O'KEY GROUP REPORTS 10.1% REVENUE GROWTH IN Q3 2021

O'KEY Group S.A. (OKEY)
O'KEY GROUP REPORTS 10.1% REVENUE GROWTH IN Q3 2021

28-Oct-2021 / 08:45 CET/CEST
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Press release
28 October 2021

O'KEY Group S.A. (LSE, MOEX: OKEY, the "Group" or the "Company"), one of Russia's leading food retailers, has announced its unaudited operating results for the third quarter (Q3) and the first nine months (9M) of 2021.

All materials published by the Group are available at www.okeygroup.lu.

Q3 2021 operating highlights

Group net retail revenue[1] grew by 10.1% YoY to RUB 43,451 mln.
The Group like-for-like (LFL) net retail revenue increased by 6.6% YoY, driven by both hypermarkets' and discounters' performance.
O'KEY hypermarkets' net retail revenue rose by 4.6% YoY to RUB 34,777 mln, led mainly by a 3.8% YoY LFL revenue growth.
DA! discounters' net retail revenue showed a 40.0% YoY increase to RUB 8,673 mln, driven by a 21.6% LFL revenue growth and a 21.4% YoY selling space expansion.
DA! discounters' share in the Group's revenue rose by 4.3 pps YoY to 20.0%.
Total online sales showed a 139.8% YoY growth to RUB 1,096 mln and reached 3.2% of O'KEY's revenue.

9M 2021 operating highlights

Group net retail revenue increased by 5.9% YoY to RUB 131,149 mln.
O'KEY hypermarkets' net retail revenue grew by 1.8% YoY to RUB 106,839 mln.
DA! discounters' net retail revenue rose by 29.2% YoY to RUB 24,310 mln.
Total online sales grew by 90.3% YoY to RUB 3,190 mln and accounted for 3.0% of O'KEY's revenue.

Armin Burger, Chief Executive Officer at O'KEY Group, commented:

"The Group reported strong operational results in both the hypermarket and discounter businesses in Q3 2021. O'KEY hypermarkets showed a 3.8% like-for-like revenue growth in Q3 2021, a speed-up compared to the Q2 2021 results. We are very pleased with the O'KEY performance, especially given the challenging comparable period of Q3 2020 that saw the easing of the pandemic-related lockdown and start of recovery in customer traffic. O'KEY continuously works to enhance its competitive edge and boost the efficiency of selling space use. We also keep redesigning our hypermarkets and are going to reopen under the new concept two stores in St Petersburg, as well as relaunch a newly acquired hypermarket in Moscow in Q4 2021.

"DA! discounters also demonstrated accelerated growth compared to Q2 2021 and delivered an impressive 40.0% YoY revenue increase, with 21.6% LFL performance in Q3 2021. Remarkably, DA! achieved these results on top of the chain's 45.7% YoY revenue growth and 26.8% LFL growth in the comparable Q3 2020. DA! continues to be one of the fastest-growing grocery retailers in the country. The share of DA! in the Group's revenue reached 20% in Q3 2021. As we communicated earlier, we plan to open 35-40 discounters this year and speed up our expansion starting next year. We expect the discounters' share in the Group's revenue to reach up to 50% in the medium term.

"In Q3 2021, the Group's total online sales more than doubled YoY to account for 3.2% of O'KEY's revenue.

"We confirm our previously announced guidance for 2021, expecting a low-single-digit LFL growth at O'KEY hypermarkets and a double-digit LFL growth at DA! discounters."

