X5 Retail Group N.V. announces audited FY 2006 results
18 Apr 2007
X5 RETAIL GROUP N.V. ANNOUNCES AUDITED FY 2006 RESULTS
GROUP PRO FORMA NET SALES OF US $3,551 MILLION, UP +50% VS. 2005
GROUP PRO FORMA GROSS MARGIN OF 27.9% VS. 25.4% IN 2005
GROUP PRO FORMA NORMALIZED EBITDA OF US $ 360 MILLION, UP +56% VS. 2005
Amsterdam, 18 April 2007 – X5 Retail Group N.V., Russia's largest food retailer in terms of sales, is pleased today to present a strong set of audited financial results for the full year of 2006.
Following the merger of Pyaterochka and Perekrestok, the Group has issued its first annual IFRS consolidated financial statements for the financial year 2006 which are generally in line with the Management accounts reported on 1 March 2007:
On a pro forma basis, net sales increased by 49,6% to US$3,551 million, which represents a significant acceleration of growth in comparison to 34% in FY 2005.
Gross profit margin increased from 25.4% to 27.9%, thereby generating gross profit growth of 63.8%.
Pro forma EBITDA increased by 21% to US$ 295 million, which translates in 55,9% increase in case the effect of the Tushino Plaza capital gain in 2005 and ESOP restructuring costs in 2006 are excluded.
Pro forma Net profit reached US$ 103 million, up 1.2% vs 20052.
Audited results vs. Management accounts
Under IFRS for the purposes of preparation of pro-forma income statement, full year results should be taken for all acquired subsidiaries. Previously reported financial results were based on the Management accounts and included results of Merkado chain operations for November-December 2006 only.
Summary of differences in approaches is as follows:
|
|
IFRS Pro-Forma |
IFRS Consolidated |
Management accounts Pro-Forma |
|
Perekrestok |
From 1 Jan 2006 –
until 31 Dec 2006 |
From 1 Jan 2006 –
until 31 Dec 2006 |
From 1 Jan 2006 –
until 31 Dec 2006 |
|
Pyaterochka |
From 1 Jan 2006 –
until 31 Dec 2006 |
From 19 May 2006 –
until 31 Dec 2006 |
From 1 Jan 2006 –
until 31 Dec 2006 |
|
Merkado |
From 1 Nov 2006 –
until 31 Dec 2006 |
From 1 Nov 2006 –
until 31 Dec 2006 |
From 1 Nov 2006 –
until 31 Dec 2006 |
Audited IFRS pro-forma income statement includes full year 2006 financial results of Merkado operations. This resulted in increased net sales (from US$ 3,485 million to US$ 3,551 million), gross profit (from US$ 972.2 million to US$ 989.5 million), operating expenses (from US$ 530.3 million to US$ 548.8 million), EBITDAR1 (from US$ 445.8 million to US$ 446.8 million) and net rental expenses (from US$ 85.8 to US$ 86.8 million). Absolute level of EBITDA has not changed, while EBITDA margin slightly compressed (from 8.5% to 8.3%) due to increase in sales volume.
Quotes
Vitaliy Podolskiy, Group CFO:
“It is the first time after the merger the Group issued audited annual IFRS consolidated financial statements. Strong financial results for the year of 2006 show that our integration efforts started in May 2006 translated into the first benefits from combined operations, and we are looking with optimism into realization of our longer term strategic objectives.”
12M2006 Financial Highlights
Pro Forma X5 Retail Group N.V.
• Net Sales of US $3,551 million; up 49.6% vs. 12M 2005
• Gross profit of US $990 million, up 63.8% vs. 12M 2005; Gross margin of 27.9% vs. 25.4% 12M 2005
• EBITDA of US $295 million, up 21.0% vs. 12M 2005; EBITDA margin of 8.3% vs. 9.5% 12M 2005
Pyaterochka chain stand-alone
• Net Sales of US $1,973 million; up 45.2% vs. 12M 2005
• Gross profit of US $529 million, up 56.2% vs. 12M 2005; Gross margin of 26.8% vs. 24.9% 12M 2005
• EBITDA of US $178 million, up 9.1% vs. 12M 2005; EBITDA margin of 9.0% vs. 12.0% 12M 2005
Perekrestok chain stand-alone
• Net Sales of US$1,496 million; up 47.4% vs. 12M 2005
• Gross profit of US $438 million, up 64.9% vs. 12M 2005; Gross margin of 29.3% vs. 26.2% 12M 2005
• EBITDA of US $119 million, up 90.9% vs. 12M 2005; EBITDA margin of 8.0% vs. 6.1% 12M 2005 2
Note to Editors:
X5 Retail Group N.V. is Russia's largest food retailer in terms of sales. As of 31 March 2007, the Group had 512 company-managed "Pyaterochka" soft discount stores located in the Moscow (232), St. Petersburg (215) and other Russian areas (65), and 169 company-managed "Perekrestok" supermarkets across Central Russia and Ukraine, including 99 stores in Moscow.
As of 31 March 2007, franchisees operated 533 Pyaterochka branded stores across Russia and Kazakhstan. Perekrestok had 10 stores operated by franchisees in the Moscow area.
Pyaterochka and Perekrestok have merged their operations as of 18 May 2006 to create the clear leader in the Russian food retail market.
The Group’s audited pro forma net sales for the FY 2006 were US $3,551 million, up +50% vs. 2005. Pyaterochka chain provided US $1,973 million of net sales, the Perekrestok chain contributed US $1,496 million of net sales, and Merkado chain contributed US $ 82 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 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 at 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.
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