Dixy leverages scale to boost margins

Dixy leverages scale to boost margins

Russian retailer Dixy has booked an increase in sales and profits during the first nine months of the year, boosted by space expansion and traffic driving activity.

The company said consolidated revenue rose by 23.3% in the nine-month period, climbing to RUB131.56bn (US$3.98bn).

Growth was driven by sales expansion at its neighbourhood market format, which benefited from promotional activity and other traffic driving measures. Space expansion also boosted sales. The company opened 168 new stores in the year-to-date, increasing selling space by 24% on the year.

The company was able to leverage its increased scale to obtain better commercial terms with suppliers, boosting margins. In the year-to-date Dixy achieved a 38.2% increase in operating profit, which climbed to RUB4.43bn. Net profit increased by 70.5% to RUB1.33bn thanks to a lower income taxe rate.

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DIXY Group (RTS, MICEX: DIXY) – one of Russia’s leading retailers of foods and everyday products – today announced unaudited IFRS results for the third quarter and the first nine months of 2013.

Key Highlights of the third quarter and the first nine months of 2013:

In the first nine months of 2013, the Company opened 168 stores on net basis. As of September 30, 2013, the Company operated 1,667 stores in Central, North-West and Urals Federal Districts.

The total Selling Space increased by 24% year-on-year to 574,180 sq.m. as of September 30, 2013.

Consolidated Revenue increased by 23.1% (20.2% in USD) year-on-year to RUR 44.2 bln (USD 1.3 bln) in the third quarter of 2013.

Consolidated Gross Profit grew by 28.6% (25.5% in USD) year-on-year to RUR 13.5 bln (USD 411.7 mln) in the third quarter of 2013.

Consolidated Gross Margin improved by 130 bp year-on-year to 30.6% in the third quarter, and by 160 bp year-on-year to 30.1% in the first nine months of 2013.

Consolidated EBITDA increased by 38.6% (35.3% in USD) year-on-year to RUR 2.8 bln (USD 84.6 mln) in the third quarter of 2013.

Consolidated EBITDA Margin increased by 70 bp year-on-year to 6.3% in the third quarter, and by 30 bp year-on-year to 6.1% in the first nine months of 2013.

Consolidated Operating Profit grew by 55.7% (51.9% in USD) year-on-year to RUR 1.5 bln (USD 45.8 mln) in the third quarter of 2013.

Consolidated Operating Margin improved by 70 bp year-on-year to 3.4% in the third quarter of 2013.

Consolidated Net Profit increased by 124.4% (USD 119.0%) year-on-year to RUR 628.0 mln (USD 19.1 mln) in the third quarter of 2013.

Consolidated Net Margin grew by 60 bp year-on-year to 1.4% in the third quarter of 2013.

Consolidated Operating Cash Flow increased by 72.2% (USD 69.4%) to RUR 3.6 bln (USD 114.8 mln) in the first nine months of 2013 from 2.1 bln (USD 67.8 mln) in the first nine months of 2012.

Original source: Dixy