Fix Price Group PLC: Fix Price announces key operating and financial results for Q1 2024

26 April 2024, Limassol, Cyprus – Fix Price Group PLC (LSE and MOEX: FIXP, AIX: FIXP.Y, “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 IFRS financial results based on management accounts for the first quarter (Q1 2024) ended 31 March 2024.

Operating AND FINANCIAL summary for Q1 2024

• Revenue grew by 8.8% y-o-y and reached RUB 71.7 billion

• Retail revenue increased by 9.0% to RUB 63.3 billion
• Wholesale revenue was RUB 8.3 billion, up 6.9% y-o-y

• LFL sales[1] dynamics turned positive increasing 0.4% y-o-y on the back of LFL average ticket growth coupled with gradually recovering LFL traffic. Macroeconomic headwinds continue to put pressure on consumer demand, however, LFL sales growth kept improving in Q2 and exceeded 2% for the first 24 days of April 2024
• During the reporting period, the Company opened 131 net new stores (including 6 franchise stores). As of 31 March 2024, Fix Price was operating a total of 6,545 stores
• In Q1 2024, 28.5 thous. sqm were added to the Company’s total selling space, which reached 1,419.1 thous. sqm (+12.1% y-o-y) as of the end of the quarter
• The total number of registered cardholders grew by 3.4 million[2] over the last 12 months to 26.4 million (14.6% increase y-o-y), with loyalty-card transactions accounting for 61.0% of retail sales. The average ticket for purchases made using a loyalty card was about 80% higher than the average ticket for non-loyalty-card purchases
• Gross profit was up 6.7% to RUB 23.4 billion supported by revenue growth. Gross margin stood at 32.7% on the back of an increase in cost of goods sold due to devaluation of the rouble and rising transportation costs, which were partially mitigated by a greater share of higher-margin non-food items in retail sales
• SG&A costs (excl. LTIP expense[3] and D&A) as a percentage of revenue was 19.0%, versus 16.2% in Q1 2023, due to growth in the shares of staff costs, advertising and other expenses coupled with the negative operating leverage effect. Pressure on the cost base was partially mitigated by efficiencies gained in rental expenses and security services as a percentage of revenue
• Adjusted EBITDA[4] under IFRS 16 amounted to RUB 10.0 billion on the back of pressure on gross margin and growth of SG&A costs. Adjusted EBITDA margin was 13.9%
• EBITDA under IFRS 16 amounted to RUB 9.8 billion. The EBITDA margin stood at 13.6%
• Fix Price recorded a net profit of RUB 3.3 billion for the period, with net profit margin at the level of 4.6%
• CAPEX as a percentage of revenue decreased to 1.9%, down from 3.2% in Q1 2023 due to the completion of construction of distribution centres (DCs) in 2023 as planned

“Since the beginning of 2024, we have noted signs of a recovery in consumer confidence, driving our LFL sales into positive territory. At the same time, amid high interest rates and inflation expectations, shoppers are still showing a preference for savings and large non-food purchases, limiting their spending on inexpensive items.

“Heightened competition in the labour market continues to put pressure on our margins, and recruiting and retaining line personnel remains the main challenge for the Company and for Russian retail as a whole. We expect this factor to affect our financial performance in the medium term. For our part, we remain committed to a conservative financial policy, maintaining high liquidity reserves and low leverage. We are incorporating digital solutions to improve our operational efficiency, including artificial intelligence–based products that enable us to automate business processes, reduce costs and increase our resilience to external challenges.

“In a challenging operating environment, we continue to take steps to bolster our long-standing leading position. During the reporting period, we surpassed the 6,500-store mark and began operating in 29 new communities, where Fix Price’s arrival was a long-awaited event for local residents. I would also like to note the expansion of our international presence: in Q1 2024, the share of international markets increased y-o-y to 10.3% of our total number of stores.

“We are constantly focused on analysing trends in consumer preferences and searching for intriguing new products for our customers. During the reporting period, we observed a gradual recovery in demand for items in non-food categories, with kitchenware, DIY as well as party and celebration products leading the way.

“Our loyalty programme continues to offer tangible benefits to members, and their number increased by 15% over the past year, reaching 26.4 million by the end of March 2024. The average ticket of loyalty cardholders continues to be nearly double that of other shoppers, an indication of the programme’s success.

“I am pleased to see that our team’s efforts were reflected in the high rating that we received in a recent study by the independent research company Romir. According to this research, we have consistently been among the top three retail chains in Russia in terms of trust and visibility, and 2024 was no exception.

I would like to thank all of the Group’s employees who have played a part in creating a quality customer experience, and I have no doubt that together we will be able to achieve our most ambitious goals and ensure long-term growth in the value of our business.”

Dmitry Kirsanov, Fix Price CEO