OREANDA-NEWS. December 20, 2010. DIXY Group - one of the leading food and FMCG retailers in Russia - announces consolidated unaudited IFRS results for the nine months of 2010.

Key figures for the 9 months of 2010 in comparison with the 9 months of 2009 results:

•           Revenue rose 17.0% to RUR 46,360 mln. or 25.6% in USD to USD 1,532 mln.

•           Gross Profit rose 13.1% to RUR 12,002 mln., in USD Gross Profit increased by 21.4% to

396.7    mln. Gross Margin decreased by 0.9 pp year-on-year to 25.9%.

•           EBITDA grew 8.3% to RUR 2,229 mln. In USD EBITDA grew 16.2% to USD 76 mln. EBITDA margin decreased by 0.4 pp over the the same period of 2009 to the level of 5.0%.

•           Net Loss amounted to RUR 37.3 mln. (USD 1.2 mln.) compared to the Net Loss of RUR 101.9 mln. (USD 3 mln.) for the nine months of 2009.

•           Net cash from operating activities increased 153.9% over the same period of 2009 to RUR

768.8    mln. (USD 25.4 mln).

Key financial performance indicators as per unaudited 9 months 2010 financial results

 

9mo 2010

9mo 2009

A%

In thousands of RUR

 

 

 

Net Sales

46,360,079

39,621,662

17.0%

Gross Profit

12,001,857

10,612,742

13.1%

EBITDAR

4,179,706

3,789,623

10.3%

EBITDA

2,299,294

2,123,932

8.3%

Net Profit

-37,325

-101,952

—

Net Cash from Operating Activities

768,848

302,799

153.9%

 

September 30, 2010

December 31,

2009

Net Debt1

7,606,601

7,275,780

4.5%

 

In thousands of USD

9mo 2010

9mo 2009

A%

Net Sales

1,532,372

1,219,826

25.6%

Gross Profit

396,706

326,733

21.4%

EBITDAR

138,155

116,671

18.4%

EBITDA

76,000

65,389

16.2%

Net Profit

-1,234

-3,139

—

Net Cash from Operating Activities

25,413

9,322

172.6%

 

September 30, 2010

December 31,

2009

Net Debt

250,192

240,568

4.0%

 

% of Sales

9mo 2010

9mo 2009

 

Gross Margin

25.9%

26.8%

 

EBITDAR

9.0%

9.6%

 

EBITDA

5.0%

5.4%

 

Net Profit

-0.1%

-0.3%

 

Revenue by Format

In thousands RUR

9mo 2010

9mo 2009

A%

DIXY

39 010 964

33 088 352

17,9%

V-MART

0

68 034

—

MEGAMART

5 202 103

4 483 396

16,0%

MINIMART

1 595 999

1 476 071

8,1%

Other Revenue

551 013

505 809

8,9%

 

46 360 079

39 621 662

17,0%

 

In thousands USD

9mo 2010

9mo 2009

A%

DIXY

1 289 457

1 018 686

26,6%

V-MART

0

2 095

~

MEGAMART

171 949

138 030

24,6%

MINIMART

52 754

45 444

16,1%

Other Revenue

18213

15 572

17,0%

 

1 532 372

1 219 826

25,6%

 

Average Basket Size by Format

In RUR

9mo 2010

9mo 2009

A%

DIXY

212

208

1,8%

MEGAMART

498

528

-5,7%

MINIMART

362

368

-1,8%

During the nine months of 2010, 71 new Dixy stores were opened compared to 38 new stores opened uring the same period last year. All new stores were opened in the Central and North-Western Federal Districts through long-term lease agreements. Company expects that the total number of openings for the ear will exceed 100 new stores.

iG&A costs increased by 13.9% over the same period 2009, while declining as a percentage of Revenue y 0.7 pp to 23.7% compared to 24.4% over the same period last year. The Company will continue to 3cus on tightening cost control and improving efficiency of the operational business processes.

