Page 134 - RusRPTNov20

y/y) and prices (+9% y/y) leading to an 18% y/y growth in new contract sales in 3Q20. The share of mortgage sales increased to a record 72% in 3Q20 vs. 48% a year ago. On a less positive note, the company’s building materials business in 3Q20 turned in a weaker performance despite the positive industry backdrop, with sales of sand plunging 31% y/y and sales of ready-mix concrete falling 23% y/y. Sales of other materials showed less significant y/y declines last quarter.
9.2.5​ Retail corporate news
X5 Retail Group​ presents new businesses to support growth, dividends +50%.
X5 Retail presented a strategy update at its online CMD. The main priorities of the strategy have been developed and now include further growth of market share, development of new projects, work on customer experience, the introduction of a new hard discounter and the realization of digital transformation. This all may enhance X5’s financials and provide a higher return for shareholders – +50% in dividends expected for 2020.
The strategy contains new projects and a complex set of targets and ways to execute them based on current trends. Investors should be satisfied with the measured costs and returns, which should drive higher dividends.
The retail market will continue to grow and consolidate around the largest players. Continued shift to modern retail and market consolidation will be the key sources for growth for the top players
X5’s market share was 11.5% in 2019 and should reach 20% in 2029. Up to 50% of revenue is generated through digital channels, including personalized promo through CVM. Up to 20% of revenue is from new businesses (online, 5POST, logistics services, food delivery and other new businesses to be launched)
Retail Food Market’s CAGR 2019-29e is expected at 5.6%, or RUB12.9 trillion growth to RUB30.6 trillion in 2029. Offline food retail may reduce its share, while online food retail may increase its share from 0.2% to 7% in 2029
Strategy priorities are boosting market share, the adoption of new concepts, quick reaction to customer feedback, to become #1 ready-to-eat, healthy assortment, private labels, improve efficiency and implement digitalization
New format Hard discounter ‘Chizhik’ presented: low-mid price segment with primary food offer on 200-250 sqm and with 60% in private labels
134 ​RUSSIA Country Report​ November 2020 www.intellinews.com