UNBEATABLE
EVERY DAY
VALUE
Annual Report 2022
EVERY DAY
VALUE
Annual Report 2022
Contents
Disclaimer
Since late February 2022, a range of jurisdictions (the US, EU, UK, and a handful of other countries) have
begun to impose sanctions against a number of Russian financial institutions and enterprises, as well
as whole spheres of the Russian economy and specific individuals. Amidst the ramifications of these
sanctions on the Russian economy and the retail sector in particular our Company carries
on operating in highly volatile circumstances.
Consequently, the effects on our activities are still to be assessed. We are doing our best to run the business
without any turbulence, and we continue sourcing and delivering goods at the best value for our clients.
As of the date of publication, trading in Fix Price GDRs on the London Stock Exchange is suspended
for an undisclosed period of time, and the Company cannot particularise with any extent of confidence
as to when trading will resume. However, the GDRs listed on the Moscow Exchange are traded.
2 About
the Company
12
CEO Statement
56
Sustainability
98
Appendiсes
15
Strategic
Report
85
Corporate
Governance
35
Business
Overview
Disclaimer
Since late February 2022, a range of jurisdictions (the US, EU, UK, and a handful of other countries) have
begun to impose sanctions against a number of Russian financial institutions and enterprises, as well
as whole spheres of the Russian economy and specific individuals. Amidst the ramifications of these
sanctions on the Russian economy and the retail sector in particular our Company carries
on operating in highly volatile circumstances.
Consequently, the effects on our activities are still to be assessed. We are doing our best to run the business
without any turbulence, and we continue sourcing and delivering goods at the best value for our clients.
As of the date of publication, trading in Fix Price GDRs on the London Stock Exchange is suspended
for an undisclosed period of time, and the Company cannot particularise with any extent of confidence
as to when trading will resume. However, the GDRs listed on the Moscow Exchange are traded.
2 About
the Company
12
CEO Statement
56
Sustainability
98
Appendiсes
15
Strategic
Report
85
Corporate
Governance
35
Business
Overview
ABOUT
THE COMPANY
Fix Price Group is the largest variety value retailer
in Russia with almost 5,700 stores and RUB 277.6
billion in revenue for 2022. The Company provides
an affordable and attractive shopping destination,
offering a broad range of essential and unique
products at several fixed price points
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
THE COMPANY
Fix Price Group is the largest variety value retailer
in Russia with almost 5,700 stores and RUB 277.6
billion in revenue for 2022. The Company provides
an affordable and attractive shopping destination,
offering a broad range of essential and unique
products at several fixed price points
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price at a Glance
One of the fastest-growing
variety value retailers
globally
The undisputable leader
in Russian value retail
Purpose-built from day
one to disrupt a large
and growing market
at scale
State-of-the-art
IT infrastructure that
is constantly upgraded
to support growth
An easy-to-roll-out store
format standardised
for rapid scaling
Strong value across
a diverse product offering
Years of solid profitability
performance
2022 Performance
Highlights
Continued expansion:
759 net store openings +
Revenue growth:
20.5 % y-o-y +
Robust profitability:
EBITDA margin stood at
19.5 %
Gross profit margin hit
33.1 %
a five-year high for both metrics
Loyalty membership growth:
28.7 % y-o-y +
Balance sheet strength:
0.04 x
the IAS 17-based Net Cash
to EBITDA ratio was
Our Mission
Our mission is to help people live better lives and save
money by offering a wide and unique assortment of goods
for the whole family at several fixed price points across
thousands of Fix Price stores in Russia and its neighbouring
countries.
We provide great value to millions of households
regardless of their purchasing power.
Customer first
Our work is guided by customer satisfaction,
and we strive every day to improve our offer
and service quality and ensure a unique
customer experience
Professionalism, transparency and responsibility
We are confident that professionalism, transparency
and responsibility towards our customers, partners,
employees, and shareholders help us become
a better company
One team
We create a safe and respectful work
environment that offers all of our employees
opportunities for career development
and personal growth
Our Values
3 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
One of the fastest-growing
variety value retailers
globally
The undisputable leader
in Russian value retail
Purpose-built from day
one to disrupt a large
and growing market
at scale
State-of-the-art
IT infrastructure that
is constantly upgraded
to support growth
An easy-to-roll-out store
format standardised
for rapid scaling
Strong value across
a diverse product offering
Years of solid profitability
performance
2022 Performance
Highlights
Continued expansion:
759 net store openings +
Revenue growth:
20.5 % y-o-y +
Robust profitability:
EBITDA margin stood at
19.5 %
Gross profit margin hit
33.1 %
a five-year high for both metrics
Loyalty membership growth:
28.7 % y-o-y +
Balance sheet strength:
0.04 x
the IAS 17-based Net Cash
to EBITDA ratio was
Our Mission
Our mission is to help people live better lives and save
money by offering a wide and unique assortment of goods
for the whole family at several fixed price points across
thousands of Fix Price stores in Russia and its neighbouring
countries.
We provide great value to millions of households
regardless of their purchasing power.
Customer first
Our work is guided by customer satisfaction,
and we strive every day to improve our offer
and service quality and ensure a unique
customer experience
Professionalism, transparency and responsibility
We are confident that professionalism, transparency
and responsibility towards our customers, partners,
employees, and shareholders help us become
a better company
One team
We create a safe and respectful work
environment that offers all of our employees
opportunities for career development
and personal growth
Our Values
3 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Key Figures
Operational 1
Total number of stores
(incl. franchises)
Number of
DCs
Net store
openings
5,663 10 759
4,904 8 737
4,167 8 655
2022
2021
2020
Total number of stores, DCs 2
and net store openings
2022 4
2021
2020
Sales Ticket Traffic
(2.5)
7.2 3.1 4.0
11.0 13.9
15.8 17.8 (1.7)
LFL performance, 3 %
2022
2021
2020
1,225
1,057
890
Selling space, thous. sq. m
2022
2021
2020
246,212
203,328
166,025
Retail revenue, RUB million
2022
2021
2020
60
63
60
NPS dynamics, 5 %
2022
2021
2020
21,858
16,980
11,581
Number of loyalty cardholders, thous.
1 Data for the number of DCs, stores, selling space and the number of loyalty cardholders are year-end
2 Distribution centres
3 LFL sales, average ticket and number of tickets are сalculated based on figures from stores operated by Fix Price that have been open for at
least 12 full calendar months preceding the reporting date. LFL sales and average ticket are calculated based on retail revenue gross of VAT. LFL
figures exclude stores that were temporarily closed for seven or more consecutive days during the reporting period and the comparable period
4 2022 LFL sales and average ticket are adjusted for the appreciation of the rouble by converting monthly LFL sales
abroad into roubles at the average exchange rates for each comparable month of 2021
5 Net Promoter Score (NPS) is a metric that measures the willingness of customers to recommend products or services of a company to others.
Source: Vector market research conducted in autumn 2020, autumn 2021 and autumn 2022
4 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Operational 1
Total number of stores
(incl. franchises)
Number of
DCs
Net store
openings
5,663 10 759
4,904 8 737
4,167 8 655
2022
2021
2020
Total number of stores, DCs 2
and net store openings
2022 4
2021
2020
Sales Ticket Traffic
(2.5)
7.2 3.1 4.0
11.0 13.9
15.8 17.8 (1.7)
LFL performance, 3 %
2022
2021
2020
1,225
1,057
890
Selling space, thous. sq. m
2022
2021
2020
246,212
203,328
166,025
Retail revenue, RUB million
2022
2021
2020
60
63
60
NPS dynamics, 5 %
2022
2021
2020
21,858
16,980
11,581
Number of loyalty cardholders, thous.
1 Data for the number of DCs, stores, selling space and the number of loyalty cardholders are year-end
2 Distribution centres
3 LFL sales, average ticket and number of tickets are сalculated based on figures from stores operated by Fix Price that have been open for at
least 12 full calendar months preceding the reporting date. LFL sales and average ticket are calculated based on retail revenue gross of VAT. LFL
figures exclude stores that were temporarily closed for seven or more consecutive days during the reporting period and the comparable period
4 2022 LFL sales and average ticket are adjusted for the appreciation of the rouble by converting monthly LFL sales
abroad into roubles at the average exchange rates for each comparable month of 2021
5 Net Promoter Score (NPS) is a metric that measures the willingness of customers to recommend products or services of a company to others.
Source: Vector market research conducted in autumn 2020, autumn 2021 and autumn 2022
4 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Financial
1
2022
2021
2020
33.1
31.8
32.4
Gross margin, %
2022
2021
2020
21,411
21,389
17,575
Net profit, RUB million
1 Financial data are for the full year
2 The personnel of Fix Price Group PLC in all countries where it operates, including contractors
Net (cash) / debt to EBITDA (IAS 17)
2022
2021
2020 0.5x
0.4x
(0.04)х
2022
2021
2020
277,644
230,473
190,059
Revenue, RUB million
EBITDA margin, %
2022
2021
2020
19.5
19.2
19.4
2022
2021
2020
54,198
44,155
36,788
EBITDA, RUB million
Key ESG metrics
Total average headcount of the Group 2
2022
2021
2020
39,013 33,044 31,970
Total amount of waste sent for recycling, tonnes
2022
2021
2020
28,236 19,411 17,352
Total GHG emissions (Scope 1, 2 and 3),
tonnes of CO 2 equivalent
2022
2021
2020
2,880,643 2,523,197 2,183,473
5 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2022
2021
2020
33.1
31.8
32.4
Gross margin, %
2022
2021
2020
21,411
21,389
17,575
Net profit, RUB million
1 Financial data are for the full year
2 The personnel of Fix Price Group PLC in all countries where it operates, including contractors
Net (cash) / debt to EBITDA (IAS 17)
2022
2021
2020 0.5x
0.4x
(0.04)х
2022
2021
2020
277,644
230,473
190,059
Revenue, RUB million
EBITDA margin, %
2022
2021
2020
19.5
19.2
19.4
2022
2021
2020
54,198
44,155
36,788
EBITDA, RUB million
Key ESG metrics
Total average headcount of the Group 2
2022
2021
2020
39,013 33,044 31,970
Total amount of waste sent for recycling, tonnes
2022
2021
2020
28,236 19,411 17,352
Total GHG emissions (Scope 1, 2 and 3),
tonnes of CO 2 equivalent
2022
2021
2020
2,880,643 2,523,197 2,183,473
5 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Who We Are
Our Concept and Differentiation
The Fix Price
multiple price point
architecture covers
nine anchor prices:
It allows us to provide an extensive
range of products while retaining
the appeal of variety value retail
Fix Price Group is the largest variety value retailer
in Russia, 1 operating under the trademark Fix Price,
with almost 5,700 stores and RUB 277.6 billion in
revenue for 2022. We provide an affordable and
attractive shopping, offering a broad range of essential
and unique products at several fixed price points.
Currently, there are 5,098 stores in Russia, with another
565 stores in neighbouring countries including
Belarus, Kazakhstan, Uzbekistan, Latvia, Georgia, and
Kyrgyzstan – all operating under the Fix Price brand.
We are the leader of the Russian VVR market both in
terms of store count and sales. According to the retail
consultancy INFOLine, Fix Price’s share of the total
Russian VVR market in 2022 was estimated at 89.6%. 2
We have delivered continued revenue growth over the
past several years supported by strong like-for-like sales
performance. Our product offering includes our own private
labels as well as third-party branded and non-branded goods,
comprising c. 2,000 SKUs across approximately 20 categories,
including non-food, food and drogerie (household
chemicals, cosmetics and hygiene) products.
The Company operates a completely standardised store portfolio
that is well positioned to drive outstanding unit economics.
We have built a one-store format by leveraging a consistent
and uniform concept across the entire Fix Price store network.
This format encompasses average store size, product assortment,
pricing policies, product layout, equipment and marketing,
and promotional activities. Such approach allows us to ensure
our business remains consistent and scalable, all while driving
efficiency gains and building brand recognition with customers.
Our typical store has an average selling space of c. 215 square
metres and is mainly located in convenient and high-traffic
sites in high-density areas, as well as in shopping malls and
shopping centres, across a variety of urban areas. In addition,
we have been successful in operating stores in smaller
localities and plan to continue to expand in those settings.
