X5 Retail Regulatory News (FIVE)

18 Apr 2007 07:01

X5 Retail Group N.V.18 April 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN X5 RETAIL GROUP N.V. ANNOUNCES AUDITED FY 2006 RESULTS GROUP PRO FORMA NET SALES OF US $3,551 MILLION, UP +50% VS. 2005 GROUP PRO FORMA GROSS MARGIN OF 27.9% VS. 25.4% IN 2005 GROUP PRO FORMA NORMALIZED EBITDA OF US $ 360 MILLION, UP +56% (1) VS. 2005 Amsterdam, 18 April 2007 - X5 Retail Group N.V., Russia's largest food retailerin terms of sales, is pleased today to present a strong set of audited financialresults for the full year of 2006. Following the merger of Pyaterochka and Perekrestok, the Group has issued itsfirst annual IFRS consolidated financial statements for the financial year 2006which are generally in line with the Management accounts reported on 1 March2007: - On a pro forma basis, net sales increased by 49,6% to US$3,551 million, which represents a significant acceleration of growth in comparison to 34% in FY 2005. - Gross profit margin increased from 25.4% to 27.9%, thereby generating gross profit growth of 63.8%. - Pro forma EBITDA increased by 21% to US$ 295 million, which translates in 55,9% increase in case the effect of the Tushino Plaza capital gain in 2005 and ESOP restructuring costs in 2006 are excluded. - Pro forma Net profit reached US$ 103 million, up 1.2% vs 20052.. Audited results vs. Management accounts Under IFRS for the purposes of preparation of pro-forma income statement, fullyear results should be taken for all acquired subsidiaries. Previously reportedfinancial results were based on the Management accounts and included results ofMerkado chain operations for November-December 2006 only. Summary of differences in approaches is as follows: IFRS Pro-Forma IFRS Consolidated Management accounts Pro-FormaPerekrestok From 1 Jan 2006 - From 1 Jan 2006 - From 1 Jan 2006 - until 31 Dec 2006 until 31 Dec 2006 until 31 Dec 2006 Pyaterochka From 1 Jan 2006 - From 19 May 2006 - From 1 Jan 2006 - until 31 Dec 2006 until 31 Dec 2006 until 31 Dec 2006 Merkado From 1 Nov 2006 - From 1 Nov 2006 - From 1 Nov 2006 - until 31 Dec 2006 until 31 Dec 2006 until 31 Dec 2006 Audited IFRS pro-forma income statement includes full year 2006 financialresults of Merkado operations. This resulted in increased net sales (from US$3,485 million to US$ 3,551 million), gross profit (from US$ 972.2 million to US$989.5 million), operating expenses (from US$ 530.3 million to US$ 548.8million), EBITDAR1 (from US$ 445.8 million to US$ 446.8 million) and net rentalexpenses (from US$ 85.8 to US$ 86.8 million). Absolute level of EBITDA has notchanged, while EBITDA margin slightly compressed (from 8.5% to 8.3%) due toincrease in sales volume. Quotes Vitaliy Podolskiy, Group CFO: "It is the first time after the merger the Group issued audited annual IFRSconsolidated financial statements. Strong financial results for the year of 2006show that our integration efforts started in May 2006 translated into the firstbenefits from combined operations, and we are looking with optimism intorealization of our longer term strategic objectives." 12M2006 Financial Highlights Pro Forma X5 Retail Group N.V. • Net Sales of US $3,551 million; up 49.6% vs. 12M 2005 • Gross profit of US $990 million, up 63.8% vs. 12M 2005; Gross margin of 27.9% vs. 25.4% 12M 2005 • EBITDA of US $295 million, up 31.0% vs. 12M 2005; EBITDA margin of 8.3% vs. 9.5% 12M 2005(2) Pyaterochka chain stand-alone • Net Sales of US $1,973 million; up 45.2% vs. 12M 2005 • Gross profit of US $529 million, up 56.2% vs. 12M 2005; Gross margin of 26.8% vs. 24.9% 12M 2005 • EBITDA of US $178 million, up 9.1% vs. 12M 2005; EBITDA margin of 9.0% vs. 12.0% 12M 2005 Perekrestok chain stand-alone • Net Sales of US$1,496 million; up 47.4% vs. 12M 2005 • Gross profit of US $438 million, up 64.9% vs. 12M 2005; Gross margin of 29.3% vs. 26.2% 12M 2005 • EBITDA of US $119 million, up 90.9% vs. 12M 2005; EBITDA margin of 8.0% vs. 6.1% 12M 2005 2 Note to Editors: X5 Retail Group N.V. is Russia's largest food retailer in terms of sales. As of31 March 2007, the Group had 512 company-managed "Pyaterochka" soft discountstores located in the Moscow (232), St. Petersburg (215) and other Russian areas(65), and 169 company-managed "Perekrestok" supermarkets across Central Russiaand Ukraine, including 99 stores in Moscow. As of 31 March 2007, franchisees operated 533 Pyaterochka branded stores acrossRussia and Kazakhstan. Perekrestok had 10 stores operated by franchisees in theMoscow area. Pyaterochka and Perekrestok have merged their operations as of 18 May 2006 tocreate the clear leader in the Russian food retail market. The Group's audited pro forma net sales for the FY 2006 were US $3,551 million,up +50% vs. 2005. Pyaterochka chain provided US $1,973 million of net sales, thePerekrestok chain contributed US $1,496 million of net sales, and Merkado chaincontributed US $ 82 million. Forward looking statements: This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identifiedby the fact that they do not only relate to historical or current events.Forward-looking statements often use words such as" anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal" believe", or otherwords of similar meaning. By their nature, forward-looking statements involve risk and uncertainty becausethey relate to future events and circumstances, a number of which are beyond X5Retail Group N.V.'s control. As a result, actual future results may differmaterially from the plans, goals and expectations set out in theseforward-looking statements. Any forward-looking statements made by or on behalf of X5 Retail Group N.V.speak only as at the date of this announcement. Save as required by anyapplicable laws or regulations, X5 Retail Group N.V. undertakes no obligationpublicly to release the results of any revisions to any forward-lookingstatements in this document that may occur due to any change in its expectationsor to reflect events or circumstances after the date of this document. Enquiries to: X5 Retail Group N.V. Gennady Frolov Head of Corporate Communications Office +7-495 950-5577 ext. 10130 Mobile +7 495 998 3335 Email gennady.frolov@x5.ru -------------------------- 2 Excluding the capital gain of USD $18.7 million on the sale of Tushino Plaza in 2005 1 For comparability excluding the capital gain of USD $18.7 million on the sale of Tushino Plaza in 2005 and before ESOP restructuring charges in 2006 2 For comparability excluding the capital gain of USD $18.7 million on the sale of Tushino Plaza in 2005 This information is provided by RNS The company news service from the London Stock Exchange