.

2.1

2.0

8 b.p.

Other store costs

(16,418)

(15,637)

5.0

(17,058)

(16,375)

4.2

% of revenue

1.0

1.1

(5) b.p.

1.1

1.1

(6) b.p.

Third-party services

(13,999)

(10,095)

38.7

(13,795)

(9,831)

40.3

% of revenue

0.9

0.7

18 b.p.

0.9

0.7

19 b.p.

Other expenses

(19,057)

(13,913)

37.0

(22,391)

(16,381)

36.7

% of revenue

1.2

1.0

23 b.p.

1.4

1.1

27 b.p.

SG&A (excl. D&A&I and the impact of the Karusel transformation)

(227,922)

(193,698)

17.7

(299,489)

(259,854)

15.3

% of revenue

14.3

13.4

90 b.p.

18.7

17.9

82 b.p.

SG&A (excl. D&A&I, LTI, share-based payments and the impact of the Karusel transformation)

(225,427)

(192,168)

17.3

(296,994)

(258,324)

15.0

% of revenue

14.1

13.3

85 b.p.

18.6

17.8

77 b.p.

 

In Q3 2021, 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 102 b.p. to 14.3% (up 85 b.p. to 18.8% pre-IFRS 16), driven by higher staff costs, other expenses and third-party services. Smaller impacts were also seen from lease expenses and utility costs.

Staff costs (excluding LTI and share-based payments) as a percentage of revenue increased by 54 b.p. y-o-y in Q3 2021 to 8.5%, mainly due to targeted indexation of in-store personnel salaries in line with market benchmarks.

LTI and share-based payment expenses amounted to RUB 889 million in Q3 2021. The Company continued to accrue a liability for the deferred conditional payout related to the LTI programme for 2018-2020, the new LTI programme for 2021-2023 and the new LTI programme for new businesses (5Post, Chizhik and Okolo). Accruals for the deferred conditional payout related to the 2018-2020 LTI programme will continue until Q2 2022.

Other expenses (excluding the impact of the Karusel transformation) under IFRS 16 as a percentage of revenue in Q3 2021 increased by 23 b.p. y-o-y to 1.2% (up 27 b.p. to 1.4% pre-IFRS 16) mainly due to a growing share of courier services costs for express delivery reflecting a 5.2x y-o-y increase in the number of orders.

Third-party service expenses under IFRS 16 as a percentage of revenue in Q3 2021 increased by 14 b.p. y-o-y to 0.9% (up 15 b.p. to 0.9% pre-IFRS 16) mainly due to the normalisation of marketing expenses following the lower marketing budgets during the COVID-19 pandemic last year.

Lease expenses under IFRS 16 as a percentage of revenue in Q3 2021 increased by 10 b.p. y-o-y to 0.7% mainly due to a higher number revenue-linked leases. The decrease of pre-IFRS 16 lease expenses by 11 b.p. to 4.9% was caused by a lower share of stores in ramp-up phase.

Utility costs as a percentage of revenue in Q3 2021 increased by 5 b.p. y-o-y to 2.0%, driven by the hot weather in some regions of our operations.

Other store costs under IFRS 16 as a percentage of revenue in Q3 2021 decreased by 4 b.p. y-o-y (falling by 5 b.p. pre-IFRS 16) mainly due to lower expenses associated with additional measures related to the COVID-19 pandemic, such as masks and disposable gloves for personnel as well as additional disinfection procedures in stores.

Lease/sublease and other income(7)

As a percentage of revenue, the Company's income from leases, subleases and other operations under IFRS 16 totalled 1.1%, an increase of 18 b.p. y-o-y in Q3 2021 (a decrease of 1 b.p. to 0.9% pre-IFRS 16), due to the favourable modification of lease agreements.

EBITDA and EBITDA margin

RUB mln

IFRS 16

Pre-IFRS 16

Q3 2021

Q3 2020

change,

Q3 2021

Q3 2020

change,

y-o-y, %

y-o-y, %

Gross profit

142,170

124,011

14.6

140,163

122,226

14.7

Gross profit margin, %

26.2

25.5

67 b.p.

25.8

25.1

67 b.p.

SG&A (excl. D&A&I, LTI, share-based payments and the effect of the Karusel transformation)

(77,882)

(64,762)

20.3

(102,076)

(87,261)

17.0

% of revenue

14.3

13.3

102 b.p.

18.8

17.9

85 b.p.

Net impairment losses on financial assets

(97)

(91)

6.6

(97)

(91)

6.6

% of revenue

0.018

0.019

(0) b.p.

0.018

0.019

(0) b.p.

Lease/sublease and other income (excl. the effect of the Karusel transformation)

5,986

4,479

33.6

4,814

4,336

11.0

% of revenue

1.1

0.9

18 b.p.

