O`KEY GROUP announces unaudited financial results for 1h 2019

O`KEY GROUP ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR 1H 2019

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O`KEY Group S.A. (LSE: OKEY, the ‘Group’), one of the leading Russian food retailers, announces its financial results for 1H 2019 based on the condensed consolidated interim financial statements reviewed by their auditors.

All results are presented under IFRS 16 standard unless stated otherwise.

1H 2019 financial highlights

  • Organic Group total revenue, excluding the effect of the supermarket business sale, increased by 3.4% YoY. Total Group revenue increased by 2.2% YoY, from RUB 78,179 mln to RUB 79,883 mln.
  • Organic revenue generated by O`KEY, excluding the effect of the supermarket business sale, increased by 0.4% YoY. Revenue generated by O`KEY decreased by 0.9% YoY to RUB 71,272 mln. The decrease was primarily caused by the supermarket business sale (December 2017 – April 2018).
  • Revenue generated by DA! grew by 36.8% YoY to RUB 8,611 mln, supported by steady growth in traffic and the average ticket.
  • The Group gross margin decreased by 6 bps to 23.6% versus 1H 2018, while gross profit increased by 1.9% YoY to RUB 18,836 mln.
  • The Group EBITDA grew by 3.9% YoY to RUB 6,341 mln compared with RUB 6,105 mln in 1H 2018, while the EBITDA margin increased by 13 bps YoY to 7.9%.
  • O`KEY’s EBITDA decreased by 0.4% YoY to RUB 6,509 mln, while O`KEY’s EBITDA margin increased slightly to 9.1% due to a slight decrease in operating expenses as a percentage of revenue.
  • EBITDA generated by DA! improved from negative RUB 432 mln (–6.9% of sales) in 1H 2018 to negative RUB 169 mln (–2.0% of sales) in 1H 2019, driven by new store openings and higher LFL sales.
  • Net profit for the Group amounted to RUB 632 mln in 1H 2019 compared to negative RUB 897 mln in 1H 2018.
  • Net debt position improved to RUB 29.7 bln at the end of 1H 2019 from RUB 32.0 bln at the end of 1H 2018.

Key events in 1H 2019:

  • 4 new discounters were opened.
  • O`KEY successfully issued 3-year bonds in the amount of RUB 5,000 mln at 9.35% per annum.
  • In a continuing effort to optimize the Group’s property portfolio, the Group sold 2 land plots to a third party in June.

Guidance 2019

  • We are revising our organic hypermarkets’ top line growth guidance slightly upward and now expect it to grow to a low single digit for the whole year
  • We expect double-digit LFL growth for DA! and plan to open 20 discounters in 2019.

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