The key pillars that make Fix Price stand out from the competition
are our market-leading position based on our unique customer
proposition; our stores’ format, which holds significant future
growth potential; our consistently strong performance against
financial and operational KPIs; and our cutting-edge IT solutions.
We also strive to provide an exciting treasure hunt experience
for our customers. When delivering our customer proposition,
we aim to surprise consumers with new and exciting
goods at affordable prices. We believe that we help make
our customers’ everyday lives better by offering an enjoyable
shopping experience at all Fix Price stores.
Regular customer feedback ensures Fix Price is able to give
customers what they want. We aim to deliver a constantly
refreshed product range by launching c. 50 new products
every week, with approximately 67% of our product
assortment updated up to six times per year.
~5,700
stores
RUB 278
billion revenue
in 2022
Fix Price’s product
assortment is supported
by our strong private label
offering, which comprises
~2,000 SKUs
across approximately
20 categories
~215 sq.m
average selling space of our
typical store
1 Variety Value Retail (VVR) channel covers stores that sell general
merchandise, such as apparel, automotive supplies, dry goods, toys,
hardware, home furnishings, and a selection of groceries usually at
discounted prices, sometimes at one or more fixed price points
2 Based on sales including VAT
RUB 55
RUB 79
RUB 99
RUB 149
RUB 199
RUB 249
RUB 299
RUB 349
RUB 59
1/3
of overall retail sales
6 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
The Fix Price
multiple price point
architecture covers
nine anchor prices:
It allows us to provide an extensive
range of products while retaining
the appeal of variety value retail
Fix Price Group is the largest variety value retailer
in Russia, 1 operating under the trademark Fix Price,
with almost 5,700 stores and RUB 277.6 billion in
revenue for 2022. We provide an affordable and
attractive shopping, offering a broad range of essential
and unique products at several fixed price points.
Currently, there are 5,098 stores in Russia, with another
565 stores in neighbouring countries including
Belarus, Kazakhstan, Uzbekistan, Latvia, Georgia, and
Kyrgyzstan – all operating under the Fix Price brand.
We are the leader of the Russian VVR market both in
terms of store count and sales. According to the retail
consultancy INFOLine, Fix Price’s share of the total
Russian VVR market in 2022 was estimated at 89.6%. 2
We have delivered continued revenue growth over the
past several years supported by strong like-for-like sales
performance. Our product offering includes our own private
labels as well as third-party branded and non-branded goods,
comprising c. 2,000 SKUs across approximately 20 categories,
including non-food, food and drogerie (household
chemicals, cosmetics and hygiene) products.
The Company operates a completely standardised store portfolio
that is well positioned to drive outstanding unit economics.
We have built a one-store format by leveraging a consistent
and uniform concept across the entire Fix Price store network.
This format encompasses average store size, product assortment,
pricing policies, product layout, equipment and marketing,
and promotional activities. Such approach allows us to ensure
our business remains consistent and scalable, all while driving
efficiency gains and building brand recognition with customers.
Our typical store has an average selling space of c. 215 square
metres and is mainly located in convenient and high-traffic
sites in high-density areas, as well as in shopping malls and
shopping centres, across a variety of urban areas. In addition,
we have been successful in operating stores in smaller
localities and plan to continue to expand in those settings.
The key pillars that make Fix Price stand out from the competition
are our market-leading position based on our unique customer
proposition; our stores’ format, which holds significant future
growth potential; our consistently strong performance against
financial and operational KPIs; and our cutting-edge IT solutions.
We also strive to provide an exciting treasure hunt experience
for our customers. When delivering our customer proposition,
we aim to surprise consumers with new and exciting
goods at affordable prices. We believe that we help make
our customers’ everyday lives better by offering an enjoyable
shopping experience at all Fix Price stores.
Regular customer feedback ensures Fix Price is able to give
customers what they want. We aim to deliver a constantly
refreshed product range by launching c. 50 new products
every week, with approximately 67% of our product
assortment updated up to six times per year.
~5,700
stores
RUB 278
billion revenue
in 2022
Fix Price’s product
assortment is supported
by our strong private label
offering, which comprises
~2,000 SKUs
across approximately
20 categories
~215 sq.m
average selling space of our
typical store
1 Variety Value Retail (VVR) channel covers stores that sell general
merchandise, such as apparel, automotive supplies, dry goods, toys,
hardware, home furnishings, and a selection of groceries usually at
discounted prices, sometimes at one or more fixed price points
2 Based on sales including VAT
RUB 55
RUB 79
RUB 99
RUB 149
RUB 199
RUB 249
RUB 299
RUB 349
RUB 59
1/3
of overall retail sales
6 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
A Format that Supports Significant
Future Growth Potential
Cutting-edge IT Solutions and Social
Responsibility at the Heart of What We Do
Consistently Strong Performance
against Financial and Operational KPIs
Over the past few years, we have been scaling our business
in a turbulent and rapidly changing environment, responding
prudently to external challenges to meet our growth
and profitability commitments. Moreover, we have been able
to capitalise on the ongoing sea change in Russian consumers’
behaviour towards favouring greater value offerings.
We believe there is further potential to expand our operations
in Russia as well as in its neighbouring countries. The total
store potential for the Russian variety value retail market
is estimated at approximately 15,600 stores (including
Fix Price stores already operating), which is nearly
3x higher than the Group’s current store count in
Russia. 1 Looking outside of Russia, we expect the total
store potential to be approximately 3,000 combined
for the respective VVR markets in Belarus
and Kazakhstan (including Fix Price stores already operating). 1
State-of-the art integrated IT systems provide Fix Price
with seamless control over the entire supply chain, resulting
in high operational scalability and substantial cost savings.
The use of data mining and analysis of consumer preferences
gleaned from our loyalty card programme allow us to make
smart merchandising, procurement and marketing decisions.
We drive standardisation, agile sourcing and tech-enabled
automation across all stores to deliver operational excellence.
The Company also views social responsibility as an integral
part of our culture. We supply a wide range of essential
products across all 80 regions within our footprint in Russia
and enable our customers to advance their quality of life
by providing equal access to our compelling assortment
at the best value. We have established rigorous
quality control, risk management and corporate
governance procedures.
~18,600 White space store number
potential in Russia, Belarus
and Kazakhstan
1 Source: INFOLine
2 Based on information available in open access about publicly traded US
and international dollar stores / value retailers, including Dollar General,
Dollar Tree, Five Below, Grocery Outlet, Ollie’s, B&M, Dino, and Dollarama
We have consistently been one of the leading publicly
traded variety value retailers globally by revenue
growth and profitability for several years running. 2
Fix Price has grown its revenue at a CAGR of 21%
(in FY 2022 vs FY 2020), driven by strong like-for-like
sales performance and a rapid expansion of store
network. Top-line growth has been supported
by historically robust 19% plus EBITDA margins. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
7
Future Growth Potential
Cutting-edge IT Solutions and Social
Responsibility at the Heart of What We Do
Consistently Strong Performance
against Financial and Operational KPIs
Over the past few years, we have been scaling our business
in a turbulent and rapidly changing environment, responding
prudently to external challenges to meet our growth
and profitability commitments. Moreover, we have been able
to capitalise on the ongoing sea change in Russian consumers’
behaviour towards favouring greater value offerings.
We believe there is further potential to expand our operations
in Russia as well as in its neighbouring countries. The total
store potential for the Russian variety value retail market
is estimated at approximately 15,600 stores (including
Fix Price stores already operating), which is nearly
3x higher than the Group’s current store count in
Russia. 1 Looking outside of Russia, we expect the total
store potential to be approximately 3,000 combined
for the respective VVR markets in Belarus
and Kazakhstan (including Fix Price stores already operating). 1
State-of-the art integrated IT systems provide Fix Price
with seamless control over the entire supply chain, resulting
in high operational scalability and substantial cost savings.
The use of data mining and analysis of consumer preferences
gleaned from our loyalty card programme allow us to make
smart merchandising, procurement and marketing decisions.
We drive standardisation, agile sourcing and tech-enabled
automation across all stores to deliver operational excellence.
The Company also views social responsibility as an integral
part of our culture. We supply a wide range of essential
products across all 80 regions within our footprint in Russia
and enable our customers to advance their quality of life
by providing equal access to our compelling assortment
at the best value. We have established rigorous
quality control, risk management and corporate
governance procedures.
~18,600 White space store number
potential in Russia, Belarus
and Kazakhstan
1 Source: INFOLine
2 Based on information available in open access about publicly traded US
and international dollar stores / value retailers, including Dollar General,
Dollar Tree, Five Below, Grocery Outlet, Ollie’s, B&M, Dino, and Dollarama
We have consistently been one of the leading publicly
traded variety value retailers globally by revenue
growth and profitability for several years running. 2
Fix Price has grown its revenue at a CAGR of 21%
(in FY 2022 vs FY 2020), driven by strong like-for-like
sales performance and a rapid expansion of store
network. Top-line growth has been supported
by historically robust 19% plus EBITDA margins. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
7
History and Development
Fix Price launches
a franchise
programme
in Russia, which rapidly
expands our presence
across the country
Fix Price launches its
first private
label offering
2010
Fix Price opens its Fix Price opens its Fix Price completes
an Initial Public
Offering of GDRs
on the London
and Moscow stock
exchanges
2019 2020 2021
Franchise programme
is launched in Belarus
and Latvia
Fix Price continues its
expansion internationally,
launching stores
in Kyrgyzstan
Fix Price opens its first
store in Uzbekistan
Updating customer
communications
through brand
ambassador integration
2017
Fix Price implements
a click-and-collect
shopping option,
pivoting off the rapid
growth in online shopping.
Fix Price customers
can now order online
and collect their purchases
from a convenient
Fix Price store nearby
2018
Fix Price introduces multiple
fixed price points
for its merchandise, providing
additional pricing flexibility
to address the market
environment and external
factors, primarily FX volatility
and inflation, as well as to expand
its assortment proposition
Fix Price embarks on its
expansion into other
countries, granting franchise
licences to open Fix Price stores
in Georgia and Kazakhstan
2016
Fix Price is founded
with the aim to offer
Russian families
a broad range
of essential goods
at a fixed, low price,
pioneering the variety
value retail concept
in Russia and creating
an affordable
and attractive shopping
destination
LLC Best Price,
Fix Price’s principal
operating subsidiary,
is incorporated, and
the first Fix Price store
opens in Moscow
2007
2022
Fix Price doubles
its network size,
reaching over
stores including
Company-operated
stores and
franchise stores
2015
2,000
1,681
397
2013
Fix Price launches
the Fix Price Club
loyalty programme
3,000 th
store
4,000 th
store
~5,700
10 DCs
21.9 million
loyalty cardholders
stores About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
8
Fix Price launches
a franchise
programme
in Russia, which rapidly
expands our presence
across the country
Fix Price launches its
first private
label offering
2010
Fix Price opens its Fix Price opens its Fix Price completes
an Initial Public
Offering of GDRs
on the London
and Moscow stock
exchanges
2019 2020 2021
Franchise programme
is launched in Belarus
and Latvia
Fix Price continues its
expansion internationally,
launching stores
in Kyrgyzstan
Fix Price opens its first
store in Uzbekistan
Updating customer
communications
through brand
ambassador integration
2017
Fix Price implements
a click-and-collect
shopping option,
pivoting off the rapid
growth in online shopping.
Fix Price customers
can now order online
and collect their purchases
from a convenient
Fix Price store nearby
2018
Fix Price introduces multiple
fixed price points
for its merchandise, providing
additional pricing flexibility
to address the market
environment and external
factors, primarily FX volatility
and inflation, as well as to expand
its assortment proposition
Fix Price embarks on its
expansion into other
countries, granting franchise
licences to open Fix Price stores
in Georgia and Kazakhstan
2016
Fix Price is founded
with the aim to offer
Russian families
a broad range
of essential goods
at a fixed, low price,
pioneering the variety
value retail concept
in Russia and creating
an affordable
and attractive shopping
destination
LLC Best Price,
Fix Price’s principal
operating subsidiary,
is incorporated, and
the first Fix Price store
opens in Moscow
2007
2022
Fix Price doubles
its network size,
reaching over
stores including
Company-operated
stores and
franchise stores
2015
2,000
1,681
397
2013
Fix Price launches
the Fix Price Club
loyalty programme
3,000 th
store
4,000 th
store
~5,700
10 DCs
21.9 million
loyalty cardholders
stores About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
8
2022 Highlights
January
Fix Price signs
an agreement with
the industrial developer
PNK Group to build
a new DC.