0.9

0.9

(1) b.p.

Adj. EBITDA

70,177

63,637

10.3

42,804

39,210

9.2

Adj. EBITDA margin, %

12.9

13.1

(17) b.p.

7.9

8.1

(18) b.p.

LTI, share-based payments and other one-off remuneration payment expenses and SSC

(889)

(508)

75.0

(889)

(508)

75.0

% of revenue

0.2

0.1

6 b.p.

0.2

0.1

6 b.p.

Effect of the Karusel transformation

(93)

-

-

(93)

-

-

% of revenue

0.0

-

2 b.p.

0.0

-

2 b.p.

EBITDA 

69,195

63,129

9.6

41,822

38,702

8.1

EBITDA margin, %

12.7

13.0

(24) b.p.

7.7

8.0

(26) b.p.

 

RUB mln

IFRS 16

Pre-IFRS 16

9M 2021

9M 2020

change,

9M 2021

9M 2020

change,

y-o-y, %

y-o-y, %

Gross profit

411,807

366,526

12.4

405,878

361,153

12.4

Gross profit margin, %

25.8

25.3

49 b.p.

25.4

24.9

49 b.p.

SG&A (excl. D&A&I, LTI, share-based payments and the effect of the Karusel transformation)

(225,427)

(192,168)

17.3

(296,994)

(258,324)

15.0

% of revenue

14.1

13.3

85 b.p.

18.6

17.8

77 b.p.

Net impairment losses on financial assets

(227)

(290)

(21.7)

(227)

(290)

(21.7)

% of revenue

0.014

0.020

(1) b.p.

0.014

0.020

(1) b.p.

Lease/sublease and other income (excl. the effect of the Karusel transformation)

17,408

12,430

40.0

15,046

11,505

30.8

% of revenue

1.1

0.9

23 b.p.

0.9

0.8

15 b.p.

Adj. EBITDA

203,561

186,498

9.1

123,703

114,044

8.5

Adj. EBITDA margin, %

12.7

12.9

(12) b.p.

7.7

7.9

(12) b.p.

LTI, share-based payments and other one-off remuneration payment expenses and SSC

(2,495)

(1,530)

63.1

(2,495)

(1,530)

63.1

% of revenue

0.2

0.1

5 b.p.

0.2

0.1

5 b.p.

Effect of the Karusel transformation

(311)

-

-

(311)

-

-

% of revenue

0.0

-

2 b.p.

0.0

-

2 b.p.

EBITDA 

200,755

184,968

8.5

120,897

112,514

7.5

EBITDA margin, %

12.6

12.8

(19) b.p.

7.6

7.8

(19) b.p.

 

D&A&I

Depreciation, amortisation and impairment costs under IFRS 16 decreased as a percentage of revenue by 33 b.p. y-o-y to 6.9% (down 13 b.p. y-o-y to 3.4% pre-IFRS 16) in Q3 2021, totalling RUB 37,511 million (RUB 18,712 million pre-IFRS 16). This was mainly driven by the phasing of refurbishments (for both IFRS 16 and pre-IFRS 16), as well as positive dynamics in lease payments discussed above resulting in lower depreciation of right of use assets as a percentage of revenue. In 9M 2021, depreciation, amortisation and impairment costs under IFRS 16 increased by 6 b.p. y-o-y to 7.0% (up 12 b.p. y-o-y to 3.5% pre-IFRS 16), totalling RUB 111,268 million (RUB 55,548 million pre-IFRS 16).

Non-operating gains and losses

RUB mln

IFRS 16

Pre-IFRS 16

Q3 2021

Q3 2020

change,

Q3 2021

Q3 2020

change,

y-o-y, %

y-o-y, %

Operating profit

31,684

27,958

13.3

23,110

21,324

8.4

Net finance costs

(14,757)

(13,886)

6.3

(4,411)

(3,935)

12.1

Share of loss of associates

-

(15)

-

-

(15)

-

Net FX result

(79)

(2,568)

(96.9)

(73)

(751)

(90.3)

Profit before tax

16,848

11,489

46.6

18,626

16,623

12.0

Income tax expense

(4,623)

(3,648)

26.7

(4,979)

(4,674)

6.5

Net profit

12,225

7,841

55.9

13,647

11,949

14.2

Net profit margin, %

2.2

1.6

64 b.p.

2.5

2.5

6 b.p.

Effect of the Karusel transformation

194

209

(7.2)

255

209

22.0

% of revenue

0.0

0.0

(0) b.p.

0.0

0.0

0 b.p.

Adj. net profit

12,419

8,050

54.3

13,902

12,158

14.3

Net profit margin, %

2.3

1.7

63 b.p.

