O'KEY Group S.A. (OKEY)
O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q4 AND 12M 2019
30-Jan-2020 / 10:43 CET/CEST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Press release
30 January 2020
O'KEY GROUP ANNOUNCES OPERATING RESULTS FOR Q4 AND 12M 2019
O'KEY Group S.A. (LSE: OKEY, the 'Group') announces its unaudited operating
results for the fourth quarter and twelve months of 2019.
All materials published by the Group are available on its website
www.okeygroup.lu [1].
12M 2019 operating highlights
- Underlying Group net retail revenue, excluding the effect of the
supermarket business sale, increased by 3.0% YoY to RUB 163,154 mln.
- Underlying net retail revenue generated by O'KEY hypermarkets increased
by 0.3% YoY to RUB 145,298 mln in 12M 2019.
- Net retail revenue generated by DA! grew by 31.7% YoY to RUB 17,856 mln
in 12M 2019, supported by a steady growth in traffic (up 24.5% YoY) and
the average ticket (up 5.8% YoY).
- Like-for-like (LFL) net retail revenue of the Group increased by 0.9%
YoY in 12M 2019 due to a 0.9% YoY increase in the LFL average ticket.
- Like-for-like (LFL) net retail revenue generated by O'KEY hypermarkets
decreased by 0.4% YoY in 12M 2019, driven by a 1.8% YoY decrease in LFL
traffic and a 1.4% YoY increase in the LFL average ticket.
- Like-for-like (LFL) net retail revenue generated by DA! increased by
14.9% YoY in 12M 2019, driven by a 8.6% YoY increase in LFL traffic and a
5.8% YoY growth in the LFL average ticket.
- 19 discounters were opened in 12M 2019.
Q4 2019 operating highlights
- Group net retail revenue increased by 1.1% YoY to RUB 46,152 mln.
- Underlying net retail revenue generated by O'KEY hypermarkets decreased
by 1.4% YoY to RUB 41,136 mln in Q4 2019 as a result of lower basket size
due to weaker performance in December, which was triggered by short-term
factors such as abnormal weather conditions influencing customer sentiment
towards seasonal categories, and one-off events such as the renovation of
one of our shopping malls, to be completed in Q2. If we exclude one-off
factors, increases in top-line metrics in December would have been in line
with the trends we observed in October and November. We have also noticed
that December saw a deflation in prices.
- Net retail revenue generated by DA! grew by 26.8% YoY to RUB 5,016 mln
in Q4 2019, supported by a steady growth in traffic (up 22.4% YoY) and the
average ticket (up 3.7% YoY).
- Like-for-like (LFL) net retail revenue of the Group decreased by 0.3%
YoY in Q4 2019, driven by a 1.6% YoY increase in LFL traffic and a 1.8%
YoY decrease in the LFL average ticket.
- Like-for-like (LFL) net retail revenue generated by O'KEY hypermarkets
decreased by 1.4% YoY in Q4 2019, driven by a 0.4% YoY increase in LFL
traffic and a 1.7% YoY decrease in the LFL average ticket.
- Like-for-like (LFL) net retail revenue generated by DA! increased by
11.4% YoY in Q4 2019, driven by a 7.5% YoY increase in LFL traffic and a
3.7% YoY growth in the LFL average ticket. The Group's discounters saw
continued gradual improvements in LFL traffic.
- 14 discounters were opened in Q4 2019.