With a total area of
the new DC will be built
in Domodedovo, south
of Moscow, and starts
operating in Q1 2023
~68,000 sq.m,
registered member
20 millionth
Fix Price’s loyalty
programme sees its
DC helps optimise
logistics to Kazakhstan
~23,400 sq.m
Fix Price reopens
its second DC
in Novosibirsk. The
September
at PNK Park Siberian
Tract, a new industrial
park in Yekaterinburg.
Once construction
is completed, the DC will
become the property
of Fix Price and will
be launched in Q4 2023 ~68,000 sq.m
Fix Price Group PLC
merges with its subsidiary
Kolmaz Holdings Ltd
Fix Price contracts
PNK Group, a Russian
industrial developer,
to construct a new DC.
The new warehouse
will take up an area of
October
February
Fix Price makes its first ESG
disclosure: a presentation
on the Company’s main
ESG-related activities
and a data book outlining
key ESG metrics
The Fix Price Board
of Directors approves
the redomiciliation
to Cyprus. Following
the move, the holding
entity intends to
merge with Kolmaz,
its Cyprus-incorporated
subsidiary
The consultancy Romir
ranks Fix Price
the top stationery
retailer by sales in 2021
March
Fix Price opens its first
store in the Nenets
Autonomous District
store
5,000 th
Fix Price opens its
July
Fix Price publishes its first
Sustainability Report
Fix Price installs its
500 th
self-service checkout
June
leased DC in the Samara
Region, bringing
the number of DCs to nine
~40,000 sq.m
Fix Price launches a new,
August
May
Fix Price Group announces
its incorporation
in the Republic of Cyprus
and dissolves its British
Virgin Islands entity
April
Fix Price publishes
its first Annual Report
Fix Price launches
paperless receipts About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
9
January
Fix Price signs
an agreement with
the industrial developer
PNK Group to build
a new DC.
With a total area of
the new DC will be built
in Domodedovo, south
of Moscow, and starts
operating in Q1 2023
~68,000 sq.m,
registered member
20 millionth
Fix Price’s loyalty
programme sees its
DC helps optimise
logistics to Kazakhstan
~23,400 sq.m
Fix Price reopens
its second DC
in Novosibirsk. The
September
at PNK Park Siberian
Tract, a new industrial
park in Yekaterinburg.
Once construction
is completed, the DC will
become the property
of Fix Price and will
be launched in Q4 2023 ~68,000 sq.m
Fix Price Group PLC
merges with its subsidiary
Kolmaz Holdings Ltd
Fix Price contracts
PNK Group, a Russian
industrial developer,
to construct a new DC.
The new warehouse
will take up an area of
October
February
Fix Price makes its first ESG
disclosure: a presentation
on the Company’s main
ESG-related activities
and a data book outlining
key ESG metrics
The Fix Price Board
of Directors approves
the redomiciliation
to Cyprus. Following
the move, the holding
entity intends to
merge with Kolmaz,
its Cyprus-incorporated
subsidiary
The consultancy Romir
ranks Fix Price
the top stationery
retailer by sales in 2021
March
Fix Price opens its first
store in the Nenets
Autonomous District
store
5,000 th
Fix Price opens its
July
Fix Price publishes its first
Sustainability Report
Fix Price installs its
500 th
self-service checkout
June
leased DC in the Samara
Region, bringing
the number of DCs to nine
~40,000 sq.m
Fix Price launches a new,
August
May
Fix Price Group announces
its incorporation
in the Republic of Cyprus
and dissolves its British
Virgin Islands entity
April
Fix Price publishes
its first Annual Report
Fix Price launches
paperless receipts About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
9
Store Portfolio and Locations
1
For Company-operated stores
2 Average net investment is
the average capital expenditure
required to open a new
Russia-based Company-
operated store, including
IT equipment and intangible
assets (e.g. software licences)
(based on capital expenditures
for stores opened in 2022)
3 Average IAS 17-based store
EBITDA is calculated as
store revenue less store
level expenses associated
with the cost of goods sold,
transportation costs, shrinkage
costs, staff costs, operating
lease expenses, bank charges,
security costs, maintenance
costs, advertising expenses,
utility expenses, and other
operating expenses for the first
full 12 calendar month
period after opening (based
on Company-operated Russian
stores that were opened
during 2021, were operating as
of 31 December 2022 and repaid
the average net investment
[i.e. where the cumulative
IAS 17-based store EBITDA
since store opening exceeded
RUB 4.8 million])
4 Average payback period
is defined as the time period
required for the cumulative
IAS 17-based store EBITDA
from a new Russia-based
Company-operated store as
per Note 3 above to cover the
sum of average net investment,
as per Note 2 above, expressed
in months
5 Average store-level ROIC
is defined as average IAS
17-based store EBITDA
as per Note 3 above divided
by average net investment,
as per Note 2 above, expressed
as a percentage
5,663 + 759
Total
5,039
624
89.0 %
11.0 %
5,098 + 653
Russia
4,575
523
80.8 %
9.2 %
263 + 51
Belarus
253
10
4.5 %
0.2 %
235 + 63
Kazakhstan
211
24
3.7 %
0.4 %
19 - 23
Uzbekistan
0
19
0.0 %
0.3 %
36 + 12
Latvia
0
36
0.0 %
0.6 %
6 + 2
Georgia
0
6
0.0 %
0.1 %
6 + 1
Kyrgyzstan
0
6
0.0 %
0.1 %
1,468 + 177
1. Central
1,456
12
25.7 %
0.2 %
200 + 26
4. North Caucasus
179
21
3.2 %
0.4 %
521 + 60
2. Northwestern
388
133
6.9 %
2.3 %
636 + 84
3. Southern
608
28
10.7 %
0.5 %
Total number of stores
Number of Company-
operated stores
Number of franchise stores
% of total number of stores
Net store openings, 2022
293 Average total
store size (sq.m) 1
216 Average store
selling space (sq.m) 1
4.8 Average net
investment
(RUB million) 2
7.2 Average IAS
17-based store
EBITDA (RUB
million) 3
~2,000 SKUs
149 Average store-level
ROIC (%) 5
10 Average payback
period (months) 4
1
5
3 7
2
6
4
8
1,064 + 136
5. Volga
1,048
16
18.5 %
0.3 %
595 + 83
7. Siberian
472
123
8.3 %
2.2 %
100 + 23
8. Far Eastern
0
100
0.0 %
1.8 %
514 + 64
6. Urals
424
90
7.5 %
1.6 % About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
10
2 Average net investment is
the average capital expenditure
required to open a new
Russia-based Company-
operated store, including
IT equipment and intangible
assets (e.g. software licences)
(based on capital expenditures
for stores opened in 2022)
3 Average IAS 17-based store
EBITDA is calculated as
store revenue less store
level expenses associated
with the cost of goods sold,
transportation costs, shrinkage
costs, staff costs, operating
lease expenses, bank charges,
security costs, maintenance
costs, advertising expenses,
utility expenses, and other
operating expenses for the first
full 12 calendar month
period after opening (based
on Company-operated Russian
stores that were opened
during 2021, were operating as
of 31 December 2022 and repaid
the average net investment
[i.e. where the cumulative
IAS 17-based store EBITDA
since store opening exceeded
RUB 4.8 million])
4 Average payback period
is defined as the time period
required for the cumulative
IAS 17-based store EBITDA
from a new Russia-based
Company-operated store as
per Note 3 above to cover the
sum of average net investment,
as per Note 2 above, expressed
in months
5 Average store-level ROIC
is defined as average IAS
17-based store EBITDA
as per Note 3 above divided
by average net investment,
as per Note 2 above, expressed
as a percentage
5,663 + 759
Total
5,039
624
89.0 %
11.0 %
5,098 + 653
Russia
4,575
523
80.8 %
9.2 %
263 + 51
Belarus
253
10
4.5 %
0.2 %
235 + 63
Kazakhstan
211
24
3.7 %
0.4 %
19 - 23
Uzbekistan
0
19
0.0 %
0.3 %
36 + 12
Latvia
0
36
0.0 %
0.6 %
6 + 2
Georgia
0
6
0.0 %
0.1 %
6 + 1
Kyrgyzstan
0
6
0.0 %
0.1 %
1,468 + 177
1. Central
1,456
12
25.7 %
0.2 %
200 + 26
4. North Caucasus
179
21
3.2 %
0.4 %
521 + 60
2. Northwestern
388
133
6.9 %
2.3 %
636 + 84
3. Southern
608
28
10.7 %
0.5 %
Total number of stores
Number of Company-
operated stores
Number of franchise stores
% of total number of stores
Net store openings, 2022
293 Average total
store size (sq.m) 1
216 Average store
selling space (sq.m) 1
4.8 Average net
investment
(RUB million) 2
7.2 Average IAS
17-based store
EBITDA (RUB
million) 3
~2,000 SKUs
149 Average store-level
ROIC (%) 5
10 Average payback
period (months) 4
1
5
3 7
2
6
4
8
1,064 + 136
5. Volga
1,048
16
18.5 %
0.3 %
595 + 83
7. Siberian
472
123
8.3 %
2.2 %
100 + 23
8. Far Eastern
0
100
0.0 %
1.8 %
514 + 64
6. Urals
424
90
7.5 %
1.6 % About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
10
Our Approach to ESG
UN Sustainable Development Goals
SDG 8 SDG 12 SDG 13
Primary SDGs
embrace three goals where
Fix Price can make the biggest
contribution:
Decent Work and
Economic Growth
Responsible
Consumption and
Production
Climate Action
Secondary SDGs
comprise four goals that are
still core priorities for us, but to
which, due to the specifics of
our business, we can only offer
a more limited contribution:
SDG 2 SDG 3 SDG 5 SDG 10
Zero Hunger Good Health and
Well-Being
Gender Equality Reduced
Inequalities
Fix Price understands the importance of the ESG agenda and has succeeded in raising ESG awareness among
its employees and stakeholders. In 2021, the Company conducted a thorough assessment of Fix Price’s ESG
practices. We then identified four key strategic priorities, which were approved by the ESG Committee, –
and what we have dubbed the 4Ps: Product, People, Partners, and Planet. The Company charted a roadmap
and is assessing initiatives that will enable it to carry out viable changes and contribute to these priority areas.
When defining our 4Ps, we considered the scope for delivering
on the Sustainable Development Goals (SDGs) established
by the United Nations. Out of the total seventeen, we selected
seven SDGs where Fix Price can deliver the largest impact
and divided them into two groups: primary and secondary SDGs. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
11
SDG 8 SDG 12 SDG 13
Primary SDGs
embrace three goals where
Fix Price can make the biggest
contribution:
Decent Work and
Economic Growth
Responsible
Consumption and
Production
Climate Action
Secondary SDGs
comprise four goals that are
still core priorities for us, but to
which, due to the specifics of
our business, we can only offer
a more limited contribution:
SDG 2 SDG 3 SDG 5 SDG 10
Zero Hunger Good Health and
Well-Being
Gender Equality Reduced
Inequalities
Fix Price understands the importance of the ESG agenda and has succeeded in raising ESG awareness among
its employees and stakeholders. In 2021, the Company conducted a thorough assessment of Fix Price’s ESG
practices. We then identified four key strategic priorities, which were approved by the ESG Committee, –
and what we have dubbed the 4Ps: Product, People, Partners, and Planet. The Company charted a roadmap
and is assessing initiatives that will enable it to carry out viable changes and contribute to these priority areas.
When defining our 4Ps, we considered the scope for delivering
on the Sustainable Development Goals (SDGs) established
by the United Nations. Out of the total seventeen, we selected
seven SDGs where Fix Price can deliver the largest impact
and divided them into two groups: primary and secondary SDGs. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
11
CEO Statement
The year of 2022 was one of the most challenging
years in Fix Price’s history, but despite this, we
pushed forward with our corporate strategy,
delivering sound operating and financial results.
We achieved a solid revenue growth, while
the EBITDA margin exceeded our 2021 IPO guidance.
We further reduced our historically low net debt
and fortified the Company’s financial position.