2.6

2.5

6 b.p.

 

RUB mln

IFRS 16

Pre-IFRS 16

9M 2021

9M 2020

change,

9M 2021

9M 2020

change,

y-o-y, %

y-o-y, %

Operating profit

89,487

84,899

5.4

65,349

63,781

2.5

Net finance costs

(42,273)

(42,489)

(0.5)

(12,451)

(12,440)

0.1

Share of loss of associates

-

(15)

-

-

(15)

-

Net FX result

698

(4,503)

-

216

(1,204)

-

Profit before tax

47,912

37,892

26.4

53,114

50,122

6.0

Income tax expenses

(13,129)

(11,278)

16.4

(14,171)

(13,723)

3.3

Net profit

34,783

26,614

30.7

38,943

36,399

7.0

Net profit margin, %

2.2

1.8

34 b.p.

2.4

2.5

(7) b.p.

Effect of the Karusel transformation

1,120

1,023

9.5

1,095

1,023

7.0

% of revenue

0.1

0.1

(0) b.p.

0.1

0.1

(0) b.p.

Adj. net profit

35,903

27,637

30.0

40,038

37,422

7.0

Net profit margin, %

2.2

1.9

34 b.p.

2.5

2.6

(8) b.p.

Net finance costs under IFRS 16 in Q3 2021 increased by 6.3% y-o-y to RUB 14,757 million (up 12.1% y-o-y to RUB 4,411 million pre-IFRS 16), driven by increasing interest rates in Russian capital markets on the back of a key rate rise and partially offset by lower interest on lease liabilities charge due to positive dynamic in lease payments as a percentage of revenue discussed above.

The negative net FX result totalled RUB 79 million (RUB 73 million under pre-IFRS 16) in Q3 2021, compared with negative RUB 2,568 million (negative RUB 751 million under pre-IFRS 16) in Q3 2020 due to different dynamics in exchange rates changes.

In Q3 2021, income tax expenses under IFRS 16 increased by 26.7% (by 6.5% pre-IFRS 16).

Consolidated cash flow statement highlights

RUB mln

 IFRS 16

Pre-IFRS 16

Q3 2021

Q3 2020

change,

Q3 2021

Q3 2020

change,

y-o-y, %

y-o-y, %

Net cash from operating activities before changes in working capital

68,450

62,250

10.0

42,250

38,104

10.9

Change in working capital

4,917

(2,600)

-

4,765

(3,400)

-

Net interest and income tax paid

(12,280)

(20,085)

(38.9)

(1,960)

(10,157)

(80.7)

Net cash flows generated from operating activities

61,087

39,565

54.4

45,055

24,547

83.5

Net cash used in investing activities

(21,454)

(20,659)

3.8

(21,708)

(20,659)

5.1

Net cash used in financing activities

(39,581)

(18,527)

113.6

(23,295)

(3,509)

563.9

(3)

(9)

(66.7)

(3)

(9)

(66.7)

Net increase in cash & cash equivalents

49

370

(86.8)

49

370

(86.8)

 

RUB mln

IFRS 16

Pre-IFRS 16

9M 2021

9M 2020

change,

9M 2021

9M 2020

change,

y-o-y, %

y-o-y, %

Net cash from operating activities before changes in working capital

199,254

182,844

9.0

121,759

111,453

9.2

Change in working capital

1,000

(2,916)

-

662

(3,360)

-

Net interest and income tax paid

(46,037)

(56,425)

(18.4)

(16,287)

(26,444)

(38.4)

Net cash flows generated from operating activities

154,217

123,503

24.9

106,134

81,649

30.0

Net cash used in investing activities

(63,820)

(58,702)

8.7

(64,498)

(58,702)

9.9

Net cash used in financing activities

(97,430)

(71,691)

35.9

(48,669)

(29,837)

63.1

(78)

(40)

95.0

(78)

(40)

95.0

Net decrease in cash & cash equivalents

(7,111)

(6,930)

2.6

(7,111)

(6,930)

2.6

In Q3 2021, the Company's net cash from operating activities before changes in working capital under IFRS 16 increased by RUB 6,200 million (up RUB 4,146 million under pre-IFRS 16) and totalled RUB 68,450 million (RUB 42,250 million under pre-IFRS 16), reflecting business growth. The positive change in working capital under IFRS 16 of RUB 4,917 million in Q3 2021 was driven by increases in inventories and accounts payable due to actions taken to improve working capital.

Working capital highlights

RUB mln

30-Sep-21

31-Dec-20

30-Sep-20

Inventories

146,278

144,393

128,683

Trade, other accounts receivable and prepayments

18,334

19,277

14,780

Trade accounts payable

169,268

170,909

149,237

Provisions and other liabilities

88,299

85,976

78,441

Net interest and income tax paid under IFRS 16 in Q3 2021 decreased by 38.9% y-o-y (down 80.7% y-o-y pre-IFRS 16) and totalled RUB 12,280 million (RUB 1,960 million pre-IFRS 16) driven by a one-off tax refund.

