DJ Fix Price announces key operating results and revenue for Q2 and H1 2022
Fix Price Group PLC (FIXP) Fix Price announces key operating results and revenue for Q2 and H1 2022 27-Jul-2022 / 09:59 MSK Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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Fix Price announces key operating results and revenue for Q2 and H1 2022
27 July 2022 - Fix Price (LSE and MOEX: FIXP, the "Company"), one of the leading variety value retailers globally and the largest in Russia, today announces its operating results based on management accounts for the second quarter (Q2 2022) and six months (H1 2022) ended 30 June 2022.
Key highlights
-- H1 2022 revenue was up 24.2% y-o-y to RUB 131.8 billion, driven by store network expansion and LFL salesgrowth
-- H1 2022 LFL sales[1] for Russian stores were up 15.8%. H1 2022 LFL sales for the Group were up 13.5%,driven by 14.3% growth in the LFL average ticket, which fully offset a slight contraction in LFL traffic of 0.7%
-- The total number of stores increased by 363, which is in line with the FY 2022 store opening guidance ofapproximately 750 net openings
-- The EBITDA margin for H1 2022 exceeded the FY 2021 level of 19.2%
Q2 2022 operating review
-- Revenue was up 27.0% y-o-y to RUB 69.2 billion, driven by store network expansion and LFL sales growth:? Retail revenue increased by 27.3% y-o-y to RUB 61.3 billion - Wholesale revenue grew by 24.3% y-o-y to RUB 7.9 billion
-- LFL sales increased by 15.4% y-o-y, driven by 16.5% growth in the LFL average ticket, which fully offseta 0.9% contraction in LFL traffic:? LFL average ticket was up 16.5% y-o-y on the back of strong consumer demand for Fix Pricemerchandise, continued assortment rotation and a higher share of the upper range of price points in retailsales - LFL traffic decreased by 0.9% versus the high comparative base of Q2 2021 - LFL sales for the Russian Company-operated stores grew by 18.4%. The performance of theCompany-operated stores in Kazakhstan and Belarus was affected by continued government restrictions and thetough macroeconomic environment
-- The total number of stores increased by 184 over the quarter to 5,267 (578 of which are franchised). Thenew stores added 40.4 thous. sqm of selling space, bringing the total selling space of stores operating under theFix Price brand to 1,137 thous. sqm
-- The total number of registered loyalty cardholders increased by 1.1 million over the quarter to 19.1million, with purchases made using a loyalty card accounting for 52.2% of total sales.[2] The average ticket forpurchases made using a loyalty card increased by 12.8% y-o-y to RUB 444, which is 1.8x higher than the averageticket for transactions completed without a loyalty card
H1 2022 operating review
-- Revenue was up 24.2% y-o-y to RUB 131.8 billion:? Retail revenue increased by 25.4% y-o-y to RUB 116.7 billion - Wholesale revenue grew by 15.4% y-o-y to RUB 15.1 billion
-- LFL sales were up 13.5%:? LFL average ticket increased by 14.3% - LFL traffic was slightly down, by 0.7% - LFL sales at Company-operated stores in Russia grew by 15.8%
-- The total number of stores increased by 363, including 321 Company-operated stores and 42 franchisedstores, which is in line with the FY 2022 store opening guidance of approximately 750 net openings. The new storesadded a total of 80.3 thous. sqm of selling space, bringing the total selling space of stores operating under theFix Price brand to 1,137 thous. sqm
-- The total number of registered loyalty cardholders increased by 2.2 million to 19.1 million during H12022, with penetration in total sales reaching 52.5%
-- The pace of recovery in terms of gross margin exceeded the level of Q4 2021, when it had improved by 80bps y-o-y. This trend was supported by proactive work with the assortment that mitigated the higher cost ofproduction
-- The EBITDA margin exceeded the FY 2021 level of 19.2%
LFL dynamics, %
Q2 2022 Q2 2021 H1 2022 H1 2021 LFL sales 15.4% 11.8% 13.5% 11.9% LFL traffic (0.9%) 21.8% (0.7%) 9.0% LFL average ticket 16.5% (8.2%) 14.3% 2.6%