First, I would like to thank all my colleagues for their
unwavering commitment to serving our customers, effectively
responding to the changing environment throughout the year,
and creating a strong alignment between our value-driven
assortment and consumer demand. Moreover, I am grateful to all
our customers for the confidence they continued to show in our
Company over the year. Our successful efforts to offer the best
value across the entire product range enabled us to increase our
number of loyal customers by 29% year-on-year to 22 million.
Revenue
RUB 277.6 bln
+20.5 % y-o-y
EBITDA margin
above IPO guidance
19.5 %
+36 bps y-o-y
Dmitry Kirsanov,
CEO
12 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
The year of 2022 was one of the most challenging
years in Fix Price’s history, but despite this, we
pushed forward with our corporate strategy,
delivering sound operating and financial results.
We achieved a solid revenue growth, while
the EBITDA margin exceeded our 2021 IPO guidance.
We further reduced our historically low net debt
and fortified the Company’s financial position.
First, I would like to thank all my colleagues for their
unwavering commitment to serving our customers, effectively
responding to the changing environment throughout the year,
and creating a strong alignment between our value-driven
assortment and consumer demand. Moreover, I am grateful to all
our customers for the confidence they continued to show in our
Company over the year. Our successful efforts to offer the best
value across the entire product range enabled us to increase our
number of loyal customers by 29% year-on-year to 22 million.
Revenue
RUB 277.6 bln
+20.5 % y-o-y
EBITDA margin
above IPO guidance
19.5 %
+36 bps y-o-y
Dmitry Kirsanov,
CEO
12 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
10
modern DCs
Overcoming Challenges to Become a Stronger
Company
In the past year, Fix Price put tremendous work into ensuring
the smooth operation of our logistics and supply chain.
For instance, in 2022, we secured shipments of priority goods
through stable transportation routes and started to cooperate
more closely with freight forwarders and small and medium
carriers to test new sea routes. We also continued to explore
sourcing opportunities with new local and foreign producers
to stay flexible in case of possible changes of the suppliers’
strategy regarding the Company’s target markets.
The efficiency and speed of our geographical expansion,
our low pricing model and the quick rotation of our product
range are driven by our sourcing capabilities and distribution
platform. In 2022, we increased the total number
of distribution centres (DCs) from eight to ten as we launched
our own DC in Novosibirsk with a total area of 23,387 square
metres, in addition to leasing a DC in the Samara Region
with a total area of 37,162 square metres. The total space
of our modern distribution centres reached approximately
343,000 square metres.
Moreover, we continued to actively expand our retail
network and deliver on the targets for net store openings
announced during the Company’s IPO. In 2022, we
opened 671 Company-operated stores (+15.4% year-on-
year) and 88 franchise stores (+16.4% year-on-year). Thus,
the total number of stores grew by 759, exceeding our full-
year net opening guidance of 750 new stores. At the same
time, the total selling space of Fix Price stores grew
by 168,520 square metres (+15.9% year-on-year).
We carried this momentum into 2023 by opening our first
stores in Mongolia in January, boosting our international
presence to eight countries.
All Fix Price stores prioritise the use of locally produced
equipment, while our IT solutions are supported in-house.
This has enabled us to successfully expand our store network
and mitigate disruptions to the supply chain. Furthermore,
in 2022, despite challenges in sourcing construction materials
and price hikes, the store opening CAPEX growth remained
below non-food inflation. We were able to keep lead times
for new store openings unchanged thanks to improved
project documentation and our strong negotiating power
with landlords.
+2
DCs in 2022
Solid Performance Driven by a Resilient
Business Model
Throughout 2022, we grew our like-for-like (LFL) sales
by 10.1%, in line with our 2021 IPO projections, once again
demonstrating the success of our business model despite
the adverse external environment. We also recorded a 12.9%
increase in the LFL average ticket, with a cumulative growth
rate of 22.8% in LFL sales of food and drogerie (household
chemicals, cosmetics and hygiene) across stores in Russia.
However, LFL traffic dipped by 2.5% amid cautious consumer
sentiment and a decline in real disposable income in 2022.
Revenue in 2022 increased by 20.5% to RUB 277.6 billion,
driven by the expansion of our store network and growth
in LFL sales. We were able to achieve this by being proactive
with our inventory and delivering an attractive value
proposition to our customers.
At the same time, EBITDA grew by 22.7% to RUB 54.2 billion.
The EBITDA margin increased by 36 bps to a record high
of 19.5% (above the IPO guidance), driven by a significant
improvement in gross margin, partly offset by higher selling
and administrative expenses. Meanwhile, net profit was flat
year-on-year at RUB 21.4 billion.
~343,000 sq.m
total DC space
+60,549 sq.m
of total DC space in 2022
7
countries
of presence
in 2022
+759
stores (net) in 2022
exceeding the IPO
guidance
5,663
total number
of stores About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
13
modern DCs
Overcoming Challenges to Become a Stronger
Company
In the past year, Fix Price put tremendous work into ensuring
the smooth operation of our logistics and supply chain.
For instance, in 2022, we secured shipments of priority goods
through stable transportation routes and started to cooperate
more closely with freight forwarders and small and medium
carriers to test new sea routes. We also continued to explore
sourcing opportunities with new local and foreign producers
to stay flexible in case of possible changes of the suppliers’
strategy regarding the Company’s target markets.
The efficiency and speed of our geographical expansion,
our low pricing model and the quick rotation of our product
range are driven by our sourcing capabilities and distribution
platform. In 2022, we increased the total number
of distribution centres (DCs) from eight to ten as we launched
our own DC in Novosibirsk with a total area of 23,387 square
metres, in addition to leasing a DC in the Samara Region
with a total area of 37,162 square metres. The total space
of our modern distribution centres reached approximately
343,000 square metres.
Moreover, we continued to actively expand our retail
network and deliver on the targets for net store openings
announced during the Company’s IPO. In 2022, we
opened 671 Company-operated stores (+15.4% year-on-
year) and 88 franchise stores (+16.4% year-on-year). Thus,
the total number of stores grew by 759, exceeding our full-
year net opening guidance of 750 new stores. At the same
time, the total selling space of Fix Price stores grew
by 168,520 square metres (+15.9% year-on-year).
We carried this momentum into 2023 by opening our first
stores in Mongolia in January, boosting our international
presence to eight countries.
All Fix Price stores prioritise the use of locally produced
equipment, while our IT solutions are supported in-house.
This has enabled us to successfully expand our store network
and mitigate disruptions to the supply chain. Furthermore,
in 2022, despite challenges in sourcing construction materials
and price hikes, the store opening CAPEX growth remained
below non-food inflation. We were able to keep lead times
for new store openings unchanged thanks to improved
project documentation and our strong negotiating power
with landlords.
+2
DCs in 2022
Solid Performance Driven by a Resilient
Business Model
Throughout 2022, we grew our like-for-like (LFL) sales
by 10.1%, in line with our 2021 IPO projections, once again
demonstrating the success of our business model despite
the adverse external environment. We also recorded a 12.9%
increase in the LFL average ticket, with a cumulative growth
rate of 22.8% in LFL sales of food and drogerie (household
chemicals, cosmetics and hygiene) across stores in Russia.
However, LFL traffic dipped by 2.5% amid cautious consumer
sentiment and a decline in real disposable income in 2022.
Revenue in 2022 increased by 20.5% to RUB 277.6 billion,
driven by the expansion of our store network and growth
in LFL sales. We were able to achieve this by being proactive
with our inventory and delivering an attractive value
proposition to our customers.
At the same time, EBITDA grew by 22.7% to RUB 54.2 billion.
The EBITDA margin increased by 36 bps to a record high
of 19.5% (above the IPO guidance), driven by a significant
improvement in gross margin, partly offset by higher selling
and administrative expenses. Meanwhile, net profit was flat
year-on-year at RUB 21.4 billion.
~343,000 sq.m
total DC space
+60,549 sq.m
of total DC space in 2022
7
countries
of presence
in 2022
+759
stores (net) in 2022
exceeding the IPO
guidance
5,663
total number
of stores About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
13
Another highlight in our corporate governance
was the adoption of a new approach to managing business
processes and their interfaces with internal control and risk
management systems, as we seek to boost our business
performance amid a rapidly changing external environment.
In 2022, we launched the Processes Help project, which
aims to optimise our business processes and bolster
productivity while maintaining our high standards of quality
and leveraging costs.
Maintaining Transparency for Investors
and Shareholders
As always, we remained committed to transparency, making
every effort to maintain the trust of our stakeholders.
Although the year was challenging on almost every industry,
we continued to follow best practices in information
disclosure, publishing our financial and operating results
on a regular basis, in line with our standard practice.
Due to market turbulence and regulatory changes during
the reporting period, the Board of Directors temporarily
suspended the Group’s dividend policy in September 2022.
At the same time, we intend to continue paying dividends
in the future and will announce the updates on this matter
in due course.
Well-Established Corporate Governance
and Management Systems
Over the reporting period, we continued to build a robust
governance system in line with best practices to safeguard
the rights of shareholders and other stakeholders.
An important milestone was the decision to change
the Company’s jurisdiction of incorporation from the British
Virgin Islands to the Republic of Cyprus in order to simplify
the holding structure. Following the redomiciliation, which
was completed in May 2022, the Company merged with its
Cyprus subsidiary Kolmaz Holdings Ltd to become a single
successor entity.
1 Task Force on Climate-related Financial Disclosures (TCFD)
Delivering on ESG
Fix Price is committed to making ESG an integral part
of the Company’s day-to-day operations. In 2022, we
continued to deliver on our key strategic priorities, the 4Ps –
Product, People, Partners, and Planet.
We initiated the process of disclosing information
guided by the TCFD 1 framework and continued tracking
our greenhouse gas (GHG) emissions.
In 2022, we also introduced eco-friendly bags containing 40%
recycled polyethylene, which became extremely popular
with our customers, and continued funding the Future
Champions League charitable endowment supporting young
football players.
Ready for Future Growth
Despite the challenges stemming from the current geopolitical
and economic turbulence, we are determined to take our
social responsibility even further and will continue to care
about our customers. We intend to provide them with relevant
and exciting new products at the best prices and continue
to fully meet their preferences and needs. We believe that
we can help our customers live better lives every day, and are
confident that this approach will also benefit our shareholders
and other stakeholders.
I would like to thank the Board of Directors for their strategic
vision, and all the members of the Fix Price team for their
contribution to delivering such superb results during these
challenging times. I believe that these achievements give us
reason to be optimistic about the future of our business as we
continue to move from strength to strength. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
14
was the adoption of a new approach to managing business
processes and their interfaces with internal control and risk
management systems, as we seek to boost our business
performance amid a rapidly changing external environment.
In 2022, we launched the Processes Help project, which
aims to optimise our business processes and bolster
productivity while maintaining our high standards of quality
and leveraging costs.
Maintaining Transparency for Investors
and Shareholders
As always, we remained committed to transparency, making
every effort to maintain the trust of our stakeholders.
Although the year was challenging on almost every industry,
we continued to follow best practices in information
disclosure, publishing our financial and operating results
on a regular basis, in line with our standard practice.
Due to market turbulence and regulatory changes during
the reporting period, the Board of Directors temporarily
suspended the Group’s dividend policy in September 2022.
At the same time, we intend to continue paying dividends
in the future and will announce the updates on this matter
in due course.
Well-Established Corporate Governance
and Management Systems
Over the reporting period, we continued to build a robust
governance system in line with best practices to safeguard
the rights of shareholders and other stakeholders.
An important milestone was the decision to change
the Company’s jurisdiction of incorporation from the British
Virgin Islands to the Republic of Cyprus in order to simplify
the holding structure. Following the redomiciliation, which
was completed in May 2022, the Company merged with its
Cyprus subsidiary Kolmaz Holdings Ltd to become a single
successor entity.
1 Task Force on Climate-related Financial Disclosures (TCFD)
Delivering on ESG
Fix Price is committed to making ESG an integral part
of the Company’s day-to-day operations. In 2022, we
continued to deliver on our key strategic priorities, the 4Ps –
Product, People, Partners, and Planet.
We initiated the process of disclosing information
guided by the TCFD 1 framework and continued tracking
our greenhouse gas (GHG) emissions.
In 2022, we also introduced eco-friendly bags containing 40%
recycled polyethylene, which became extremely popular
with our customers, and continued funding the Future
Champions League charitable endowment supporting young
football players.