During the nine months of 2010, DIXY Group LFL sales grew 5.5% (6.6% for the third quarter of 2010), nd DIXY format LFL sales - 5.6% and 6.6% correspondingly. The DIXY Group LFL sales positive ynamics was due to the 4.3% increase in customer traffic for the nine months (4.1% for DIXY format), nd 2.7% increase in average ticket in the third quarter for DIXY Group (3.0% for DIXY format).

During the period, on the Group level, sales per square meter of selling space grew by 4.9% over the ame period last year. The highest 8.1% year-on year sales growth per square meter of selling space was chieved at Minimart stores in the Urals Federal District. Positive LFL dynamic is primarily the result of higher levels of customer service, and more aggressive promo and advertising activities. The strengthening of the Company's promotional efficiency targeting LFL growth was made possible also by means of the increase in the DIXY format levels of logistical service (success of delivery rate) to 83.4% in the third quarter of 2010 and centralization of deliveries to 79.0% (80.9% in the Central Federal District) as of September 2010.

For the nine months of 2010, Gross Profit grew 13.1% to RUR 12,002 mln. or by 21.4% in USD to 396.7 mln. Gross Margin decreased by 0.9 pp from 26.8% for the nine months of 2009 to 25.9% for the nine months of 2010. This decrease was mainly driven by a more aggressive pricing policy and increase in promotional activities.

Salary Expense in the nine months of 2010 increased by 13.1%, while decreasing as a percentage of Revenue by 0.3 pp over the same period of 2009 (10.1% of Revenue) to 9.8% of Revenue.

Leasing Expense for the nine months of 2010 increased by 12.9%, while declining by 0.2 pp from 4.2% of Revenue in the nine months of 2009 to 4.0 % of Revenue in the nine months of 2010.

Depreciation and Amortization increased by 10.7%, while declining by 0.2 pp as a percentage of Revenue from 2.9% of Revenue in the nine months of 2009 to 2.8% of Revenue in the nine months of 2010.

Shrinkage for the nine months of 2010 increased by 34.6% by 0.3 pp to 2.2% of Revenue compared to 1.9% of Revenue for the nine months of 2009; shrinkage in the third quarter of 2010 stayed at the same level of 2.0% of Revenue as in the second quarter. The positive trend of shrinkage expense reduction (as a percentage of sales) temporarily slowed down in the third quarter due to external force majeure circumstances (abnormally hot weather in July and August). In the fourth quarter the positive trend of shrinkage expense reduction will be continued.

Utilities, Repair & Maintenance costs rose 4.0% to RUR 825.0 mln., while declining by 0.2 pp over the same period last year to 1.8% of Revenue for the nine months of 2010 from 2.0% over the same period last year.

Transportation and Handling Expenses for the nine months of 2010 increased by 42.8% to RUR 270.1 mln. to 0.6% of Revenue from 0.5% of Revenue (0.1 pp increase) over the same period last year on the back of increase in distribution centers centralization and shipments levels in 2010 and higher average shipment weight and lower average box cost in the third quarter.

Advertising Expenses increased by 28.6% to 0.4% of Revenue compared to 0.3% of Revenue over the same period last year. The increase by 0.1 pp in the advertising expense was due to a change in Company's advertising policy and a more extensive use of Federal media channels and mass-media for promotions.

EBITDAR increased by 10.3% in RUR (18.4% in USD) and reached RUR 4,180 mln. (USD 138.2 mln.). EBITDAR margin decreased by 0.6 pp compared to the same period last year to 9.0% of Revenue as a result of Gross Margin decrease by 0.9 pp year-on-year.

EBITDA grew 8.3% to RUR 2,299 mln. or 16.2% in USD to USD 76 mln. EBITDA margin decreased by 0.4 pp over the same period last year to the level of 5.0% due to the increase in shrinkage, marketing and transportation and handling expenses.

For the nine months of 2010 the DIXY Group recorded Net Loss of RUR 37.3 mln. (1.2 mln.USD). This profit includes the FX loss of RUR 105 mln..