Store base, geographical coverage and selling space
30.06.2022 31.12.2021 30.06.2021 Total number of stores 5,267 4,904 4,585 Russia 4,772 4,445 4,204 Belarus 236 212 180 Kazakhstan 206 172 138 Uzbekistan 13 42 38 Latvia 28 24 19 Georgia 6 4 4 Kyrgyzstan 6 5 2 Number of Company-operated stores 4,689 4,368 4,099 Russia 4,271 3,975 3,775 Belarus 227 203 171 Kazakhstan 181 148 115 Uzbekistan 10 42 38 Number of franchised stores 578 536 486 Russia 501 470 429 Belarus 9 9 9 Kazakhstan 25 24 23 Latvia 28 24 19 Georgia 6 4 4 Kyrgyzstan 6 5 2 Uzbekistan 3 - - Selling space (sqm) 1,137,140 1,056,840 983,919 Company-operated stores 1,009,087 938,392 877,518 Franchised stores 128,053 118,448 106,401
Development of Company-operated stores
Q2 2022 Q2 2021 H1 2022 H1 2021 Gross openings 200 224 388 404 Russia 171 170 330 312 Belarus 10 17 24 29 Kazakhstan 19 23 34 39 Uzbekistan - 14 - 24 Closures 34 26 67 47 Russia 14 23 34 44 Belarus - 1 - 1 Kazakhstan - 1 1 1 Uzbekistan 20 1 32 1 Net openings 166 198 321 357 Russia 157 147 296 268 Belarus 10 16 24 28 Kazakhstan 19 22 33 38 Uzbekistan (20) 13 (32) 23
Operating results
Store network development
-- The total number of stores increased by 14.9% y-o-y to 5,267; the share of franchised stores amounted to11.0% of the total store count (up 37 bps y-o-y)
-- The Company opened 184 stores on a net basis during Q2 2022, including 166 Company-operated stores and 18franchised stores, compared to 231 stores (net) in Q2 2021, including 198 Company-operated stores and 33 franchisedstores
-- In Q2 2022, Fix Price closed 34 Company-operated stores versus 26 Company-operated store closures in Q2 2021. Fix Price continued renegotiating lease terms with landlords and replacing profitable stores with sitesnearby with higher efficiency
-- In Q2 2022, Fix Price continued expansion across Russia and internationally: 7.6% of net openings were ingeographies outside of Russia. The share of international geographies remained stable at 9.4% of the total storebase
-- Total selling space increased by 40.4 thous. sqm during Q2 2022 and stood at 1,137 thous. sqm (a 15.6%increase y-o-y). The average selling space per Fix Price store was 216 sqm, versus 215 sqm as of 30 June 2021
-- In Q2 2022, Fix Price entered 51 new localities. The Company has a presence in 80 of Russia's 85 regions,which covers 98% of the country's population
LFL sales growth
-- LFL sales grew by 15.4% in Q2 2022, driven by 16.5% increase in the LFL average ticket, which offset aslight contraction in LFL traffic, of 0.9%
-- Even after stockpiling in March 2022, Fix Price's diverse merchandise at highly attractive prices helpeddrive double-digit LFL sales uplift. Assortment rotation within categories and price points supported growth in theLFL average ticket, while LFL traffic was down slightly y-o-y from the elevated level of 21.8% in Q2 2021, whenmajor COVID-related restrictions were loosened in Russia
-- At the country level, LFL sales were led by Russia, with an 18.4% y-o-y increase in Q2 2022. InKazakhstan and Belarus, LFL sales were affected by continuous pressure on customers' real disposable income, whileFix Price had to temporarily reduce its assortment matrix in the reporting period due to state regulations
Assortment and category mix
-- Amid sustained uncertainty, consumers remained cautious and delayed impulse buying, while focusing moreon essentials. The share of food in retail sales reached 30.9% in Q2 2022, up from 29.4% for the same period lastyear. The share of drogerie (household chemicals and hygiene products) in retail sales remained elevated at 26.4%,compared to 22.9% in Q2 2021, reflecting Fix Price's competitive assortment and price proposition
-- In Q2 2022, drogerie and food products recorded the highest LFL sales growth among categories, at 38% and25% respectively. LFL sales of household goods, clothes and DIY products also enjoyed double-digit increases
