OREANDA-NEWS. April 28, 2011. DIXY Group – one of Russia’s leading retailers of foods and everyday products - announces consolidated unaudited IFRS results for 2010.

Key figures for 2010 in comparison with the 2009 results:
• Revenue rose 19.4% to RUR 64,799 mln. or 24.7% in USD to USD 2,134 mln.
• Gross Profit rose 17.6% to RUR 17,111 mln., in USD Gross Profit increased by 22.4% to 563 mln. Gross Margin decreased by 40 bp year-on-year to 26.4%.
• EBITDA grew 26.5% to RUR 3,678 mln. In USD EBITDA grew 32.2% to USD 121 mln. EBITDA margin increased by 30 bp over the the same period of 2009 to the level of 5.7%.
• Net Profit amounted to RUR 257.7 mln. (USD 8.5 mln.) compared to the Net Loss of RUR 111.9 mln. (USD 3.5 mln.) for the same period of 2009.
• Net cash from operating activities decreased by 3.8% over the same period of 2009 to RUR 1,984 mln. (USD 65 mln).

During of 2010, 124 new Dixy stores were opened compared to 69 new stores opened during the same period last year. All new stores were opened in the Central and North- Western Federal Districts. Two stores are owned, the rest being opened through long-term lease agreements. Company expects that the total number of organic openings in the DIXY format in 2011 will exceed 150 new stores.

SG&A costs increased by 16.5% over the same period of 2009, while declining as a percentage of Revenue by 60 bp to 23.8% compared to 24.4% for the same period last year. The Company continues to focus on improving efficiency of the operational business processes and tightening cost control.

During of 2010, DIXY Group LFL sales grew by 7.4% (12.4% for the fourth quarter of 2010), and DIXY format LFL sales – by 7.6% and 13.0% correspondingly. The DIXY Group LFL sales positive dynamics was due to the 3.8% increase in customer traffic for 2010 (3.5% for DIXY format), and 3.5% increase in average ticket in the fourth quarter for DIXY Group (4.0% for DIXY format). The positive LFL sales dynamics throughout the year (from 3.5% in the first quarter to 12.4% in the fourth quarter of 2010 is primarily the result of higher levels of customer service, and more  ggressive and efficient promo and advertising activities.

During the period, on the Group level, sales per square meter of selling space grew by 7.9% over the same period last year. The highest 14.7% year-on year sales growth per square meter of selling space was achieved at Megamart stores in the Urals Federal District.

Minmart format stores sales per square meter have grown by 9.1%, DIXY format stores – by 6.8%.
The strengthening of the Company’s promotional efficiency targeting LFL growth was made possible also by means of the increase in levels of centralization of deliveries and logistical service (success of delivery rate). DIXY format centralization rate of deliveries through own distribution centers has reached 83% (84% in the Central Federal District) as of end of December 2010, and general logistics service level in the fourth quarter of 2010 has reached 89%.

For 2010, Gross Profit grew 17.6% to RUR 17,111 mln. or by 22.9% in USD to 563 mln. Gross Margin decreased by 40 bp from 26.8% for the same period of 2009 to 26.4% for 2010. This  mecrease was mainly driven by a more aggressive pricing policy and increase in promotional activities in 2010.

Selling, General & Administrative Expenses in 2010 increased by 16.5%, while decreasing as a percentage of Revenue by 60 bp over the same period of 2009 from 24.4% to 23.8% of Revenue.
Salary Expense in 2010 increased by 16.5%, while decreasing as a percentage of Revenue by 30 bp over the same period of 2009 to 9.6% of Revenue.

Leasing Expense in 2010 increased by 15.8%, while declining by 10 bp from 4.1% of Revenue in 2009 to 4.0 % of Revenue in 2010.
Depreciation and Amortization increased by 21.3%, while staying at the same level of 3.0% of revenue as in the same period of 2009.

Shrinkage in 2010 increased by 11.8%, while decreasing by 10 bp to 2.0% of Revenue compared to 2.0% of Revenue for same period of 2009; shrinkage in the fourth quarter of 2010 decreased to 1.6% of Revenue. In 2010 positive shrinkage expense reduction trend (as a percentage of sales) from 2.5% in the first quarter to 1.6% in the fourth quarter was due to the general improvement of logistics and supply chain efficiency.

Utilities, Repair & Maintenance costs increased by 17.4%, while declining by 10 bp over the same period last year to 1.8% of Revenue for 2010 from 1.9% over the same period last year.

Transportation and Handling Expenses in 2010 increased by 50.6% to RUR 270.1 mln. to 0.6% of Revenue from 0.5% of Revenue (10 bp 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 of 2010 due to external force majeure circumstances (abnormally hot weather in July and August).

Advertising Expenses increased by 24.7%, while staying at the same level of 0.4% of Revenue as in the same period last year.

Other Expenses increased by 7.6%, while increasing by 30 bp over the same period of 2009 from 2.6% of Revenue in 2009 to 2.3% of Revenue in 2010.

EBITDAR2 increased by 21.8% in RUR (27.3% in USD) and reached RUR 6,279 mln. (USD 206.8 mln.). EBITDAR margin increased by 20 bp compared to the same period last year to 9.7% of Revenue.

EBITDA3 grew by 26.5% to RUR 3,678 mln. or 32.2% in USD to USD 121 mln. EBITDA margin increased by 30 bp over the same period last year to the level of 5.7% primarily due to the decrease in Selling, General & Administrative Expenses.

Net Profit amounted to RUR 257.7 mln. (8.5 mln.USD). The Company posted a RUR 104 million net FX loss for 2010, resulting from revaluation of the Company’s USD-denominated debt. In the second half of 2010 the Company eliminated its FX exposure by refinancing all USD-denominated by RUR-denominated debt. Currently the Company debt is fully denominated in Russian Roubles.