Page 110 - RusRPTFeb22

three months. If the buyback is executed in full, the free float would reach 18.5% (down from 19.3% prior to the announcement).
9.2.5 Retail corporate news
• X5 Group
X5 Retail Group has announced the appointment of Vladislav Kurbatov to the position of CEO of the convenience format Pyaterochka. He moves from the being CEO of Perekrestok, X5 Group’s supermarket business, and has been with the company since 2015. Previous CEO Sergei Goncharov leaves the company. The Perekrestok CEO will be Vladimir Sadovin, who joined X5 as a strategic marketing director last year, and previously led Azbuka Vkusa, a supermarket chain, from 2004 until 2018.
X5 Retail Group has released robust 4Q21 operating results.
Revenues grew 14.9% y/y to RUB605bn (3% ahead of our model), while LFL accelerated 4.2pp q/q to 9.0%, mostly reflecting the pick-up in food CPI (10.8% in 4Q21) and incremental support for the proximity format during the October-November lockdowns. Management’s profitability guidance means that we factor a 6.5% EBITDA margin for 4Q21F and 7.3% for 2021F, for a flattish y/y performance. We consider the results as taking a back seat to the recent CEO change in the core proximity format and await more aggressive development pillars. Our fine-tuned model sees generally unchanged forecasts, as the more rapid top line growth is offset by softer profitability. X5’s GDRs have lost 40% in the last twelve months (one of the weakest sectoral results). The stock trades on 2022F EV/EBITDA of 4.5x and P/E of 9.7x, and offers a 12.7% dividend yield, sufficient for a rerating upon more stable macro. We reiterate our 12-mo TP of $40 (84% ETR) and Buy recommendation.
4Q21 trading update. The growth rate accelerated 3.3pp q/q to 14.9% in 4Q21, which is the highest figure in five quarters. We note the upbeat trends in the LFL breakdown (ticket up 7.3% y/y; traffic inflow of 1.5% y/y) that reflect higher food inflation, support for the proximity format during lockdown, and favourable comparison base. Management said that this revenue growth was sustainable in January 2022. The proximity format was the key driver, with sales growth of 16.0% y/y, while supermarkets underperformed (8.6% y/y), pressured by restrictions and lower traffic in malls. Digital assets doubled revenues y/y to RUB16.2bn in 4Q21, or 2.7% of X5’s total.
4Q21F IFRS preview and forecast revision. Management has guided for margins to be at least flat y/y for 2021 and 4Q21. The plan is
110 RUSSIA Country Report February 2022 www.intellinews.com