OREANDA-NEWS. August 24, 2012. X5 Retail Group N.V., (“X5” or the “Company”) Russia's largest retailer in terms of sales (LSE ticker: “FIVE”), today released the Company’s Interim Report for the Half Year 2012 (the “Interim Report”) prepared in accordance with International Financial Reporting Standards (IFRS) and the Dutch Financial Markets Supervision Act.

Q2 2012 Highlights

•           Net sales increased 9.8% year-on-year (y-o-y) in Russian Rouble (RUR) terms to RUR 123,637 million (mln) and decreased 0.8% in US Dollar (USD) terms to USD 3,988 mln;

•           Gross profit totaled USD 910 mln, resulting in gross profit margin of 22.8%;

•           EBITDA amounted to USD 280 mln, or 7.0% of total net sales; and

•           Net profit reached USD 69 mln, for a net profit margin of 1.7%.

H1 2012 Highlights

•           Net sales increased 6.9% y-o-y in RUR terms to RUR 240,781 mln and decreased 0.1% in USD terms to USD 7,859 mln;

•           Gross profit totaled USD 1,858 mln, resulting in gross profit margin of 23.6%;

•           EBITDA amounted to USD 554 mln, or 7.1% of total net sales; and

•           Net profit reached USD 135 mln, for a net profit margin of 1.7%.

Income Statement - Key Trends and Developments Income Statement Highlights

USD mln

Q2 2012

Q2 2011

% change, y-o-y

H1 2012

H1 2011

% change,

y-o-y

 

Net Sales

3,987.9

4,021.4

(0.8%)

7,858.7

7,866.8

(0.1%)

 

incl. Retail

3,981.8

4,006.0

(0.6%)

7,843.8

7,832.1

0.1%

 

Gross Profit

910.3

946.2

(3.8%)

1,857.5

1,859.8

(0.1%)

 

Gross Profit Margin, %

22.8%

23.5%

 

23.6%

23.6%

 

 

EBITDA

280.3

284.9

(1.6%)

554.3

566.0

(2.1%)

 

EBITDA Margin, %

7.0%

7.1%

 

7.1%

7.2%

 

 

Operating Profit

167.5

172.9

(3.1 %)

338.5

347.6

(2.6%)

 

Operating Profit Margin, %

4.2%

4.3%

 

4.3%

4.4%

 

 

Net Profit

68.9

73.5

(6.2%)

135.2

170.3

(20.6%)

 

Net Profit Margin, %

1.7%

1.8%

 

1.7%

2.2%

 

 

Net Sales & Gross Profit Margin Performance

USD mln

Q2 2012

Q2 2011

% change,

y-o-y

H1 2012

H1 2011

% change,

y-o-y

Net Sales

3,987.9

4,021.4

(0.8%)

7,858.7

7,866.8

(0.1%)

incl. Retail

3,981.8

4,006.0

(0.6%)

7,843.8

7,832.1

0.1%

Soft Discounters

2,619.9

2,502.2

4.7%

5,095.0

4,880.9

4.4%

Supermarkets

840.0

881.6

(4.7%)

1,694.9

1,740.9

(2.6%)

Hypermarkets

483.8

594.7

(18.7%)

984.9

1,153.4

(14.6%)

Convenience stores

35.8

26.3

35.9%

65.7

49.1

33.9%

Online

2.3

1.2

89.7%

3.2

7.8

(59.1%)

Gross Profit

910.3

946.2

(3.8%)

1,857.5

1,859.8

(0.1%)

Gross Profit Margin, %

22.8%

23.5%

 

23.6%

23.6%

 

In Q2 and H1 2012, X5’s net sales in RUR terms increased y-o-y by 9.8% and 6.9%, respectively, primarily due to organic expansion of new stores and selling space. Net sales reported in USD for the same periods decreased by 0.8% and 0.1%, respectively, due to exchange rate differences between the RUR, X5’s operational currency, and the USD, the Company’s presentation currency.

In Q2 2012, gross profit margin totaled 22.8%, a 70 basis point (bp) decrease compared to Q2 2011 primarily due to an increase in logistics’ expense related to start-up costs for direct imports and opening of a new distribution center as well as shrinkage associated with the seasonal peak in supplies of fruits and vegetables and the effect of inventory clean-up at our warehouses.

The gross margin in H1 2012 amounted to 23.6% and was in line with the gross margin in H1 2011, primarily due to a trade-off between working capital and margins in Q1 2012, which offset the increase in logistics’ expense in Q2 2012.