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 fourth quarter (Q4) and the twelve months (12M) of 2021.
Q4 2021 OPERATIONAL HIGHLIGHTS
- Group net retail revenue increased 10.4% YoY to RUB 54.0 bn.
- Group like-for-like (LFL) net retail revenue rose 6.9% YoY, led by both hypermarket and discounter growth.
- O`KEY hypermarkets’ net retail revenue grew 4.2% YoY to RUB 43.5 bn, primarily on the back of a 3.8% YoY LFL revenue increase.
- Total online sales increased 127.1% YoY to RUB 1.7 bn, amounting to 3.8% of O`KEY's revenue.
- DA! discounters’ demonstrated 47.3% YoY net retail revenue growth to RUB 10.5 bn, driven by a 24.8% LFL revenue increase and supported by an expansion programme.
- DA! discounters’ share in the Group’s revenue rose 4.9 pp YoY to 19.4%.
12M 2021 OPERATIONAL HIGHLIGHTS
- Group net retail revenue rose 7.2% YoY to RUB 185.2 bn.
- O`KEY hypermarkets’ net retail revenue increased 2.5% YoY to RUB 150.4 bn, with 1.4% YoY LFL revenue growth.
- Total online sales increased 93.7% YoY to RUB 4.7 bn, accounting for 3.1% of O`KEY's revenue.
- DA! discounters’ net retail revenue grew 34.3% YoY to RUB 34.8 bn, with 16.3% YoY LFL revenue growth.
Armin Burger, Chief Executive Officer at O`KEY Group, commented:
“We are very pleased with the Group’s operational results in 2021 perfectly in line with our previously announced guidelines. Our business model based on a balanced combination of complementary sales formats and channels has proved its efficiency under various market conditions.
O’KEY hypermarkets showed a strong 4.2% YoY net retail revenue increase on the back of a 3.8% LFL increase in Q4 2021 – an acceleration compared to the first half of 2021. We are proceeding with the hypermarkets transformation program as a part of the Group’s strategy of strengthening its market position and supporting our long-term growth. The program aims at rebalancing the assortment with a specific focus on fresh and ultra-fresh categories, enhancing the quality and range of food and non-food products under our own brand, maintaining high standards of customer service, and renovating hypermarkets.
In Q4 2021, we upgraded our first two stores in St. Petersburg and relaunched one newly acquired hypermarket in Moscow. Our renovated hypermarkets are showing good progress in terms of customer traffic and sales density. As announced previously, we intend to rollout gradually the reformatting programme across our whole hypermarket chain in the mid-term.
In 12M 2021, the O`KEY’s total online sales, including our own delivery service and those of third parties, almost doubled YoY, reaching RUB 4.7 bn and accounting for 3.1% of O`KEY’s revenue. We are satisfied with our efficient e-commerce platform and the collaboration with food delivery aggregators.
DA! discounters continuously demonstrate one of the fastest growth rates in the sector. In Q4 2021, DA! showed an impressive 47.3% YoY net retail revenue increase and 24.8% LFL growth. In 12M 2021, DA! grew 34.3% YoY and reached almost RUB 35 bn in revenue, comprising almost 19% of the Group’s top line. In 2021, we opened 34 discounters, bringing their total to 152 stores. Higher store density and penetration into the Central Region results in rising DA! brand awareness and customer loyalty thanks to our competitive value-for-money offers. We plan to intensify the expansion with up to 50 new stores annually starting this year. We expect the number of discounters to double and their share in the Group’s revenue to reach 40%-50% in a 5 years horizon.
We expect to maintain single-digit LFL growth for O`KEY hypermarkets and double-digit LFL growth for DA! discounters in 2022.”