As a result, in Q3 2021, net cash flow generated from operating activities under IFRS 16 totalled RUB 61,087 million, up from RUB 39,565 million in Q3 2020 (RUB 45,055 million, up from RUB 24,547 million in Q3 2020 pre-IFRS 16).

In 9M 2021, net cash flows generated from operating activities under IFRS 16 totalled RUB 154,217 million, up 24.9% from RUB 123,503 million for the same period of 2020 (and totalled RUB 106,314 million, up 30.0% from RUB 81,649 million for the same period of 2020 pre-IFRS 16), driven by EBITDA growth, the positive change in working capital and lower taxes paid.

Net cash used in investing activities, which generally consists of payments for property, plant and equipment, under IFRS 16 increased to RUB 21,454 million (or RUB 21,708 million under pre-IFRS 16) in Q3 2021 from RUB 20,659 million in Q3 2020. For 9M 2021, net cash used in investing activities under IFRS 16 increased to RUB 63,820 million (RUB 64,498 million under pre-IFRS 16) from RUB 58,702 million in 9M 2020.

Net cash used in financing activities under IFRS 16 totalled RUB 39,581 million (RUB 23,295 million pre-IFRS 16) in Q3 2021 compared with RUB 18,527 million (RUB 3,509 million pre-IFRS 16) in Q3 2020. For 9M 2021, net cash used in financing activities under IFRS 16 increased to RUB 97,430 million from RUB 71,691 million (and increased to RUB 48,669 million from RUB 29,837 million pre-IFRS 16) in 9M 2020.

Liquidity update

RUB mln

30-Sep-21

% of total

31-Dec-20

% of total

30-Sep-20

% of total

Total debt

242,928


261,947


228,291


Short-term debt

67,983

28.0

77,026

29.4

75,520

33.1

Long-term debt

174,945

72.0

184,921

70.6

152,771

66.9

Net debt (pre-IFRS 16)

230,031


241,939


216,619


Net debt/EBITDA (pre-IFRS 16)

1.50


1.67


1.53


Lease liabilities

(IFRS 16)

567,701


548,501


530,256


Net debt/EBITDA (under IFRS 16)

3.08


3.24


3.16


The Company's net debt/EBITDA ratio under IFRS 16 was 3.08x (1.50x pre-IFRS 16) as of 30 September 2021.

The Company's debt pre-IFRS 16 is 100% denominated in Russian roubles.

As of 30 September 2021, the Company had access to RUB 493,779 million in available credit limits with major Russian and international banks.

(1)   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.

(2)   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.

(3)   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.

(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.

(6)   Including Vprok.ru Perekrestok dark stores and Chizhik stores

(7)   Mainly consists of lease/sublease income, income from the sale of recyclable materials and other one-off gains

 

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 proximity stores under the Pyaterochka brand, Perekrestok supermarkets and Karusel hypermarkets. X5 provides an omnichannel experience to its customers, integrating retail stores and e-commerce through its businesses Vprok.ru Perekrestok, 5Post and Okolo.

As of 30 September 2021, X5 had 18,648 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 17,600 Pyaterochka proximity stores, 980 Perekrestok supermarkets and 34 Karusel hypermarkets. The Company operates 43 DCs and 4,178 Company-owned trucks across the Russian Federation.

X5 is one of the largest employers in Russia. The Company employs over 335 thousand people.

For the full year 2020, revenue totalled RUB 1,978,026 million (USD 27,417 million*), EBITDA pre-IFRS 16 reached RUB 145,137 million (USD 2,012 million), and net profit pre-IFRS 16 for the period amounted to RUB 39,180 million (USD 543 million). In 9M 2021, revenue totalled RUB 1,597,289 million (USD 21,583 million**), adjusted EBITDA pre-IFRS 16 reached RUB 123,703 million (USD 1,671 million), and net profit pre-IFRS 16 amounted to RUB 38,943 million (USD 526 million).

X5's shareholder structure is as follows: CTF Holdings S.A., 47.86%; Intertrust Trustees Ltd (Axon Trust), 11.43%; X5 directors, 0.10%; treasury shares, 0.01%; shareholders with less than 3%, 40.60%.

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.

*FX rate: 72.1464 USD/RUB

** FX rate: 74.0073 USD/RUB

For further details please contact:

Maria Yazeva

Investor Relations Officer

Tel.: +7 (495) 662-88-88 ext. 13-147

e-mail: Maria.Yazeva@x5.ru


 

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