Page 7 - BELRptMar19

4Q18. Online grocery retail accounted for 5% of total net retail sales during the quarter.
Strategic highlights for 4Q18
● Eurotorg continued its expansion with 118 new stores added in 4Q18.
● In 4Q18 the Company opened 85 grocery stores, bringing the total number of grocery stores to 762 as of 31 December 2018. The key focus remained on developing smaller formats: the average selling space of grocery stores opened in 4Q18 was 167 sqm. Almost all of the new added stores (82 out of 85) were opened in leased premises, in line with the Company’s strategy of asset-light expansion.
● The Magia pharmacy chain also accelerated its growth, with 33 new stores openings in 4Q18. The total number of Magia stores stood at 100 as of 31 December 2018.
● In line with its strategic focus on deleveraging Eurotorg significantly reduced its net debt by $37mn in 4Q18 (from $538mn as of 30 September 2018 to $501mn as of 31 December 2018) resulting in overall net debt decrease of $103mn in FY 2018 (from $604mn as of 31 December 2017 to $501mn as of 31 December 2018).
● In 4Q18 S&P Global Ratings and Fitch Ratings confirmed positive trends in Eurotorg’s credit profile following the Company’s strong results and improved credit metrics in 1H 2018. Fitch upgraded Eurotorg’s Long-Term Issuer Default Rating to ‘B’ from ‘B-’, with Stable outlook. S&P Global Ratings raised the outlook on Eurotorg’s long- and short-term credit ratings to Positive and affirmed the Company’s long-term credit rating at ‘B-’.
Eurotorg CEO Andrei Zubkou said: “The fourth quarter of 2018 capped off another strong year of operational growth for Eurotorg. In 2018 net retail sales rose by 14.2% in BYN terms and reached the $2bn mark.
“We continued our store expansion programme, rolling out more than 360 grocery and pharmacy stores and entering over 150 new localities in Belarus in 2018. As of the end of the year Eurotorg operated a total of 862 stores, an increase of more than 70% year-on-year.
“Our online and pharmacy businesses are demonstrating robust growth. In the fourth quarter of the year our e-commerce businesses, E-dostavka and Gipermall, accounted for 5% of total net retail sales, putting Eurotorg among the leading companies in Central and Eastern Europe on this indicator. We are continuing to invest in developing our capabilities in this highly promising and fast-growing area. Our pharmacy chain, Magia, reached a landmark of 100 stores as of the end of the year, and in less than one year has become the third largest player on the pharmacy market in Belarus.
“In 2018 we achieved significant results in our strategic objective of reducing both our overall leverage and the share of foreign-currency debt in the total debt portfolio. Net debt decreased by $103mn during the year and stood at $501mn as of 31 December 2018. The share of local-currency debt in the loan portfolio has more than doubled, and stood at 37% at the end of the year. We were pleased that our strong operational track record and continued
7 BELARUS Country Report March 2019 www.intellinews.com