O`KEY Group S.A. (LSE, MOEX: OKEY, the “Group” or the “Company”), one of Russia’s leading food retailers, has announced its unaudited operating results for the first quarter (Q1) of 2021.
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Q1 2021 operating highlights
● Group net retail revenue1 increased by 1.9% YoY to RUB 43,232 mln in Q1 2021, driven by DA! discounters' revenue growth.
● DA! discounters delivered a 27.0% YoY net retail revenue growth to RUB 7,214 mln in Q1 2021. This was led by a 14.2% LFL net retail revenue increase and a 15.8% YoY expansion of selling space in Q1 2021.
● Net retail revenue at O`KEY hypermarkets declined by 2.0% YoY to RUB 36,019 mln in Q1 2021, primarily due to a high comparable base of March 2020 caused by a pandemic-related spike in consumer demand and a stockpiling trend for certain food and non-food products.
● The Group’s online sales grew by 110.6% YoY to RUB 984 mln in Q1 2021 and reached 2.7% of O`KEY’s net retail revenue.
● The Group expects that the discounters and online business will continue to lead the total growth and confirms its expansion plans of 35 to 40 DA! store openings in 2021.
Armin Burger, Chief Executive Officer at O`KEY Group, commented:
“We are satisfied with the Group's operational results in the first quarter of 2021, especially given the challenging comparables from March 2020, with its panicked surge in consumer demand amid the introduction of pandemic restrictions.”
“DA! discounters continued to lead our overall growth and achieved nearly 17% of the Group’s revenue in Q1 2021. DA! delivered a solid top-line performance, showing a 27.0% year-on-year increase in net retail revenue and a 14.2% LFL growth, in spite of a very high base of 2020. The success of our discounter business is at the heart of our expansion plans: as we have previously reported, we intend to open from 35 to 40 new stores in 2021. We remain focused on keeping our internal operations highly efficient, and further improving the product range and supply to strengthen our market position and boost profitability.”
“We are definitely pleased with the operational results demonstrated by O`KEY hypermarkets in the first quarter of 2021, which, keeping in mind the base effect of March 2020, came above our expectations. Our focus on fresh offer and own production, well-chosen product range at competitive prices, and high level of service underpin our ability to retain customer loyalty even in a tough and fast-changing market environment. We are successfully rolling out our recently launched hypermarket concept and will have up to five O`KEY stores modernised by the end of 2021, with the remaining hypermarkets to follow suit in the medium term.”
”We have been capitalising on current market trends and continue to build up our e-commerce platform and to expand the brand's digital presence, developing an omni-channel shopping environment and partnering with delivery operators. The Group’s online revenue more than doubled year-on-year, reaching 2.7% of O`KEY's revenue in the first quarter of 2021.”
“The proven resilience and stability of the Group’s well-balanced business model based on modern hypermarkets, efficient and fast-growing discounters and an advanced online platform gives us every confidence in our outlook for 2021: we expect a low-single-digit LFL increase at O`KEY and a continuous double-digit LFL growth at DA!.”
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