X5 Reports Q2 & H1 2009 Results
27 Aug 2009
Amsterdam, 27 August 2009 - X5 Retail Group N.V., Russia's largest retailer in terms of sales (LSE ticker: FIVE), today published its interim report for the second quarter and first half of 2009.
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Q2 2009 Highlights
Consolidated* net sales increased 46% year-on-year in RUR terms to RUR 68,202 mln or 7% in USD terms to USD 2,111 mln;
On a pro-forma basis**, net sales grew 26% year-on-year in RUR terms and declined 8% in USD terms (due to negative RUR devaluation effect);
Gross profit totaled USD 521 mln, for a gross margin of 24.7%;
EBITDA amounted to USD 184 mln, for an EBITDA margin of 8.7%;
X5 reported a net profit of USD 130 mln on the back of strong operational performance and a non-cash foreign exchange (FX) gain;
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H1 2009 Highlights
Consolidated* net sales increased 46% year-on-year in RUR terms to RUR 131,548 mln or 6% in USD terms to USD 3,978 mln;
On a pro-forma basis**, net sales grew 27% year-on-year in RUR terms and declined 8% in USD terms (due to negative RUR devaluation effect);
Gross profit totaled USD 979 mln, for a gross margin of 24.6%;
EBITDA amounted to USD 347 mln, for an EBITDA margin of 8.7%;
X5 reported a net profit of USD 48 mln, affected by quarter-on-quarter fluctuations in non-cash FX result;
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2009 sales growth and CapEx outlook, as announced on 6 March 2009, reiterated.
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* Consolidated figures include the results of the acquired Karusel business from 30 June 2008 (i.e. include
them in Q2 and H1 2009 and exclude them in Q2 and H1 2008).
** Pro-forma figures include the results of the acquired Karusel business in Q2 and H1 2009, as well as in Q2
and H1 2008.
X5 Retail Group CEO Lev Khasis commented:
"In the first half of the year X5 delivered the highest like-for-like sales growth among Russian peers thanks to our "close-to-the-customer" approach and flexibility of X5's multi-format business model. We continue to fine-tune our formats' strategies to achieve clear distinction between value propositions and ensure long-term multi-format success and leadership. One of our current priorities is private label development, which includes realignment of X5's private label strategy across formats with a focus on building own brands and creating wider
choice to drive sales and support margins.
"Another important area of our focus is efficiency of operations. X5 has launched a multiyear Strategic Efficiency Program to drive long-term operational excellence in line with international benchmarks. The Program covers virtually every area of X5's operations and includes: creation of a fully integrated supply chain; upgrade and integration of the Company's IT systems on the basis of a best-in-class ERP system; new initiatives to improve labour productivity and asset efficiency in areas such as property leasing and energy consumption; and business simplification to standardize processes and increase organizational effectiveness."
X5 Retail Group CFO Evgeny Kornilov added:
"We are quite happy with the achieved cost savings in the past several quarters - our aggressive cost controls enabled continuous reduction in SG&A expense as percentage of sales: second quarter 2009 SG&A accounted for 19.6% of net revenue, 150 bp down from 21.1% on pro-forma basis a year ago. In line with our "close-to-the-customer" policy we reinvested these savings in prices, which enabled X5 to deliver the best like-for-like
performance in Russian food retail. Now, to achieve long-term sustainability, we need to bring our efficiency focus to a new level, which will be done through our Strategic Efficiency Program."
Full version of the report including condensed consolidated interim financial statements for the six months ended 30 June 2009 is available on the corporate website at http://www.x5.ru/en/investors/financial_reports/.
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