Page 171 - RusRPTMay21

RUB255mn a year ago. This was in line with street estimates.
Cash flow and debt. The retailer reported negative OpCF of RUB4.9bn in 1Q21, which is typical for the first quarter (the retailer’s 1Q20 OpCF was negative RUB6.4bn). Capex almost tripled y/y to RUB945mn due to the advance payment of RUB688mn for the third federal DC in the Urals. ND/EBITDA fell to 1.4x as of 1Q21 vs. 1.1x as of YE20 and 1.7x a year ago.
FY21 and mid-term guidance remains unchanged. The retailer is still looking to open at least 230 core Detsky Mir supermarkets, 800 Detmir Pickups and 500 Zoozavr stores in the mid-term. For 2021, the retailer plans to open 70 flagship supermarkets, 100 Detmir Pickups and 70 Zoozavr stores. The EBITDA margin should remain in the double digits, as price investments should be mitigated by staff and rent savings. Capex should amount to RUB5.5bn, of which RUB2bn will be spent on the new federal DC and RUB1.5bn on the store rollout, while the remainder will be invested in IT and e-commerce.
Comments on current trading and 2Q21. Management refrained from giving any numerical details, although management did mention that they were pleased by the very high growth rates seen in April. That said, the EBITDA margin could decline y/y in 2Q21 due to the high base y/y (the EBITDA margin reached 12.2% in 2Q20 thanks to pronounced savings on payroll and rent).
Detsky Mir published a trading update for 1Q21 on April 15. Revenues rose 14.9% y/y to R35.7bn, the growth edging up slightly from the 14.4% reported in 4Q20. LFL sales were up 7.9% y/y amid a 3.2% uptick in traffic and 4.5% growth in the ticket. Traffic was supported by the ramping up of stores that had opened in 2020. Online sales in Russia expanded 78.2% y/y to R10.8bn and more than tripled in Kazakhstan to R115mn. In fact, the higher online revenues can explain almost the entire y/y increase in revenues. The company also launched its marketplace, which generated R0.4bn GMV in 1Q21. The retailer opened 12 stores on a net basis in 1Q21, including six in the smaller Detmir.ru format and one Zoozavr pet store, taking the total store count to 880. Selling space increased to 902,000 m2 as of end-1Q21, up 6.5% y/y.
X5 Retail Group has released decent 1Q21 IFRS numbers as the slowdown in revenues from the elevated base and easing operating leverage were offset by lower price investments and cost control.
EBITDA met our estimates, with the EBITDA margin flat y/y at 6.9%. The gross margin gained 140bp q/q, mostly on the reduced promos (from close to 40% of sales to lower than 35%, on our estimates) while the y/y advance of 90bp was also supported by some savings in
171 RUSSIA Country Report May 2021 www.intellinews.com