Fix Price announces key operating and financial results for Q2 and H1 2023

7 September 2023, Limassol, Cyprus – Fix Price Group PLC (LSE and MOEX: FIXP, “Fix Price”, the “Company” or the “Group”), one of the leading variety value retailers globally and the largest in Russia, today announces its operating and auditor-reviewed IFRS financial results for the six months ended 30 June 2023 (H1 2023).

Operating summary for Q2 2023

• Revenue grew by 0.9% y-o-y to RUB 69.8 billion

• Retail revenue reached RUB 62.0 billion, up 1.1% y-o-y
• Wholesale revenue stood at RUB 7.8 billion, down 0.8% y-o-y

• LFL sales[1] were 7.9% lower y-o-y amid continued macroeconomic headwinds coupled with the high base effect from last year
• For the quarter, the Company opened 191 net new stores (including 25 franchises); the total number of stores reached 6,039
• The total selling space of Company-operated stores increased by 41.9 thous. sqm (+15.0% y-o-y) to 1,308.2 thous. sqm
• During the quarter, 0.9 million new members[2] joined the loyalty programme, bringing the total number of registered cardholders to 24.0 million (+25.4% y-o-y). Loyalty card transactions as a percentage of retail sales increased by 10.3 pps y-o-y and reached 62.5%. The average ticket for purchases with a loyalty card was 1.9x higher than the average ticket for non-loyalty-card purchases

Operating and financial summary for H1 2023

• Revenue was up 3.0% y-o-y and stood at RUB 135.7 billion

• Retail revenue reached RUB 120.1 billion, up 2.9% y-o-y
• Wholesale revenue grew by 3.3% y-o-y and stood at RUB 15.6 billion

• LFL sales were down 6.6%

• During the past six months, 376 stores were opened on a net basis, including 333 Company-operated stores and 43 franchise outlets, which is in line with store opening guidance for 2023

• In H1 2023 the total selling space of the store network grew by 82.8 thous. sqm to 1,308.2 thous. sqm
• The total number of registered loyalty cardholders grew by 2.2 million to 24.0 million, with penetration in retail sales reaching 62.9%
• Gross profit increased by 3.8% y-o-y to RUB 45.1 billion. Gross margin was up 29 bps y-o-y to 33.3%
• SG&A costs (excl. LTIP expense[3] and D&A) as a percentage of revenue totalled 15.7%, compared to 13.8% a year ago, driven by increased staff costs amid the negative operational leverage effect and high labour market competition
• Adjusted EBITDA[4] under IFRS 16 stood at RUB 24.1 billion. Adjusted EBITDA margin was 17.8%
• EBITDA under IFRS 16 was RUB 23.6 billion, with an EBITDA margin of 17.4%, reflecting strong gross margin dynamics offset by pressure on SG&A (excl. LTIP and D&A) costs
• Operating profit amounted to RUB 16.3 billion, while operating margin was 12.0%, compared with 14.9% in H1 2022
• Profit for the period grew by 286.0% to RUB 19.6 billion. Net profit margin improved to 14.5%, versus 3.9% in H1 2022
• CAPEX as a percentage of revenue decreased to 2.5% for H1 2023 from 2.8% for H1 2022 due to the completion of the active phase of the construction of distribution centres which had started in 2022

“Since our Company was founded, we have been committed to building an efficient, profitable and scalable business. Sixteen years later, Fix Price is the undisputed leading variety value retailer in Russia, a company with strong purchasing power, a reliable logistics platform to ensure uninterrupted supplies and support network growth, as well as advanced IT systems. All this combined with a flexible business model, low debt and a net cash position gives us a large safety margin at various stages of economic cycles.

“While subdued consumer sentiment and the effect of last year’s high base weighed on second-quarter revenue trends and like-for-like sales, our fundamentals remained strong. Our stores’ profit margins and return on investment are among the highest in the industry.

“We continued our brisk expansion in the first half of the year, enlarging our network with the addition of 376 new stores, and we are confident that we will reach our annual target of 750 net openings in 2023. In the spring of this year, the independent agency Infoline reiterated that the variety value retail market in Russia and neighbouring countries, where Fix Price is the absolute leader, has the capacity to sustain about 18,600 stores, which suggests a more than threefold increase in our network.

“In the second quarter, we continued our international expansion with the opening of the first Fix Price stores in Armenia through our franchise programme. We see considerable potential to expand our brand in this promising market. Earlier this year, we began operations in Mongolia with the opening of two stores in Ulaanbaatar. Thus, we have expanded our brand presence to nine countries since the beginning of 2023. We are also currently working to launch our stores in the United Arab Emirates, and we hope that the first Fix Price stores in the region will open their doors to customers next year.

“Alongside rapid growth, taking care of customer needs remains our priority. Our team carefully monitors changing consumer preferences, expands our supplier base and regularly rotates our product range to ensure that we have everything customers need at the best possible price.

“I would like to thank the entire Fix Price team for their dedication to creating a better shopping experience during these challenging times. I believe that the initiatives we are implementing will bring about important long-term benefits for our customers, shareholders, employees and society as a whole.”

Dmitry Kirsanov, Fix Price CEO