-- The share of price points above RUB 200 in retail sales reached 13.4% in Q2 2022, up from 5.9% in Q2 2021and 8.9% in Q1 2022. The share of price points above RUB 100 in retail sales increased to 34.7% in Q2 2022 from24.5% for the same period last year, reflecting continued utilisation of price points' potential
-- The average ticket increased by 16.3% y-o-y to RUB 307 in Q2 2022 amid the introduction of new productsand assortment rotation
Loyalty programme development
-- Another 1.1 million loyalty cards were issued during Q2 2022, taking the total number to 19.1 million;the increase was driven by promotional campaigns for loyalty programme members, while the share of active users[3]remained solid at 55%
-- Transactions using loyalty cards accounted for 52.2% of total retail sales for Q2 2022, compared to 42.2%in Q2 2021
-- The average ticket for purchases made using a loyalty card grew by 12.8% y-o-y in Q2 2022 to RUB 444,which is 1.8 times higher than the average ticket for transactions completed without a loyalty card, RUB 243
Revenue dynamics
RUB million Q2 2022 Q2 2021 Change Q2'22 vs Q2'21, % H1 2022 H1 2021 Change H1'22 vs H1'21, % Revenue 69,158 54,457 27.0% 131,788 106,116 24.2% Retail revenue 61,303 48,140 27.3% 116,688 93,026 25.4% Wholesale revenue 7,855 6,317 24.3% 15,100 13,090 15.4%
The Group's revenue was up by 27.0% y-o-y to RUB 69.2 billion for Q2 2022, driven by 27.3% growth in retail revenue and a 24.3% increase in wholesale revenue.
Retail revenue spiked to RUB 61.3 billion on the back of network expansion and a healthy 15.4% increase in like-for-like sales, which was partially offset by the softer sales densities of the Company-operated stores in Belarus and Kazakhstan.
Wholesale revenue growth to RUB 7.9 billion was driven by the opening of new franchised stores, while the share of wholesale revenue in the Company's total revenue was down slightly, by 24 bps, to 11.4% due to faster growth of the sales densities of Company-operated stores.
About the Company
Fix Price (LSE and MOEX: FIXP), one of the leading variety value retailers globally and the largest in Russia, has helped its customers save money every day since 2007. Fix Price offers its customers a unique and constantly refreshed product assortment of non-food goods, personal care and household products and food items at low fixed price points.
As of 30 June 2022, Fix Price operated 5,267 Fix Price stores in Russia and neighbouring countries, all of them stocking approximately 2,000 SKUs across around 20 product categories. As well as its own private brands, Fix Price sells products from leading global names and smaller local suppliers. The Company operates 8 DCs covering 80 regions of Russia and 6 countries.
In 2021, the Company recorded revenue of RUB 230.5 billion, EBITDA of RUB 44.2 billion and net profit of RUB 21.4 billion, in accordance with IFRS.
Contacts
Fix Price Investor Relations Fix Price Media Relations Elena Mironova Ekaterina Goncharova ir@fix-price.com elukina@fix-price.ru +7 495 902 50 00 (ext. 1918) +7 967 009 32 70
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[1] Here and hereinafter, like-for-like (LFL) sales, average ticket and number of tickets are calculated based on the results of stores operated by Fix Price and that were operational for at least 12 full calendar months preceding the reporting date. LFL sales and average ticket are calculated based on retail revenue including VAT. LFL numbers exclude stores that were temporarily closed for seven or more consecutive days during the reporting and/ or comparable periods
[2] Loyalty programme data is calculated for Fix Price stores operating in Russia
[3] Members of the loyalty programme who make at least one purchase per month
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ISIN: US33835G2057 Category Code: MSCU TIDM: FIXP LEI Code: 549300EXJV1RPGZNH608 OAM Categories: 2.2. Inside information Sequence No.: 177275 EQS News ID: 1406555 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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July 27, 2022 02:59 ET (06:59 GMT)