Ready for Future Growth
Despite the challenges stemming from the current geopolitical
and economic turbulence, we are determined to take our
social responsibility even further and will continue to care
about our customers. We intend to provide them with relevant
and exciting new products at the best prices and continue
to fully meet their preferences and needs. We believe that
we can help our customers live better lives every day, and are
confident that this approach will also benefit our shareholders
and other stakeholders.
I would like to thank the Board of Directors for their strategic
vision, and all the members of the Fix Price team for their
contribution to delivering such superb results during these
challenging times. I believe that these achievements give us
reason to be optimistic about the future of our business as we
continue to move from strength to strength. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
14
STRATEGIC
REPORT
Fix Price’s key strategic pillars are the leading position
on the Russian VVR market, top team with strong
industry expertise, unique customer value proposition,
operational excellence, substantial growth potential
and best-in-class financial KPIs
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
REPORT
Fix Price’s key strategic pillars are the leading position
on the Russian VVR market, top team with strong
industry expertise, unique customer value proposition,
operational excellence, substantial growth potential
and best-in-class financial KPIs
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
All figures in this section are based on Russian official data (including preliminary estimates) published by the Federal State Statistics Service (Rosstat) as of the date of this Report, unless otherwise noted
2 The Consumer Price Index (CPI) change calculated as average for the year
3 Source: INFOLine, 2022
Market Overview
Russian Macroeconomic Situation and Retail Market 1
Russia’s real GDP in 2018–2022, % change
~90 % 3
(2.1)
5.6
(2.7)
2.2
2.8
2022
2021
2020
2019
2018
Real disposable income in Russia
in 2018–2022, % change
(1.0)
3.2
(2.0)
1.2
0.7
2022
2021
2020
2019
2018
Consumer inflation (CPI change 2
) in Russia
in 2018–2022, %
The year 2022 proved to be extremely challenging
for the whole Russian economy. The real GDP decreased
by 2.1% in 2022, with annual consumer inflation (CPI change)
at 13.8% vs 6.7% in 2021. Food inflation accelerated to 14.9%
in 2022 compared to 8.4% in 2021, while non-food inflation
rose to 15.2% in 2022 from 7.1% in 2021 amid supply chains
disruptions. With sharp fluctuations in the national currency
during 2022 (especially in Q2 2022), the average annual
USD/RUB exchange rate was 68.5 compared to 73.7 in 2021.
At the same time, the labour market saw an improvement,
with unemployment falling to 4.0% in 2022 compared to 4.8%
in 2021. However, the real disposable income dipped by 1.0%,
with consumer confidence remaining at quite low levels
throughout the year.
Against this background, Russia’s retail trade turnover
increased by 7.7% in nominal terms (while declining by
6.7% in real terms) to RUB 42.5 trillion, with a CAGR of 7.7%
over the past five years.
On the whole, 2022 saw changes in consumer behaviour
towards a more rational approach to buying food and non-
food items amid market turbulence and low levels of
consumer confidence. Price sensitivity increased noticeably,
causing an influx of new customers to the variety value retail
(VVR) market, which, against this background, only cemented
itself as one of the fastest growing retail channels in Russia,
with an annual increase of c.22% in 2022. 3
CPI Food CPI Non-food CPI
2018 2019 2020 2021 2022
2.9
4.5
3.4
3.4
3.8 3.3
1.7
5.1
3.9
8.4
14.9
6.7
13.8
15.2
7.1
market share, making Fix Price undisputed
leader in the Russian variety value retail (VVR)
segment
16 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2 The Consumer Price Index (CPI) change calculated as average for the year
3 Source: INFOLine, 2022
Market Overview
Russian Macroeconomic Situation and Retail Market 1
Russia’s real GDP in 2018–2022, % change
~90 % 3
(2.1)
5.6
(2.7)
2.2
2.8
2022
2021
2020
2019
2018
Real disposable income in Russia
in 2018–2022, % change
(1.0)
3.2
(2.0)
1.2
0.7
2022
2021
2020
2019
2018
Consumer inflation (CPI change 2
) in Russia
in 2018–2022, %
The year 2022 proved to be extremely challenging
for the whole Russian economy. The real GDP decreased
by 2.1% in 2022, with annual consumer inflation (CPI change)
at 13.8% vs 6.7% in 2021. Food inflation accelerated to 14.9%
in 2022 compared to 8.4% in 2021, while non-food inflation
rose to 15.2% in 2022 from 7.1% in 2021 amid supply chains
disruptions. With sharp fluctuations in the national currency
during 2022 (especially in Q2 2022), the average annual
USD/RUB exchange rate was 68.5 compared to 73.7 in 2021.
At the same time, the labour market saw an improvement,
with unemployment falling to 4.0% in 2022 compared to 4.8%
in 2021. However, the real disposable income dipped by 1.0%,
with consumer confidence remaining at quite low levels
throughout the year.
Against this background, Russia’s retail trade turnover
increased by 7.7% in nominal terms (while declining by
6.7% in real terms) to RUB 42.5 trillion, with a CAGR of 7.7%
over the past five years.
On the whole, 2022 saw changes in consumer behaviour
towards a more rational approach to buying food and non-
food items amid market turbulence and low levels of
consumer confidence. Price sensitivity increased noticeably,
causing an influx of new customers to the variety value retail
(VVR) market, which, against this background, only cemented
itself as one of the fastest growing retail channels in Russia,
with an annual increase of c.22% in 2022. 3
CPI Food CPI Non-food CPI
2018 2019 2020 2021 2022
2.9
4.5
3.4
3.4
3.8 3.3
1.7
5.1
3.9
8.4
14.9
6.7
13.8
15.2
7.1
market share, making Fix Price undisputed
leader in the Russian variety value retail (VVR)
segment
16 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Russian total retail market and total
addressable market (TAM) in 2018–2022, RUB trn
Russian retail market structure in 2021–2022, %
In 2022, the share of food products in the retail trade turnover
grew slightly to 49.5%, while the share of non-food products
tapered to 50.5%, compared with 47.0% and 53.0% in 2021,
respectively.
The share of the modern grocery formats in the total retail
market continued to expand and reached 79.6% in 2022
(+1.6 pps y-o-y), while the share of the Top-10 FMCG retailers
grew by 1.8 pps to 38.5%. The modern formats were gaining
pace thanks to the attractive value proposition and the improved
customer service.
1 Total addressable market (TAM) consists of retail products that have a similar price and assortment to VVR products but are currently available
through various retail channels. Source: INFOLine
2022
2021
2020
2019
2018
39.5 2.9
42.5 3.6
33.9 2.3
33.6 2.2
31.6 2.0
6.5
6.7
6.9
7.5
8.4
Total retail market Total addressable market 1
% of total retail market
7.7% 14.9% +1.9 p.p. CAGR 2018–2022
49.5 50.5
47.0 53.0
Food Non-food
2022
2021
Furthermore, e-commerce has shown significant growth,
with a CAGR of approximately 32% from 2018 to 2022,
driven by the emergence of express delivery services
and marketplaces.
17 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
addressable market (TAM) in 2018–2022, RUB trn
Russian retail market structure in 2021–2022, %
In 2022, the share of food products in the retail trade turnover
grew slightly to 49.5%, while the share of non-food products
tapered to 50.5%, compared with 47.0% and 53.0% in 2021,
respectively.
The share of the modern grocery formats in the total retail
market continued to expand and reached 79.6% in 2022
(+1.6 pps y-o-y), while the share of the Top-10 FMCG retailers
grew by 1.8 pps to 38.5%. The modern formats were gaining
pace thanks to the attractive value proposition and the improved
customer service.
1 Total addressable market (TAM) consists of retail products that have a similar price and assortment to VVR products but are currently available
through various retail channels. Source: INFOLine
2022
2021
2020
2019
2018
39.5 2.9
42.5 3.6
33.9 2.3
33.6 2.2
31.6 2.0
6.5
6.7
6.9
7.5
8.4
Total retail market Total addressable market 1
% of total retail market
7.7% 14.9% +1.9 p.p. CAGR 2018–2022
49.5 50.5
47.0 53.0
Food Non-food
2022
2021
Furthermore, e-commerce has shown significant growth,
with a CAGR of approximately 32% from 2018 to 2022,
driven by the emergence of express delivery services
and marketplaces.
17 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
All figures in this section are based on INFOLine data unless otherwise noted
2 Including VAT
Total Addressable Market 1
The total addressable market (TAM) consists of retail products
that have a similar price and assortment to VVR products
but are currently available through various retail channels.
In 2022, the estimated volume of the addressable market was
RUB 3.6 trillion, representing 8.4% of the total retail market
in Russia. Non-food categories consistently made up more
than half of the total addressable market.
The channel mix has also shifted in recent years,
with neighbourhood and variety value stores gaining ground,
while traditional trade has seen a decline in its market share.
1. Total retail market
Total retail market including all channels, categories and
regions (grocery and non-grocery segments)
2. Total addressable market
Goods that are relevant for variety value retail in price
terms taking into account the profile of variety value retail
customers, with an assortment mix limited by average store
space and relevant categories
3. Variety value retail channel
Variety Value Retail channel covers stores that sell general
merchandise, such as apparel, automotive supplies, dry goods, toys,
hardware, home furnishings, and a selection of groceries usually
at discounted prices, sometimes at one or more fixed price points
Diligent approach to TAM estimation for 2022 2
42.5
100%
8.4%
0.8%
RUB trn
3.6 RUB trn
0.4 RUB trn
18 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2 Including VAT
Total Addressable Market 1
The total addressable market (TAM) consists of retail products
that have a similar price and assortment to VVR products
but are currently available through various retail channels.
In 2022, the estimated volume of the addressable market was
RUB 3.6 trillion, representing 8.4% of the total retail market
in Russia. Non-food categories consistently made up more
than half of the total addressable market.
The channel mix has also shifted in recent years,
with neighbourhood and variety value stores gaining ground,
while traditional trade has seen a decline in its market share.
1. Total retail market
Total retail market including all channels, categories and
regions (grocery and non-grocery segments)
2. Total addressable market
Goods that are relevant for variety value retail in price
terms taking into account the profile of variety value retail
customers, with an assortment mix limited by average store
space and relevant categories
3. Variety value retail channel
Variety Value Retail channel covers stores that sell general
merchandise, such as apparel, automotive supplies, dry goods, toys,
hardware, home furnishings, and a selection of groceries usually
at discounted prices, sometimes at one or more fixed price points
Diligent approach to TAM estimation for 2022 2
42.5
100%
8.4%
0.8%
RUB trn
3.6 RUB trn
0.4 RUB trn
18 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
7
Food
and Drinks
12
Health
and Beauty
17
Pet Care
17
Homewares, Home
Furnishing and DIY
5
Automotive
Supplies
8
Apparel
and Footwear
8
Other Non-food
Categories
16
Toys and Kids
13
Leisure
and Personal Goods
7
Electronics
and Appliance
42
12
8
6
4
3
3
2
2
18
The VVR channel’s share in the target
market is about 10%, and this format is
projected to become one of the largest
channels in terms of market share, while
the traditional and fragmented trade will
continue to decline. 4
Sustainable growth of the TAM 1
and VVR 3 channel, RUB billion
3,564
353
2,946
290
2,340
243
2,236
189
2,046
148
10 10 10
8
7
Variety value retail channel
Other channels
% of VVR in TAM
2018 2019 2020 2021 2022
+15 % TAM
CAGR 18 22
+24 % VVR
1 Total addressable market
2 Calculated as Total Addressable Market for the specific category divided by the respective category value in the total retail market
3 Variety value retail channel
4 Source: INFOLine
TAM 1 relevant products across categories
% of total category 2
% of TAM
19 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Food
and Drinks
12
Health
and Beauty
17
Pet Care
17
Homewares, Home
Furnishing and DIY
5
Automotive
Supplies
8
Apparel
and Footwear
8
Other Non-food
Categories
16
Toys and Kids
13
Leisure
and Personal Goods
7
Electronics
and Appliance
42
12
8
6
4
3
3
2
2
18
The VVR channel’s share in the target
market is about 10%, and this format is
projected to become one of the largest
channels in terms of market share, while
the traditional and fragmented trade will
continue to decline. 4
Sustainable growth of the TAM 1
and VVR 3 channel, RUB billion
3,564
353
2,946
290
2,340
243
2,236
189
2,046
148
10 10 10
8
7
Variety value retail channel
Other channels
% of VVR in TAM
2018 2019 2020 2021 2022
+15 % TAM
CAGR 18 22
+24 % VVR
1 Total addressable market
2 Calculated as Total Addressable Market for the specific category divided by the respective category value in the total retail market
3 Variety value retail channel
4 Source: INFOLine
TAM 1 relevant products across categories
% of total category 2
% of TAM
19 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
All figures in this section are based on INFOLine data unless otherwise noted
2 World Bank as of 2021, including Fix Price’s current countries of operation: Russia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Latvia and Uzbekistan
3 Referring to population earning USD 640 or less, Rosstat as of 2022, converted at 31 December 2022 exchange rate of 70.34 (USD/RUB)
4 World Bank as of 2021; includes the CIS countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan
and Uzbekistan), Georgia and Latvia
5 According to customer survey by NielsenIQ: FMCG market 2022 main trends
Variety Value Retail Market 1
Fix Price, the largest modern retail player in the VVR channel,
opened its first store in Russia in 2007. Since then, the market
has grown considerably, but its size is still remarkably smaller
than in other countries where the VVR format is also widely-
spread.
