Page 6 - BELRptMar19

2.1 Supermarket chain Eurotorg strong 2018 results, mulls second attempt at IPO
Belarus’s leading supermarket chain Eurotorg Holding reports strong results 2018, mulls second attempt at an IPO in 2019
The largest food retailer in Belarus, Eurotorg (aka Euroopt) released its unaudited operating results for the last quarter of 2018 and full year ended 31 December 2018 in a press release on February 11.
Retail is developing quickly in Belarus as a middle class starts to emerge . Eurotorg attempted to IPO in 2018 , but called off the float at the last minute due to poor market conditions. bne IntelliNews s ources close to the company say the chain is contemplating a second attempt in 2019 if market conditions improve.
In 4Q18 net retail sales increased by 14.6% year-on-year to BYN1,087mn ($503mn), with net retail sales in dollar terms increased by 7.3% y/y to $511mn. In the full year 2018 net retail sales increased by 14.2% y/y to BYN4,074mn ($1,89bn), with net retail sales in dollar terms increasing by 8.3% y/y to $2bn.
As of 31 December 2018, the company operated 862 stores with total selling space of 337,500 sqm.
The company also operated 762 grocery stores with total selling space of 320,100 sqm. In 4Q18 Eurotorg added 85 net new grocery stores with 14,200 sqm of selling space. In 2018 the Company added 262 net new grocery stores with 41,700 sqm of selling space.
In 4Q18 the company further expanded its regional presence, entering 46 new localities across Belarus (297 localities covered as of 31 December 2018). In 2018 Eurotorg entered 154 new localities across Belarus.
Positive like-for-like (LFL) sales growth of 2.8% in 2018 was driven primarily by growth of the LFL average ticket (5.6%), which was partly offset by a moderate decrease in LFL traffic (-2.6%).
LFL sales decreased by -3.4% in 4Q18. Negative LFL traffic of -8.2% was partly compensated by consistent growth of 5.2% in the LFL average ticket, in line with food inflation (5.1%). Some of the decrease in LFL traffic was due to the conversion of soft discounter stores under the Brusnichka banner back into Euroopt stores, which put some pressure on customer traffic but is expected to have a positive impact on gross margin performance.
As of 31 December 2018, the Company operated 100 pharmacies under the Magia brand with total selling space of 17.300 sqm. In 4Q18 net retail sales of the pharmacy business reached BYN13.3mn ($6.2mn).
On a combined basis, the Company’s two online grocery services (E-dostavka.by and Gipermall.by) generated 1mn orders and revenue of BYN53.9mn ($25.3mn) in 4Q18. The expansion of the e-commerce businesses continued to accelerate, with online sales growth of 34.2% y/y in
6 BELARUS Country Report March 2019 www.intellinews.com