Russian discounter, Fix Price, considers London and Moscow IPO

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Fix Price, one of the leading variety value retailers globally and the largest in Russia, announces that it intends to publish a registration document today and that it is considering proceeding with a potential initial public offering of global depositary receipts representing its ordinary shares, subject to market conditions. The company is considering applying for admission of the GDRs to the standard listing segment of the Official List of the FCA and to trading on the London Stock Exchange’s main market for listed securities and on Moscow Exchange.

Dmitry Kirsanov, CEO of Fix Price, said: “Today’s announcement represents a landmark that testifies both to the impressive size and scale that Fix Price has already achieved and to our strong belief that the Company will continue its robust growth trajectory. We pioneered variety value retail in Russia when we opened the first Fix Price store in 2007 with a vision to create the dominant retailer in this highly promising segment of the market. Today, Fix Price is far more than simply the largest variety value retail chain in the country, with over 4,200 stores – for our customers, Fix Price quite simply is the embodiment of everything they love about this retail format.

“Fix Price is a systemically important retailer that generated revenue in 2020 of more than RUB 190 billion (ca. US$ 2.6 billion), and with double-digit EBITDA margins that make us one of the most profitable retailers among publicly traded variety value retailers globally. All of this has been made possible thanks to the skill and dedication of our employees and the visionary leadership displayed by our experienced and long-established shareholders and management team.

“Our highly resilient business model has made Fix Price, we believe, the fastest growing retailer when compared to publicly listed variety value retailers globally. And it remains robust in the current environment, having delivered 16 consecutive quarters of double-digit LFL sales growth through the end of 2020. With a presence in 78 of Russia’s 85 regions, as well as neighbouring countries, and a strong track record of results in our home market, Fix Price is well positioned to pursue expansion both inside and outside of Russia.”

Fix Price highlights

  • Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has grown rapidly in recent years, with revenue of RUB 190.1 billion, RUB 142.9 billion and RUB 108.7 billion for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8 billion, RUB 27.2 billion and RUB 14.2 billion, respectively. Net income was RUB 17.6 billion, RUB 13.2 billion and RUB 9.1 billion, respectively, for the same years.
  • Fix Price occupies a separate niche to traditional discounters. Fix Price’s stores provide an affordable shopping destination, offering customers a broad range of essential and unique products at multiple fixed price points, all under RUB 250 (ca. US$3.40).
  • Fix Price’s pricing policy capitalises on a structural shift towards value among consumers worldwide, which Fix Price believes allows it to benefit in almost any economic environment, most recently during the COVID-19 pandemic. In 2020, Fix Price reported double-digit quarterly like-for-like sales growth every quarter and FY like-for-like sales growth of 15.8%.
  • The variety value retail market is one of the fastest-growing segments in Russian retail and is expected to triple in size by 2027 with a CAGR of 16.9% for 2019-2027, according to an independent industry consultant report. The market has more than doubled its size over the past five years, albeit still at a low base compared to other countries, suggesting further significant potential for growth.
  • In the Russian variety value retail market, Fix Price is the leader both by number of stores and revenue. According to an independent industry consultant report, Fix Price was estimated to account for 93% of the Russian variety value retail market by revenue in 2019, and had by far the largest number of stores among Russian variety value retailers.
  • Today there are more than 4,200 Fix Price stores primarily in Russia, as well as in neighbouring countries (Belarus, Kazakhstan, Uzbekistan, Kyrgyzstan, Latvia and Georgia), all of them stocking approximately 1,800 SKUs across around 20 product categories. As well as its own private brands, Fix Price sells products from leading global names and smaller local suppliers. Fix Price’s wholesale operations service a number of franchisees operating in Russia, Belarus, Georgia, Kazakhstan, Kyrgyzstan and Latvia.
  • Fix Price has an efficient and easily scalable business model, which is underpinned by the following key pillars: data-driven procurement, supplemented by streamlined centralised logistics, an efficient store management model, and a highly experienced management team. State-of-the art IT solutions enable Fix Price to achieve a high degree of automation across its operations.