Stores development of the Group
Indicator Q4 2019 Q4 2018 Net change Change (%)
Number of stores 178 160 18 11.3%
Number of net store 14 10 4 40.0%
openings
Total selling space (sq. 598,308 584,914 13,394 2.3%
m)
Total selling space added 9,634 6,485 3,149 48.6%
(sq. m)
Group key operating indicators for 12M 2019
Segment 12M 2019 12M 2018
Net Traffic Average Net Traffic Average
retail ticket retail ticket
revenue revenue
Group 2.4% 2.1% 0.3% (8.6%) (12.9%) 5.0%
Group LFL 0.9% 0.0% 0.9% (3.3%) (2.6%) (0.6%)
Group key operating indicators for the quarter
Segment Q4 2019 Q4 2018
Net Traffic Average Net Traffic Average
retail ticket retail ticket
revenue revenue
Group 1.0% 4.2% (3.0%) (6.6%) (12.9%) 7.3%
Group LFL (0.3%) 1.6% (1.8%) (2.7%) (3.4%) 0.8%
Underlying Group net retail revenue dynamics by quarter, YoY
Indicator Q1 2019 Q2 2019 Q3 2019 Q4 2019 12M 2019
Underlying Group net 0.9% 6.1% 4.5% 1.1% 3.0%
retail revenue
Key operating indicators by month
Indicator October November December
Net retail revenue 1.9% 3.3% (1.1%)
LFL net retail revenue 0.6% 1.9% (2.2%)
Customer traffic 3.0% 4.2% 5.1%
LFL customer traffic 0.5% 1.5% 2.7%
Average ticket (1.1%) (0.9%) (5.9%)
LFL average ticket 0.1% 0.4% (4.8%)
Underlying Group net retail revenue dynamics by month
Indicator October November December
Underlying Group net retail revenue 2.0% 3.3% (1.1%)
O'KEY: Operating review
Stores development
Indicator Q4 2019 Q4 2018 Net change Change (%)
Number of stores 78 78 - -
Number of net store - (1) 1 (100.0%)
openings
Total selling space (sq. 529,055 528,124 931 0.2%
m)
Total selling space added - (1,272) 1,272 (100.0%)
(sq. m)
In Q4 2019, O'KEY did not open any new hypermarkets. As at 31 December 2019,
the total number of stores was 78, with the total selling space at 529,055
sq. m.
Key operating indicators for 12M 2019
Segment 12M 2019 12M 2018
Net Traffic Average Net Traffic Average
retail ticket retail ticket
revenue revenue
O'KEY (0.4%) (2.5%) 2.1% (11.1%) (18.2%) 8.6%
O'KEY LFL (0.4%) (1.8%) 1.4% (4.3%) (4.8%) 0.4%
Key operating indicators for the quarter
Segment Q4 2019 Q4 2018
Net Traffic Average Net Traffic Average
retail ticket retail ticket
revenue revenue
O'KEY (1.4%) 0.3% (1.7%) (8.9%) (17.9%) 11.0%
O'KEY LFL (1.4%) 0.4% (1.7%) (3.7%) (5.6%) 2.0%
Underlying O'KEY net retail revenue dynamics by quarter, YoY
Parameter Q1 2019 Q2 2019 Q3 2019 Q4 2019 12M 2019
Underlying O'KEY net (2.0%) 3.0% 2.0% (1.4%) 0.3%
retail revenue
Key operating indicators by month
Indicator October November December
Net retail revenue (0.8%) 0.7% (3.3%)
LFL net retail revenue (0.6%) 0.7% (3.2%)
Customer traffic (1.1%) 0.2% 1.4%
LFL customer traffic (0.8%) 0.2% 1.4%
Average ticket 0.3% 0.5% (4.6%)
LFL average ticket 0.2% 0.5% (4.6%)
Underlying O'KEY net retail revenue dynamics by month
Parameter October November December
Underlying O'KEY net retail revenue (0.6%) 0.7% (3.3%)
In Q4 2019, in line with the previously announced assortment improvement
strategy, the Company significantly increased direct imports of fruit and
vegetables, expanded the ranges of fresh and ultra-fresh products, and also
continued its private label development programme. We grew our private label
ranges across different price categories, including That's What You Need,
O'KEY and Selection of O'KEY, by 494 SKUs while significantly expanding the
range of seasonal products. We also rebranded a number of private labels to
reflect our new design concept. The fourth quarter was marked by a
significant increase in LFL turnover - by 26% for the O'KEY and O'KEY
Selection private labels.
In Q4 2019, O'KEY's own production showed strong positive dynamics in LFL
growth - up by 0.5%. During the reporting period, several new product ranges
were launched in our own production at the federal level, and the Hot Bread
project was started within the O'KEY Bakery segment to provide our customers
with freshly baked bread three times a day.
We note that weaker-than-expected LFL performance during the Q4 was mainly
driven by lower LFL in December, which was triggered by several one-off
factors, namely the renovation of one of our shopping malls, to be completed
in Q2, and abnormal weather conditions, leading to weaker-than-expected
sales in seasonal categories. Excluding these one-off factors, sales in
December would have been in line with the positive trends we observed in
October and November. It is also worth noting that we observed trends of
price deflation in December, driven by slowing inflation.
