RUSSIA: Retailer X5 returns to profit in 2013
X5 CEO described 2013 as "year of positive change"
Russian retailer X5 Retail Group today (6 March) reported higher sales and a return to profitability in 2013.
X5 made a net profit of US$344.9m last year, compared with a loss of $126.5m in 2012 as a result of impairment charges on "non-performing assets" and its Kopeyka discount chain.
The charges also hit X5's operating profit, which fell 72.7% from 2011 to $191.4m. In 2013, X5's operating profit jumped to $794.3m.
Sales for the full year were also up by 6.3% to $16.7bn. Like-for-like sales grew 4%. Its sales grew at a faster rate in 2013, than 2012, when they were up 2.2%. However, in 2013, Magnit usurped X5 as Russia's largest retailer by sales.
"2013 was a year of positive change for X5, and I am pleased to report that over the past 12 months we have made significant progress in transforming our business," CEO Stephan DuCharme said.
"Throughout the year, the turnaround continued to gather momentum as we rolled out initiatives focused on getting the retail basics right underpinned by strategic changes in our operating model as well as our management team. These changes were necessary to support the sustainable long-term growth of our business and have contributed to the turnaround taking longer than initially anticipated.
"However, the further decentralisation of our operating model and roll out of 'back-to-basics initiatives are starting to yield positive results."
In 2014, X5 plans to separate its supply chain services and infrastructure, continue to roll out a new Pyaterochka concept, including a "significant" store refurbishment programme, and introduce category management principles at its larger Perekrestok and Karusel banners.
Click here for the full set of results.
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