72 %
of customers are
sensitive to prices 5
218 mln+
population in Russia and other
core countries of operation 2
251 mln+
population in the CIS and
neighbouring countries 4
70 %
of Russian population are
immediate target customers 3
The landscape of the VVR segment of the retail market has
changed significantly over the years, with various specialist
players entering and then leaving the market. In the recent
years, the majority of VVR specialist players has ceased
operations in Russia.
In 2022, the VVR market accounted for 0.8% of the total retail
market in Russia that speaks of an outstanding significant
potential for further growth.
20 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2 World Bank as of 2021, including Fix Price’s current countries of operation: Russia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Latvia and Uzbekistan
3 Referring to population earning USD 640 or less, Rosstat as of 2022, converted at 31 December 2022 exchange rate of 70.34 (USD/RUB)
4 World Bank as of 2021; includes the CIS countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan
and Uzbekistan), Georgia and Latvia
5 According to customer survey by NielsenIQ: FMCG market 2022 main trends
Variety Value Retail Market 1
Fix Price, the largest modern retail player in the VVR channel,
opened its first store in Russia in 2007. Since then, the market
has grown considerably, but its size is still remarkably smaller
than in other countries where the VVR format is also widely-
spread.
72 %
of customers are
sensitive to prices 5
218 mln+
population in Russia and other
core countries of operation 2
251 mln+
population in the CIS and
neighbouring countries 4
70 %
of Russian population are
immediate target customers 3
The landscape of the VVR segment of the retail market has
changed significantly over the years, with various specialist
players entering and then leaving the market. In the recent
years, the majority of VVR specialist players has ceased
operations in Russia.
In 2022, the VVR market accounted for 0.8% of the total retail
market in Russia that speaks of an outstanding significant
potential for further growth.
20 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
Based on sales, including VAT
2 Number of Fix Price and Galamart stores in Russia
3 Home market and Zaodno merged before exiting the business
Fix Price is the market leader in the Russian variety value retail
Company
Number of stores, end of period Market share 1
Year of market entry / exit
2017 2022 2019 2022
2,477 5,098 2 89.4% 89.6% 2007
181 508 2 8.9% 10.4% 2009
116
Сlosed
2013 / 2021
22 2010 / 2019
27 2015 / 2018
50 2012 / 2018
3
21 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2 Number of Fix Price and Galamart stores in Russia
3 Home market and Zaodno merged before exiting the business
Fix Price is the market leader in the Russian variety value retail
Company
Number of stores, end of period Market share 1
Year of market entry / exit
2017 2022 2019 2022
2,477 5,098 2 89.4% 89.6% 2007
181 508 2 8.9% 10.4% 2009
116
Сlosed
2013 / 2021
22 2010 / 2019
27 2015 / 2018
50 2012 / 2018
3
21 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
“Other international geographies” refers to Kazakhstan and Belarus
2 Number of Fix Price stores as of Dec’22
3 5,596 stores in the selected Fix Price countries of operation (Russia,
Belarus and Kazakhstan)
4 “Current number of stores” in the VVR channel refers to Russia and
other international geographies of Belarus and Kazakhstan (analysed
by INFOLine)
5 Siberian, Urals, Far East and North-Caucasus regions
6 Belarus and Kazakhstan
7 Total store potential for Russia and other international geographies
of Belarus and Kazakhstan (for Fix Price and competitors, incl.
existing stores)
Opportunities for Expansion
According to INFOLine, there is significant potential for
growth in the VVR market, with an estimated capacity
to expand to around 18,600 stores in Russia and nearby
countries such as Kazakhstan and Belarus. This number
is roughly 3 times greater than the current number
of existing stores.
In order to build upon our initial success in Russia and
neighbouring countries, we plan to continue our medium-
term growth strategy by expanding into new areas and
driving our revenue increase by providing a unique value
proposition that meets the changing needs of our customers,
and by creating a pleasant in-store experience for every
customer.
Total potential of variety value retail stores in Russia and other
international geographies 1
18,600
7
Total market
store potential
6,100
Current number
of stores 4
Central
region
Volga
region
North-
Western
& South
regions
Other
regions 5
Other
interna-
tional
geogra-
phies 6
Belarus
Russia
Kazakhstan
5,663
Fix Price stores 2
High potential
or further
store roll-out
5,098 3
498 3
Uzbekistan
Latvia
Georgia
Kyrgyzstan
67
22 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2 Number of Fix Price stores as of Dec’22
3 5,596 stores in the selected Fix Price countries of operation (Russia,
Belarus and Kazakhstan)
4 “Current number of stores” in the VVR channel refers to Russia and
other international geographies of Belarus and Kazakhstan (analysed
by INFOLine)
5 Siberian, Urals, Far East and North-Caucasus regions
6 Belarus and Kazakhstan
7 Total store potential for Russia and other international geographies
of Belarus and Kazakhstan (for Fix Price and competitors, incl.
existing stores)
Opportunities for Expansion
According to INFOLine, there is significant potential for
growth in the VVR market, with an estimated capacity
to expand to around 18,600 stores in Russia and nearby
countries such as Kazakhstan and Belarus. This number
is roughly 3 times greater than the current number
of existing stores.
In order to build upon our initial success in Russia and
neighbouring countries, we plan to continue our medium-
term growth strategy by expanding into new areas and
driving our revenue increase by providing a unique value
proposition that meets the changing needs of our customers,
and by creating a pleasant in-store experience for every
customer.
Total potential of variety value retail stores in Russia and other
international geographies 1
18,600
7
Total market
store potential
6,100
Current number
of stores 4
Central
region
Volga
region
North-
Western
& South
regions
Other
regions 5
Other
interna-
tional
geogra-
phies 6
Belarus
Russia
Kazakhstan
5,663
Fix Price stores 2
High potential
or further
store roll-out
5,098 3
498 3
Uzbekistan
Latvia
Georgia
Kyrgyzstan
67
22 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
60
%
high NPS
1 Based on information available in open access about publicly traded US and international dollar stores / value retailers, including Dollar General, Dollar Tree, Five Below, Grocery Outlet, Ollie’s, B&M, Dino, and Dollarama
Strategic Pillars
The leader in a large
and growing market
Our Key Success Drivers Competitive Edge Track Record
Fix Price is the leader in the Russian variety value retail
market with an approximately 90% market share.
We also consistently post one of the fastest organic
growth rates globally compared to peers 1
Fix Price’s policy is to be the price leader across
our broad assortment, bringing significant savings
to consumers compared to other offline and online
retailers.
We provide remarkable value across a diverse, unique
and ever-changing product range in an engaging
treasure hunt-style shopping experience, helping
customers live a better life
Fix Price’s efficient business model is driven by
lean decision making and a nimble management
approach with a standardised store network, highly
automated operations, centralised logistics and efficient
procurement and sourcing
16 years
of business growth
A “one store” format:
a consistent and uniform
concept across the entire chain,
with the same assortment
and prices, and a similar look
and feel
A unique customer
value proposition
~21.9 million
registered loyalty cardholders
56 %
of retail sales in 2022 were
generated by Fix Price
loyalty cardholders
Operational
excellence
~5,700 stores
80
Russian regions of presence
10
DCs including 6 owned and 4
leased centres
>500
local and international supplier
base
6 neighbouring countries
~90%
market share in the variety
value retail market in Russia
~2/3
of retail sales are made
up of general merchandise /
changing assortment rotated
up to 6 times a year
~343,000 sq.m
total DC space
SAP ERP
on-premise backbone deployed
since day one
23 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
high NPS
1 Based on information available in open access about publicly traded US and international dollar stores / value retailers, including Dollar General, Dollar Tree, Five Below, Grocery Outlet, Ollie’s, B&M, Dino, and Dollarama
Strategic Pillars
The leader in a large
and growing market
Our Key Success Drivers Competitive Edge Track Record
Fix Price is the leader in the Russian variety value retail
market with an approximately 90% market share.
We also consistently post one of the fastest organic
growth rates globally compared to peers 1
Fix Price’s policy is to be the price leader across
our broad assortment, bringing significant savings
to consumers compared to other offline and online
retailers.
We provide remarkable value across a diverse, unique
and ever-changing product range in an engaging
treasure hunt-style shopping experience, helping
customers live a better life
Fix Price’s efficient business model is driven by
lean decision making and a nimble management
approach with a standardised store network, highly
automated operations, centralised logistics and efficient
procurement and sourcing
16 years
of business growth
A “one store” format:
a consistent and uniform
concept across the entire chain,
with the same assortment
and prices, and a similar look
and feel
A unique customer
value proposition
~21.9 million
registered loyalty cardholders
56 %
of retail sales in 2022 were
generated by Fix Price
loyalty cardholders
Operational
excellence
~5,700 stores
80
Russian regions of presence
10
DCs including 6 owned and 4
leased centres
>500
local and international supplier
base
6 neighbouring countries
~90%
market share in the variety
value retail market in Russia
~2/3
of retail sales are made
up of general merchandise /
changing assortment rotated
up to 6 times a year
~343,000 sq.m
total DC space
SAP ERP
on-premise backbone deployed
since day one
23 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Substantial growth
potential
Best-in-class financial
KPIs
A top team
with strong industry
expertise
The total store potential for the Russian variety value
retail market is estimated at approximately 15,600
stores 1 (including Fix Price stores), which is nearly 3.1x
higher than the Company’s current store network
in Russia.
Outside of Russia, we target market capacity of
approximately 3,000 stores 1 across Belarus and
Kazakhstan for the respective VVR markets
We are one of the leading publicly traded variety value
retailers globally by revenue growth and profitability 2
The Company benefits from founders
and management with substantial prior
experience at discount and non-food retailers,
an entrepreneurial spirit that is fostered at all levels,
and a flat corporate structure that empowers rapid
and effective decision making
759
net store openings in 2022
+21 % CAGR
revenue growth
in FY 2022 vs FY 2020
19.5 %
3
robust EBITDA margin
Top management with proven
track record and low turnover
Our Key Success Drivers Competitive Edge Track Record
Standardisation
across the store network enabling rapid
and wide-reaching roll-out
10 months
average store payback period
RUB 4.8 million
average pre-opening CAPEX
per store in 2022
Governance policies
developed in cooperation
with an international law firm
to ensure transparency and
compliance with corporate
governance and sustainability
best practices
Targeted management
incentives and KPIs, LTI aimed
to achieve the strategic goals
of the Company
Source: INFOLine
Based on information available in open access about publicly traded US and international dollar stores / value retailers, including Dollar General, Dollar Tree, Five Below, Grocery Outlet, Ollie’s, B&M, Dino, and Dollarama
For FY 2022 based on IFRS 16
1
2
3
24 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
potential
Best-in-class financial
KPIs
A top team
with strong industry
expertise
The total store potential for the Russian variety value
retail market is estimated at approximately 15,600
stores 1 (including Fix Price stores), which is nearly 3.1x
higher than the Company’s current store network
in Russia.
