Russian food retailer X5 Retail Group’s revenues rose by 27.8% to RUB1,033,667 mln in 2016 – the fastest growth rate since 2011. Adjusted EBITDA rose by 33.8% to RUB79,519 mln and net profits of RUB22,291 mln were up 57.3% on last time.
Like-for-like sales increased by 7.7% with an improvement across all three of the company’s major formats. The company added a record 2,167 new stores in 2016 compared with 1,537 new stores in 2015. Pyaterochka was the main driver of growth: net retail sales rose by 32.5% y-o-y (9.1% growth in LFL sales and 23.4% growth from a 37.4% y-o-y increase in selling space).
Chief executive Igor Shekhterman said: “We have achieved all of the targets set out by the supervisory board and company management in 2016. We are creating value for stakeholders as the fastest-growing public player in Russia’s food retail market, building a stable and sustainable business that aims to benefit consumers, employees, partners and investors over the long term. As of Q4 2016, X5 is Russia’s #1 food retailer, with a market share of 8.0% for 2016. Revenue grew by 27.8% year-on-year and exceeded RUB 1 trillion, driven by a 7.7% increase in like-for-like (LFL) sales and a 20.1% contribution from a 29.1% rise in selling space. In 2016, we also demonstrated our ability to deliver efficient and sustainable expansion, with the adjusted EBITDA margin improving to 7.7%, up from 7.3% in 2015”.
“Looking ahead to 2017, while we do not expect meaningful positive macroeconomic developments in Russia in the medium term, significant growth opportunities still exist in the food retail sector. We remain confident about X5’s potential to deliver sustainable growth as Russia’s leading food retailer, driven by market expansion and market penetration. We are now focused on achieving our target market share of 15% by the end of 2020, which will require continued strong performance during the coming years. Our focus will remain on organic growth while maintaining margins as we develop all three of our major formats.”