Operating review

Group Net Retail Revenue in Q3 and 9M 2021

Net Retail Revenue, RUB mln (excl. VAT)	Q3 2021	Q3 2020	YoY, %	9M 2021	9M 2020	YoY, %
O'KEY Group	43,451	39,462	10.1%	131,149	123,794	5.9%
O'KEY hypermarkets	34,777	33,260	4.6%	106,839	104,973	1.8%
DA! discounters	8,673	6,202	40.0%	24,310	18,821	29.2%

Group Like-for-like Net Retail Revenue Performance in Q3 and 9M 2021

LFL Net Retail Revenue, %	Q3 2021 vs. Q3 2020			9M 2021 vs. 9M 2020
LFL Net Retail Revenue, %	Net retail revenue	Traffic	Average ticket	Net retail revenue	Traffic	Average ticket
O'KEY Group	6.6%	2.8%	3.7%	2.5%	2.2%	0.2%
O'KEY hypermarkets	3.8%	(0.0%)	3.9%	0.4%	(0.1%)	0.5%
DA! discounters	21.6%	10.4%	10.1%	13.7%	9.1%	4.6%

Note: Q3 2021 LFL metrics are calculated based on 76 O'KEY and 103 DA! stores.

Group Net Retail Revenue Monthly Metrics for Q3 2021

	Jul	Aug	Sept	Q3 2021	9M 2021
Net retail revenue, % YoY
O'KEY Group	8.5%	10.0%	12.0%	10.1%	5.9%
O'KEY hypermarkets	2.6%	4.4%	6.7%	4.6%	1.8%
DA! discounters	38.9%	40.2%	41.0%	40.0%	29.2%
Customer traffic, % YoY
O'KEY Group	11.1%	8.9%	5.6%	8.5%	7.4%
O'KEY hypermarkets	3.5%	1.2%	(1.7%)	1.0%	1.3%
DA! discounters	30.7%	29.5%	25.3%	28.6%	24.9%
Average ticket, % YoY
O'KEY Group	(2.4%)	1.0%	6.0%	1.4%	(1.4%)
O'KEY hypermarkets	(0.9%)	3.2%	8.6%	3.5%	0.5%
DA! discounters	6.3%	8.3%	12.5%	8.9%	3.4%

The Group's net retail revenue increased by 10.1% YoY to RUB 43,451 mln in Q3 2021 and by 5.9% YoY to RUB 131,149 mln in 9M 2021.

Net retail revenue at O'KEY hypermarkets grew by 4.6% YoY to RUB 34,777 mln in Q3 2021 and by 1.8% YoY to RUB 106,839 mln in 9M 2021. O'KEY's LFL revenue increased by 3.8% YoY in Q3 2021.

In 9M 2021, the Group continued with the transformation programme in the hypermarket chain. O'KEY's main priority is enhancing the competitiveness of the format by providing a balanced assortment with a focus on fresh and ultra-fresh products, quality of own brands, layout upgrades, and customer service. The share of fruits & vegetables, fresh and ultra-fresh categories in the hypermarkets' revenue was 54.9% in Q3 2021.

The Group also continued to optimise its private label portfolio and improve its quality and profitability. Own brands accounted for 8.0% of O'KEY's and 50.2% of the discounters' net retail revenue in Q3 2021.

DA! discounters net retail revenue grew by 40.0% YoY growth to RUB 8,673 mln in Q3 2021, and by 29.2% YoY to RUB 24,310 mln in 9M 2021. The discounters achieved a 21.6% YoY LFL revenue growth in 3Q 2021, and added 21.4% YoY in selling space as of the end of Q3 2021. DA! discounters' share in the Group's revenue increased by 4.3 pps YoY to 20.0% in Q3 2021.

In Q3 2021, the Group's total online sales rose by 139.8% YoY growth to RUB 1,096 mln and reached 3.2% of O'KEY's revenue. The Group continues to develop its own e-commerce platform, focusing on the key cities of Moscow and St.-Petersburg and collaborating with delivery operators across Russia.

Group Stores and Selling Space in Q3 2021

Stores and Selling Space	Q3 2021	Q3 2020	Net change	Change (%)
Number of stores, EoP	206	182	24	13.7%
O'KEY hypermarkets	77	77	-	-
DA! discounters	129	105	24	22.9%
Total selling space (sq m), EoP	604,956	591,352	13,604	2.3%
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