Russian retailer X5 Retail Group has reported a 14.1% year-on-year growth in revenue, to RUB1,978 billion (€22.5 billion), in full-year 2020 from RUB1,734 billion (€19.7 billion) in 2019.
Net retail sales grew by 14.2% year-on-year, driven by a 5.5% increase in like-for-like (LFL) sales and an 8.7% sales growth from an 8.3% rise in selling space.
The company’s gross profit margin under IFRS 16 increased by seven basis points year-on-year to 25.0%, driven predominantly by a reduction of shrinkage resulting from operating improvements.
The company’s EBITDA margin increased by 12 basis points to 12.3%, while EBITDA amounted to RUB243.6 billion (+15.2% year-on-year)
Chief executive officer of X5 Retail Group, Igor Shekhterman, said, “We delivered growth and margins in line with our strategic targets in 2020, despite the challenges presented by the COVID-19 pandemic, by quickly and efficiently adapting our logistics and store operations to the rapidly-emerging challenges.
“We maintained smooth operations during periods of peak demand, implemented safety procedures to protect customers and employees, and worked together with our main competitors to ensure key food staples remain accessible to the widest circle of the Russian population.”
Pyaterochka, the company’s proximity store banner, was the main driver of growth in 2020, with net retail sales growth of 16.9%.
This performance was driven by a 6.9% increase in LFL sales and a 10.0% contribution to sales growth from a 9.5% expansion in selling space, the retailer added.
The banner’s LFL traffic decreased by 4.6% during the financial year, while LFL basket size grew by 12.1% due to changes in customer behaviour following the COVID-19 pandemic.
Perekrestok’s net sales, excluding the online hypermarket Perekrestok Vprok, increased by 12.7% in 2020, driven chiefly by selling space expansion and a slower-than-expected recovery in shopping malls after lockdown restrictions were lifted.
The Karusel chain saw a 36.3% decline in net retail sales, driven by downsizing as part of the format’s transformation programme as well as the pandemic.
Net sales in the company’s digital businesses increased 362.2% year-on-year to RUB20.1 million from RUB4.3 million in 2019.
Perekrestok Vprok contributed RUB13.3 billion to this total, with a 207.9% jump in sales.
X5 emerged on top of the Russian online food retail segment in 2020 with a gross merchandise value (GMV) of RUB21.9 billion (€240 million).
'Resilient Business Processes'
Shekhterman explained, “X5 was fortunate to enter into 2020 having already made significant progress on its digital transformation and with resilient business processes in place.
"We made good progress on all key strategic initiatives, rolling out big data-driven products for our business that are helping to improve the efficiency of our operations, accuracy of decision-making and, most importantly, our ability to meet fast-changing customer demand.”
He added that X5 entered 2021 on a “strong footing” as the leader in both online and offline grocery in Russia.
In February of this year, GMV from express delivery of Pyaterochka and Perekrestok stores and the Okolo delivery aggregator amounted to RUB2.1 billion, while the number of orders exceeded 1.3 million.