DA!: Operating review
Stores development
Indicator Q4 2019 Q4 2018 Net change Change (%)
Number of stores 100 82 18 22.0%
Number of net store 14 11 3 27.3%
openings
Total selling space (sq. 69,253 56,790 12,463 21.9%
m)
Total selling space added 9,634 7,757 1,877 24.2%
(sq. m)
In Q4 2019, in line with the previously announced plans, the Company opened
14 new discounter stores in Moscow, Yaroslavl, Klin, Tver, Kaluga, Tula, and
Ryazan Regions, increasing the total selling space by 9,634 sq. m to 69,253
sq. m as at 31 December 2019.
Key operating indicators for 12M 2019
Segment 12M 2019 12M 2018
Net Traffic Average Net Traffic Average
retail ticket retail ticket
revenue revenue
Discounters 31.7% 24.5% 5.8% 31.9% 27.8% 3.3%
LFL 14.9% 8.6% 5.8% 12.7% 9.5% 1.2%
discounters
Key operating indicators for the quarter
Segment Q4 2019 Q4 2018
Net Traffic Average Net Traffic Average
retail ticket retail ticket
revenue revenue
Discounters 26.8% 22.4% 3.7% 28.7% 22.1% 5.4%
LFL 11.4% 7.5% 3.7% 12.2% 9.5% 2.5%
discounters
Key operating indicators by month
Indicator October November December
Net retail revenue 26.8% 30.1% 24.4%
LFL net retail revenue 11.4% 13.7% 9.7%
Customer traffic 20.9% 22.4% 23.7%
LFL customer traffic 6.0% 7.2% 9.2%
Average ticket 4.9% 6.3% 0.6%
LFL average ticket 5.1% 6.1% 0.4%
The Company demonstrated an increase in LFL revenue for Q4 2019, driven by
average ticket gains, and a continued growth in LFL traffic. In Q4 2019, the
Company continued improving its value proposition for customers, enhanced
the quality of goods and customer service in stores.
In Q4 2019, the Company rebranded several existing private label brands and
introduced new private label SKUs, expanded the range of products, including
seasonal ones.
OVERVIEW
O'KEY Group S.A. (LSE: OKEY, RAEX - 'ruA-') operates under two main formats:
hypermarkets under the O'KEY brand and discounters under the DA! brand.
As at 31 December 2019, the Group operates 178 stores across Russia (78
hypermarkets and 100 discounters). The Group opened its first hypermarket in
St. Petersburg in 2002 and has since demonstrated continuous growth. O'KEY
is the first among Russian food retailers to launch and actively develop
e-commerce operations in St. Petersburg and Moscow, offering a full range of
hypermarket products for home delivery. The Group operates six e-commerce
pick-up points in Moscow and six e-commerce pick-up points in St.
Petersburg. The Group operates four distribution centres across the Russian
Federation - two in Moscow and two in St. Petersburg. As at 31 December 2019
the Group employs more than 20,000 people.
For the full year 2018, revenue totaled RUB 161,303,411 thousand, EBITDA
reached RUB 8,644,008 thousand, and net loss for the period amounted to RUB
599,755 thousand.
The O'KEY shareholder structure is as follows: NISEMAX Co Ltd - 44.79%, GSU
Ltd - 29.52%, free float - 25.69%.
DISCLAIMER
These materials contain statements about future events and expectations that
are forward-looking statements. These statements typically contain words
such as 'expects' and 'anticipates' and words of similar import. Any
statement in these materials that is not a statement of historical fact is a
forward-looking statement that involves known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
None of the future projections, expectations, estimates or prospects in this
announcement should be taken as forecasts or promises nor should they be
taken as implying any indication, assurance or guarantee that the
assumptions on which such future projections, expectations, estimates or
prospects have been prepared are correct or exhaustive or, in the case of
the assumptions, fully stated in this announcement. We assume no obligations
to update the forward-looking statements contained herein to reflect actual
results, changes in assumptions or changes in factors affecting these
statements.
For further information please contact:
Anton Farlenkov
Corporate Development Director
+7 919 777 0220
Anton.farlenkov@okmarket.ru
www.okeygroup.lu [1]
Alla Golovatenko
Public Relations Manager
+7 926 169 9117
alla.golovatenko@okmarket.ru
www.okeygroup.lu [1]
ISIN: US6708662019
Category Code: MSCH
TIDM: OKEY
LEI Code: 213800133YYU23T4L791
Sequence No.: 43596
EQS News ID: 964127
End of Announcement EQS News Service
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January 30, 2020 04:43 ET (09:43 GMT)
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