Outside of Russia, we target market capacity of
approximately 3,000 stores 1 across Belarus and
Kazakhstan for the respective VVR markets
We are one of the leading publicly traded variety value
retailers globally by revenue growth and profitability 2
The Company benefits from founders
and management with substantial prior
experience at discount and non-food retailers,
an entrepreneurial spirit that is fostered at all levels,
and a flat corporate structure that empowers rapid
and effective decision making
759
net store openings in 2022
+21 % CAGR
revenue growth
in FY 2022 vs FY 2020
19.5 %
3
robust EBITDA margin
Top management with proven
track record and low turnover
Our Key Success Drivers Competitive Edge Track Record
Standardisation
across the store network enabling rapid
and wide-reaching roll-out
10 months
average store payback period
RUB 4.8 million
average pre-opening CAPEX
per store in 2022
Governance policies
developed in cooperation
with an international law firm
to ensure transparency and
compliance with corporate
governance and sustainability
best practices
Targeted management
incentives and KPIs, LTI aimed
to achieve the strategic goals
of the Company
Source: INFOLine
Based on information available in open access about publicly traded US and international dollar stores / value retailers, including Dollar General, Dollar Tree, Five Below, Grocery Outlet, Ollie’s, B&M, Dino, and Dollarama
For FY 2022 based on IFRS 16
1
2
3
24 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Business Model
Undisputed No.1
position in the Russian variety value retail market
5,663
stores in Russia
and neighbouring
countries
10
DCs infrastructure
with total space
of 343 thous. sq.m
~500
suppliers, c. 77 %
of purchases sourced
domestically
>39,000
of personnel, a highly
experienced
and consistent team
Best-in-class
profitability and robust
EBITDA
A scalable
store format
with low CAPEX requirement
For our
customers
Equal access to wide assortment
boosting the quality of life of our
customers, no matter where they live
For our
personnel
• Career opportunities
• Talent development
• Safe and healthy work
environment
For our
shareholders
Commitment to transparent
and responsible management
and long-term value creation
For our
partners
Opportunities for growth,
scale and stability
For our
communities
Unique CVP Efficient store
management
model
Strict cost
control
Smart &
streamlined
logistics
Well-developed
tech platform
Agile
sourcing
• Good corporate citizenship
is part of DNA
• Reliable supply of essential
products to all regions of operation
Stakeholder value creation
Key pillars of our business success
25 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Undisputed No.1
position in the Russian variety value retail market
5,663
stores in Russia
and neighbouring
countries
10
DCs infrastructure
with total space
of 343 thous. sq.m
~500
suppliers, c. 77 %
of purchases sourced
domestically
>39,000
of personnel, a highly
experienced
and consistent team
Best-in-class
profitability and robust
EBITDA
A scalable
store format
with low CAPEX requirement
For our
customers
Equal access to wide assortment
boosting the quality of life of our
customers, no matter where they live
For our
personnel
• Career opportunities
• Talent development
• Safe and healthy work
environment
For our
shareholders
Commitment to transparent
and responsible management
and long-term value creation
For our
partners
Opportunities for growth,
scale and stability
For our
communities
Unique CVP Efficient store
management
model
Strict cost
control
Smart &
streamlined
logistics
Well-developed
tech platform
Agile
sourcing
• Good corporate citizenship
is part of DNA
• Reliable supply of essential
products to all regions of operation
Stakeholder value creation
Key pillars of our business success
25 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Unique Customer Value Proposition
Strong Value across a Diverse Product Offering
~2,000 SKUs
across 20 different
categories
Fix Price sells a broad range of products, offering
approximately 2,000 SKUs across 20 different categories,
including household goods, cosmetics and hygiene,
stationery and books, clothing, toys, household chemicals,
as well as shelf-stable food and drinks. We maintain a variety
of private labels, major brands and no-name products which
accounted for approximately 28%, 38% and 34% of 2022 retail
sales, respectively.
Fix Price continues to promote treasure-hunt shopping
experiences. Thanks to our scale, expertise and involvement
into the production process we find ways to offer much
more attractive prices on comparable products that
provokes “WOW!” effect and prompts traffic and excitement.
34 %
no-name
brands
Consumables and regular products make up around a third
of retail sales at Fix Price, while the remaining two-thirds
of retail sales come from general merchandise and new
products. Fix Price strives to be the price leader across
all product categories and SKUs, encompassed by our
Company strategy.
We aim to provide our customers with remarkable savings
vs competitors’ prices. A basket filled with products
from Fix Price is generally cheaper than the same basket
filled with comparable goods at other Russian food
and non-food brick-and-mortar retailers and e-grocers.
We do all we can to offer outstanding value across our nine
highly competitive anchor price points, which as at 2022-end
all sat under RUB 350.
28 %
private label
products
38 %
major
brands
Fix Price maintains strong
value across a diverse product
offering for its customers, which
is supplemented by a relentless
focus on EDLP, 1 a constantly
changing assortment, a balanced
product portfolio and a well-
diversified mix. Our loyalty card
programme adds further value
thanks to a number of attractive
benefits
Food & Drink 28%
Household goods 18%
Cosmetics
and Hygiene 18% Stationery & Books 6% Clothes 5%
Toys 4% Party & Celebration 5% Household Chemicals 8%
Accessories 3%
Others 2 5%
Food Non-food Drogerie
1
Everyday low prices
2 Others refer to electronics, healthy lifestyle, car accessories, pet supplies and other general merchandise
26 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Сategory mix as % of retail sales in 2022
Strong Value across a Diverse Product Offering
~2,000 SKUs
across 20 different
categories
Fix Price sells a broad range of products, offering
approximately 2,000 SKUs across 20 different categories,
including household goods, cosmetics and hygiene,
stationery and books, clothing, toys, household chemicals,
as well as shelf-stable food and drinks. We maintain a variety
of private labels, major brands and no-name products which
accounted for approximately 28%, 38% and 34% of 2022 retail
sales, respectively.
Fix Price continues to promote treasure-hunt shopping
experiences. Thanks to our scale, expertise and involvement
into the production process we find ways to offer much
more attractive prices on comparable products that
provokes “WOW!” effect and prompts traffic and excitement.
34 %
no-name
brands
Consumables and regular products make up around a third
of retail sales at Fix Price, while the remaining two-thirds
of retail sales come from general merchandise and new
products. Fix Price strives to be the price leader across
all product categories and SKUs, encompassed by our
Company strategy.
We aim to provide our customers with remarkable savings
vs competitors’ prices. A basket filled with products
from Fix Price is generally cheaper than the same basket
filled with comparable goods at other Russian food
and non-food brick-and-mortar retailers and e-grocers.
We do all we can to offer outstanding value across our nine
highly competitive anchor price points, which as at 2022-end
all sat under RUB 350.
28 %
private label
products
38 %
major
brands
Fix Price maintains strong
value across a diverse product
offering for its customers, which
is supplemented by a relentless
focus on EDLP, 1 a constantly
changing assortment, a balanced
product portfolio and a well-
diversified mix. Our loyalty card
programme adds further value
thanks to a number of attractive
benefits
Food & Drink 28%
Household goods 18%
Cosmetics
and Hygiene 18% Stationery & Books 6% Clothes 5%
Toys 4% Party & Celebration 5% Household Chemicals 8%
Accessories 3%
Others 2 5%
Food Non-food Drogerie
1
Everyday low prices
2 Others refer to electronics, healthy lifestyle, car accessories, pet supplies and other general merchandise
26 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Сategory mix as % of retail sales in 2022
Our product mix is driven by frequent
SKU rotation
Product Range
The Company typically launches eight seasonal product
collections per year dedicated to Russian holidays such as
the New Year, Christmas, Halloween, Valentine’s Day,
1st of September (back-to-school period), 23rd of February
(Defender of the Fatherland Day), 8th of March (International
Women’s Day) and Easter, as well as gardening supplies.
By keeping Fix Price stores fresh and exciting and introducing
a treasure hunt element to our CVP, we aim to surprise
customers and encourage them to make repeat visits.
Fix Price primarily offers non-perishable food: products that
do not require refrigeration and, hence, have a longer shelf
life. This approach allows us to operate at one temperature
zone across all of our distribution centres, resulting in lower
capital expenditure requirements. Perishable food products
that require special storage conditions (such as ice cream) are
delivered by vendors directly to our stores.
The Company’s product range is built on a rigorous SKU count
intended to satisfy customer demands while at the same time
optimising inventory turnover and minimising slow-moving
stock. We have a robust “test-to-shelf” process for new SKUs,
based on a rapid decision-making process and implemented
by a highly competent procurement team. Our product
range is regularly reviewed based on market developments,
customer behaviour, information from suppliers, etc.
In 2022, we also continued to explore sourcing opportunities
with some local producers, as well as with foreign ones
(e.g. from Turkey), to expand our product offering in the most
popular categories and mitigate risks associated with suppliers
changing their strategy regarding our markets of operation.
Product Categories
The consumables / regular category covers products
available year-round on our shelves. First and foremost,
it consists of food, groceries, confectionary, drinks and snacks,
household goods, household chemicals, and cosmetics
and hygiene products. The general merchandise / changing
products category includes non-food products, such as toys,
stationery and books, clothing, party and celebration supplies,
as well as accessories.
Fix Price’s retail sales mix by rotation type, %
Our product assortment management approach looks
to drive both store traffic and margin growth. Products
in the consumables / regular category have historically been
key traffic drivers, given that they are products that people
tend to need on a regular basis. On the other hand, products
in the general merchandise / changing products category
have been key margin drivers, typically comprising non-food
categories with higher unit prices and higher gross margins
across the assortment.
67
33
Rotating
Regular
We offer approximately
50
new products every week,
with roughly
67 %
of the retail sales generated
by the assortment refreshed up
to six times a year
The remaining
33 %
of the retail sales are generated
by regular products such as toilet
tissue, aluminium foil, rubbish
sacks, etc., which we are unlikely
to change as customers buy
them regularly
27 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
SKU rotation
Product Range
The Company typically launches eight seasonal product
collections per year dedicated to Russian holidays such as
the New Year, Christmas, Halloween, Valentine’s Day,
1st of September (back-to-school period), 23rd of February
(Defender of the Fatherland Day), 8th of March (International
Women’s Day) and Easter, as well as gardening supplies.
By keeping Fix Price stores fresh and exciting and introducing
a treasure hunt element to our CVP, we aim to surprise
customers and encourage them to make repeat visits.
Fix Price primarily offers non-perishable food: products that
do not require refrigeration and, hence, have a longer shelf
life. This approach allows us to operate at one temperature
zone across all of our distribution centres, resulting in lower
capital expenditure requirements. Perishable food products
that require special storage conditions (such as ice cream) are
delivered by vendors directly to our stores.
The Company’s product range is built on a rigorous SKU count
intended to satisfy customer demands while at the same time
optimising inventory turnover and minimising slow-moving
stock. We have a robust “test-to-shelf” process for new SKUs,
based on a rapid decision-making process and implemented
by a highly competent procurement team. Our product
range is regularly reviewed based on market developments,
customer behaviour, information from suppliers, etc.
In 2022, we also continued to explore sourcing opportunities
with some local producers, as well as with foreign ones
(e.g. from Turkey), to expand our product offering in the most
popular categories and mitigate risks associated with suppliers
changing their strategy regarding our markets of operation.
Product Categories
The consumables / regular category covers products
available year-round on our shelves. First and foremost,
it consists of food, groceries, confectionary, drinks and snacks,
household goods, household chemicals, and cosmetics
and hygiene products. The general merchandise / changing
products category includes non-food products, such as toys,
stationery and books, clothing, party and celebration supplies,
as well as accessories.
Fix Price’s retail sales mix by rotation type, %
Our product assortment management approach looks
to drive both store traffic and margin growth. Products
in the consumables / regular category have historically been
key traffic drivers, given that they are products that people
tend to need on a regular basis. On the other hand, products
in the general merchandise / changing products category
have been key margin drivers, typically comprising non-food
categories with higher unit prices and higher gross margins
across the assortment.
67
33
Rotating
Regular
We offer approximately
50
new products every week,
with roughly
67 %
of the retail sales generated
by the assortment refreshed up
to six times a year
The remaining
33 %
of the retail sales are generated
by regular products such as toilet
tissue, aluminium foil, rubbish
sacks, etc., which we are unlikely
to change as customers buy
them regularly
27 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price’s product portfolio by category
in 2022, %
Products of major brands represent about 38% of our product
range (as a percentage of retail sales), with no-name branded
and private-label products accounting for c. 34% and c. 28%,
respectively.
