O`KEY GROUP ANNOUNCES 3.6% REVENUE GROWTH IN Q3 AND 5.8% IN 9M 2020

O`KEY Group S.A. (LSE: OKEY, the “Group”), one of Russia’s leading food retailers, today announces its unaudited operating results for the third quarter (Q3) and first nine months (9M) of 2020.

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Q3 2020 operating highlights
Group net retail revenue* grew by 3.6% YoY to RUB 39,463 mln in Q3 2020.
 Group like-for-like (LFL) net retail revenue increased by 2.8% YoY in Q3 2020, driven by growth at the DA! discounter brand.
DA! discounters delivered a 45.7% YoY increase in net retail revenue to RUB 6,202 mln in Q3 2020, on the back of 26.8% growth of LFL net retail revenue and supported by a 19.4% YoY expansion of selling space.
DA! LFL net retail revenue growth was a result of a 5.6% increase in traffic and a 20.1% rise in the average ticket in Q3 2020.
The Group plans to increase the number of DA! stores by 18% YoY in FY 2020. The Group sees the discounters as a major growth driver of the Group’s top- and bottom-line performance over the medium and long term.
Net retail revenue at O`KEY hypermarkets decreased by 1.6% YoY due mainly to a 1.8% YoY reduction in selling space.
O`KEY hypermarkets LFL net retail revenue was almost flat YoY in Q3 2020, as 16.1% growth of the LFL average ticket growth was offset by a 14.1% decrease in LFL traffic. 

* Hereinafter, net retail revenue, LFL net retail revenue, and the average ticket metrics are provided net of VAT. 

9M 2020 operating highlights
Group net retail revenue rose by 5.8% YoY to RUB 123,793 mln in 9M 2020, driven mainly by LFL revenue growth.
LFL net retail revenue increased by 5.8% YoY in 9M 2020, with contributions from both the O`KEY and DA! brands.
DA! discounters net retail revenue grew by 46.6% YoY to RUB 18,821 mln in 9M 2020, on the back of 29.8% growth of LFL net retail revenue and selling space expansion.
O`KEY hypermarkets LFL net retail revenue improved by 2.8% YoY in 9M 2020, resulting in a net retail revenue increase of 0.8% YoY to RUB 104,973 mln. 


Key events in Q3 2020 and after the reporting date
In September, the Group launched a new O`KEY brand store concept at one of its hypermarkets in Moscow. The concept aims to further enhance the competitiveness of O`KEY stores against long-term consumer trends, and leverages the Group’s own innovative solutions and the latest global expertise. The new concept will further improve the shopping experience and customer service, and also make more efficient use of selling space. The Group plans to continue the roll-out of the new concept to other O`KEY stores.
In October, the Group entered into an agreement with Sbermarket, a nationwide food and essentials delivery service, to deliver online orders from O`KEY hypermarkets in four cities across Russia. The coverage area is planned to expand going forward. Previously, in Q2 2020, O`KEY started cooperation with the iGooods service, which now delivers hypermarket items to customers in five cities where O`KEY has a presence. 

The full text of the Sbermarket announcement is available at https://okeygroup.lu/press-center/press-releases/2020/1722/ 

In October, the Group closed an order book on RUB 5 billion ten-year bonds with a three-year put option to refinance a publically traded bond issue due in April 2021. The annual coupon was set at 7.5%, below the pre-marketed range. The new bonds are planned to start trading on Moscow Exchange in early November 2020. 

The full text of the announcement is available at https://okeygroup.lu/press-center/press-releases/2020/1725/

Commenting on the results, Armin Burger, Chief Executive Officer of O`KEY Group, said: 

“Thanks to the resilience and flexibility of our business model, the Group has reported solid growth amid a challenging economic environment and frequent changes in customer behaviour brought on by the pandemic. In 9M 2020, the Group’s net retail revenue and LFL revenue both grew by 5.8% YoY.” 

“As we have noted previously, DA! discounters are becoming a major growth driver for the Group, with an almost 47% YoY increase in net retail revenue for the first nine months of 2020. In the third quarter, DA! grew retail revenue by an impressive 46% YoY and LFL revenue by 27% on the back of both positive traffic and basket dynamics. Today, DA! is the only successful implementation of the European discounter model in the Russian market, due in particular to its exceptionally competitive and well-balanced assortment of around 2,800 SKUs based on unrivalled private label expertise.” 

“O`KEY hypermarkets remain in demand among consumers thanks to their well-chosen and wide product range, which is designed to meet the main customer needs, as well as competitive prices and a high level of service. In order to further increase the competitiveness of O’KEY stores, we have launched a transformation programme for our hypermarkets in response to global consumer trends. The programme is based on a new store concept that is designed to significantly raise O`KEY’s attractiveness by leveraging the company’s expertise and the latest solutions in modern food retail. We plan to present the new store concept in more detail in November this year.” 

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For further information please contact: 
Natalya Belyavskaya 
Head of Investor Relations 
+7 495 663 6677 ext. 266 
Natalya.Belyavskaya@okmarket.ru 

 Alla Golovatenko 
Public Relations Manager 
+7 926 169 9117 
alla.golovatenko@okmarket.ru 
www.okeygroup.lu