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Russia's O'Key Group Sees Revenue Up 5.6% In FY 2020

Published on Apr 1 2021 11:59 AM in Retail tagged: Russia / O'KEY / Da! / Annual Report

Russia's O'Key Group Sees Revenue Up 5.6% In FY 2020

Russian retailer O'Key Group has reported a 5.6% year-on-year growth in revenue to RUB174.3 billion (€1.95 billion) in its financial year 2020.

The group's gross profit increased by 5.4% to RUB39.3 billion (€440 million) with a gross margin of 22.5%.

EBITDA grew by 5.5% year-on-year to RUB14.8 billion (€170 million), and the EBITDA margin stood at 8.5%

'Solid Financial Results'

Armin Burger, O'Key Group CEO, commented, "In 2020, all sectors of the economy faced unprecedented instability and challenges. And I am all the more pleased to report the solid financial results delivered by O'Key Group over the year.

"Our business model based on clearly positioned and complementary formats – modern O'Key hypermarkets, DA! discounters, and a well-established e-commerce platform – enables us to cover all customer segments and leverage the synergies."

The O'Key retail chain saw a 0.8% growth in revenue to RUB148.4billion, driven by 2.5% like-for-like retail revenue growth.

Discount chain DA! reported a 45.2% jump in revenue to RUB26 billion compared to the previous year.

The company attributed this growth to a 27.8% like-for-like growth in revenue and selling space expansion.

The DA! chain delivered a positive EBITDA of RUB784 million from negative RUB215 million in 2019, driven by solid revenue performance and improved efficiency.

Main Growth Driver

Burger added, "DA! discounters remained the main driver for the group and once again showed excellent results. As expected, DA! broke even and delivered positive EBITDA in 2020.

"During the year, we opened 18 discounters net of closures in Moscow and the Moscow Region, which brought the total number of
stores to 118 and increased selling space by 16% year-on-year."

The retail group's operating profit grew by 2.8% year-on-year to RUB5.04 billion.

The net debt position improved slightly year-on-year to a 3.6x interest-bearing liabilities to EBITDA ratio, as of 31 December 2020, the company added.

Outlook

The company aims to deliver the best price-quality ratio in the market across all its formats and believes that the "right strategy in action" will allow it to capitalise on the opportunities in a changing market landscape.

Burger stated, "Being focused on our strategic goals, we will continue expanding the discounter business, and expect to open 30 to 40 new DA! stores in 2021, carefully selecting locations for every one of them.

"We expect that the share of discounters in the Group revenue will keep growing, thus supporting the Group's overall growth and increasing operational profitability." [Pic: ©shinobi34/123RF.COM]

© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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