Page 163 - RusRPTApr21

4Q20 IFRS review. The previously reported top line growth of 12.7% y/y in 4Q20 was down from 15.3% y/y in 3Q20, with the latter supported by lower outbound tourism and higher domestic consumption. The gross margin was down 1.3pp q/q and 8bp y/y in 4Q20 to 23.8%, driven by the decrease in the commercial margin. The latter occurred on the back of price investments in October-November 2020, while promo activity and investments normalised in December. SG&A (excluding rent), as a percentage of sales, was up 90bp q/q and 80bp y/y, due to extra payments for retail personnel, growing staff costs, increased marketing expenses and additional sanitary costs related to COVID-19.
This dragged the EBITDA margin down 180bp q/q to 6.2%, 3-6pp below our and the consensus estimates. The net margin (0.5%) came materially short of our estimates, as tax expenses surged 37% y/y on the back of the interim dividends (RUB20bn) distributed in December 2020.
Record high cash flow. The strong operating results pushed NOCF up 27% y/y to RUB102bn, with total capex at RUB90bn. Thus, FCF of RUB12bn in 2020 had a 2% yield. Leverage amounted to 1.7x net debt/EBITDA as of YE20, comparable y/y. This financial position meant the BoD was able to recommend dividends of RUB110.49/GDR (RUB30bn), implying a 4% yield. Thus, the total distribution for 2020 stood at RUB50bn (RUB184.13/GDR), returning an annualised yield of 7%, in line with our model.
The Obuv Rossii Group reported a 25% y/y drop in its February revenue vs. an 18% y/y drop in January. The decline was led by the 35% y/y drop in revenue from the westfalika.ru trading platform (its retail division), which comprises sales of its own brands and the marketplace. Marketplace revenue accounted for 42% of retail revenue in February (vs. c. 9% a year ago) and mitigated the drop in sales of its own brands. The wholesale segment declined 8% y/y in February, as demand from franchise stores has not fully recovered from COVID-19. Revenue from cash loans fell c. 12%, while the cash loan portfolio stood at c. RUB2.9bn in February, which is in line with the level seen at YE20.
Obuv Rossii revenue fell 21% y/y in 2020, which is broadly in line with what was reported in the company’s quarterly trading updates. The company’s retail business was the main drag on revenue in 2020 (-34% y/y) due to COVID-19-related restrictions on non-food stores. The wholesale segment also showed a significant decline (-25% y/y), reflecting the weakness of franchise stores. The 27% y/y growth in the cash loans business could not offset the poor dynamics in the other two segments. The gross margin grew 2.7ppts y/y to 57.8% in 2020, which we attribute to the wholesale segment’s lower share, the increased share of the company’s higher-margin cash loans
163 RUSSIA Country Report April 2021 www.intellinews.com