Major brands
Thanks to its outstanding market position and purchasing
power, Fix Price is able to negotiate custom features for
third-party branded products with our suppliers, including
packaging, size, design, taste, weight, and much more.
Customisation and scale allow us to offer more attractive
prices to our customers. Major branded products continue
to play an important role in our offering and occupy a sizeable
section of the product mix, especially for food, cosmetics
and hygiene products.
Major brands
No-name brands
Private label
38
34
28
No-name brands
Lesser known brands and no-name products are the most
appropriate category for testing and rotation given that there
are typically no ongoing obligations to continue production
with suppliers. By offering such products, we also enjoy
additional flexibility to respond to consumer trends and needs
as we can rapidly launch new products.
Private labels
Private labels are integral to the Company’s business strategy
as they allow us to provide a broad product offering in each
consumer category and stand out from the competition.
In terms of quality and appearance, our private labels
are on par with third-party branded products widely available
in the market.
We focus on securing an exceptional pricing proposition
for our private-label brands as a result of our efficient supply
chain management and strong relations with our key
suppliers.
Fix Price has a dedicated specialist private label team that
works in our category management department to determine
the best private label product mix and in our marketing team
to determine the optimum private label advertising strategy.
We extensively promote our private labels using a number
of marketing tools. In particular, the Company has registered
several domain names dedicated specifically to our private
labels and actively promotes them on their respective
websites. The Company may occasionally rebrand particular
private labels to give well-known products a new lease of life.
Fix Price primarily sources private label products from foreign,
mainly Chinese, suppliers.
As at 2022 end, Fix Price’s private
label portfolio encompassed
approximately 60 brands
Our most popular private-label brands include:
Cotte, O'Kitchen, Flarx, Homestar, and Manfort
(consumables / regular assortment)
Play the Game and Kid’s Fantasy (toys
within the general merchandise / changing
assortment)
Greenart, With Love, and Snezhnoye
Kruzhevo (party and celebration supplies
within the general merchandise / changing
assortment)
Each of these private labels has its own development
strategy, including the specific product mix
and target customer group.
28 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
in 2022, %
Products of major brands represent about 38% of our product
range (as a percentage of retail sales), with no-name branded
and private-label products accounting for c. 34% and c. 28%,
respectively.
Major brands
Thanks to its outstanding market position and purchasing
power, Fix Price is able to negotiate custom features for
third-party branded products with our suppliers, including
packaging, size, design, taste, weight, and much more.
Customisation and scale allow us to offer more attractive
prices to our customers. Major branded products continue
to play an important role in our offering and occupy a sizeable
section of the product mix, especially for food, cosmetics
and hygiene products.
Major brands
No-name brands
Private label
38
34
28
No-name brands
Lesser known brands and no-name products are the most
appropriate category for testing and rotation given that there
are typically no ongoing obligations to continue production
with suppliers. By offering such products, we also enjoy
additional flexibility to respond to consumer trends and needs
as we can rapidly launch new products.
Private labels
Private labels are integral to the Company’s business strategy
as they allow us to provide a broad product offering in each
consumer category and stand out from the competition.
In terms of quality and appearance, our private labels
are on par with third-party branded products widely available
in the market.
We focus on securing an exceptional pricing proposition
for our private-label brands as a result of our efficient supply
chain management and strong relations with our key
suppliers.
Fix Price has a dedicated specialist private label team that
works in our category management department to determine
the best private label product mix and in our marketing team
to determine the optimum private label advertising strategy.
We extensively promote our private labels using a number
of marketing tools. In particular, the Company has registered
several domain names dedicated specifically to our private
labels and actively promotes them on their respective
websites. The Company may occasionally rebrand particular
private labels to give well-known products a new lease of life.
Fix Price primarily sources private label products from foreign,
mainly Chinese, suppliers.
As at 2022 end, Fix Price’s private
label portfolio encompassed
approximately 60 brands
Our most popular private-label brands include:
Cotte, O'Kitchen, Flarx, Homestar, and Manfort
(consumables / regular assortment)
Play the Game and Kid’s Fantasy (toys
within the general merchandise / changing
assortment)
Greenart, With Love, and Snezhnoye
Kruzhevo (party and celebration supplies
within the general merchandise / changing
assortment)
Each of these private labels has its own development
strategy, including the specific product mix
and target customer group.
28 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Pricing
We offer our products at several fixed, low price points that
resonate with our target demographic and other value-
oriented customers. In 2022, approximately 87% of our
product range was priced RUB 99 or less, including fractional
prices. Products offered at higher price points (RUB 249,
RUB 299 and RUB 349) are often referred to as “WOW”
products and encompass, for example, toys and home decor
items. The WOW products are aimed at making our customers
say to themselves: “It can’t be that cheap!”, as similar products
are usually more expensive at other retail chains and online.
~87 %
of our product range is priced under RUB 99
We aim to ensure that customers have a strong sense
of the low prices and affordable products available
at our stores at nine principal price points. The Company
continuously monitors prices for similar products offered
by other retail chains to guarantee that we have the most
attractive pricing proposition to customers.
Fix Price’s price points as % of retail sales
in 2020–2022
Fix Price’s price points as % of SKUs
in 2020–2022
149–199
50 22 11 2 14
2022
2021
2020
66 19 14 1
56 20 7 17
50–99 249–299 149–199
50 22 11 2 14
2022
2021
2020
66 19 14 1
56 20 7 17
50–99 249–299
2022
2021
2020
46 9 3 0.5 41 1
53 19 8 19
62 16 20 2
Fractional 349 Other
1
2022
2021
2020
46 9 3 0.5 41 1
53 19 8 19
62 16 20 2
Fractional 349 Other
1
Multiple price points allow us to be more flexible
in responding to the changing market environment
by introducing new SKUs at higher price points or
by optimising the cost base. If an existing SKU’s margin is not
strong enough, our approach is to review the relevant product
by introducing a slightly different item at a higher price
point or to keep the same price point but optimise the SKU’s
cost base by focusing on packaging costs and product
quantity characteristics without compromising on quality.
We have fostered strong expertise in how to use these
tools efficiently to maintain quick inventory turnover
and continuous assortment rotation.
Our assortment decisions are based on an in-depth
analysis of historical data and forecasting. When setting
prices for products, we consider market developments
and customer behaviour. Fix Price has also been able
to achieve significant cost efficiencies to support our pricing
as a result of our effective use of logistics infrastructure.
Convenient Shopping
Experience and Customer
Satisfaction
We aim to open stores in locations where we can benefit
from convenient access and high footfall. We strive
for a carefully tailored, engaging and pleasant in-store
atmosphere which enhances the shopping experience
and reinforces our price image.
According to a Vector Study conducted in 2022, Fix Price
enjoys a high Net Promoter Score (“NPS”, a metric that
measures the willingness of customers to recommend
products or services of a company to others) of 60%. We have
some of the industry’s leading NPS scores, with our customers
expressing high levels of satisfaction with Fix Price stores in
terms of in-store experience (service, cleanliness, etc.), and 89%
of respondents satisfied with our store format in general.
60 %
Net Promoter Score
89 %
of respondents were satisfied
with our store format
1 Due to rounding, the sum of price points as % of retail sales and SKUs may not be equal to 100%
1 1
29 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
We offer our products at several fixed, low price points that
resonate with our target demographic and other value-
oriented customers. In 2022, approximately 87% of our
product range was priced RUB 99 or less, including fractional
prices. Products offered at higher price points (RUB 249,
RUB 299 and RUB 349) are often referred to as “WOW”
products and encompass, for example, toys and home decor
items. The WOW products are aimed at making our customers
say to themselves: “It can’t be that cheap!”, as similar products
are usually more expensive at other retail chains and online.
~87 %
of our product range is priced under RUB 99
We aim to ensure that customers have a strong sense
of the low prices and affordable products available
at our stores at nine principal price points. The Company
continuously monitors prices for similar products offered
by other retail chains to guarantee that we have the most
attractive pricing proposition to customers.
Fix Price’s price points as % of retail sales
in 2020–2022
Fix Price’s price points as % of SKUs
in 2020–2022
149–199
50 22 11 2 14
2022
2021
2020
66 19 14 1
56 20 7 17
50–99 249–299 149–199
50 22 11 2 14
2022
2021
2020
66 19 14 1
56 20 7 17
50–99 249–299
2022
2021
2020
46 9 3 0.5 41 1
53 19 8 19
62 16 20 2
Fractional 349 Other
1
2022
2021
2020
46 9 3 0.5 41 1
53 19 8 19
62 16 20 2
Fractional 349 Other
1
Multiple price points allow us to be more flexible
in responding to the changing market environment
by introducing new SKUs at higher price points or
by optimising the cost base. If an existing SKU’s margin is not
strong enough, our approach is to review the relevant product
by introducing a slightly different item at a higher price
point or to keep the same price point but optimise the SKU’s
cost base by focusing on packaging costs and product
quantity characteristics without compromising on quality.
We have fostered strong expertise in how to use these
tools efficiently to maintain quick inventory turnover
and continuous assortment rotation.
Our assortment decisions are based on an in-depth
analysis of historical data and forecasting. When setting
prices for products, we consider market developments
and customer behaviour. Fix Price has also been able
to achieve significant cost efficiencies to support our pricing
as a result of our effective use of logistics infrastructure.
Convenient Shopping
Experience and Customer
Satisfaction
We aim to open stores in locations where we can benefit
from convenient access and high footfall. We strive
for a carefully tailored, engaging and pleasant in-store
atmosphere which enhances the shopping experience
and reinforces our price image.
According to a Vector Study conducted in 2022, Fix Price
enjoys a high Net Promoter Score (“NPS”, a metric that
measures the willingness of customers to recommend
products or services of a company to others) of 60%. We have
some of the industry’s leading NPS scores, with our customers
expressing high levels of satisfaction with Fix Price stores in
terms of in-store experience (service, cleanliness, etc.), and 89%
of respondents satisfied with our store format in general.
60 %
Net Promoter Score
89 %
of respondents were satisfied
with our store format
1 Due to rounding, the sum of price points as % of retail sales and SKUs may not be equal to 100%
1 1
29 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fast-growing Loyalty Programme with
Highly Attractive Benefits
Fix Price has a popular and effective customer loyalty
programme with around 21.9 million registered cardholders.
In 2022, the total number of registered programme members
increased by 4.9 million (or 29%), with transactions using
loyalty cards accounting for 56% of retail sales, 1 on the back
of advertising and promotional campaigns for the members.
The share of active users 2 was 54%, creating a win-win
scenario for customers and the Company.
~22 million
registered cardholders
The average ticket of loyalty cardholders was approximately
1.8x higher than the average ticket of non-cardholders
in 2022, while loyalty programme members visited our stores
on average 15% more often than other customers. According
to the Vector Study, Fix Price loyalty cardholders visit our
stores four times a month on average. The benefits that
the loyalty programme offers also translate to high levels
of Fix Price brand recognition among our clients.
1 Loyalty programme data are calculated for Fix Price stores operating in Russia
2 Loyalty programme members who make at least one purchase per month
We offer our customers to buy cards at checkout for RUB
55 or register a virtual loyalty card via our mobile app or on
our website. This allows them to earn up to 30% of their total
spend as bonus points, which they can store and spend
to obtain an up to 50% discount on their next purchases. Each
Fix Price store sells approximately four loyalty cards per day.
Cardholders are also put in the running for exclusive offers.
The programme enables cardholders to participate in various
promotions and partner offers as well as to take advantage
of tailored offers, including extra bonus points on their
favourite products and one-off bonus points from various Fix
Price events.
We regularly communicate with our loyalty programme
members via e-mail, text message and push notification,
and we also run surveys for new products, pricing
and much more. The purchase history of cardholders offers
the Company valuable insights, and we use it to identify
spending patterns, receive instant feedback and make
data-driven marketing strategy decisions aimed at further
increasing customer satisfaction and driving sales growth.
Loyalty cardholders’
average ticket is 1.8x higher
than the average ticket
of non-holders
30 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Highly Attractive Benefits
Fix Price has a popular and effective customer loyalty
programme with around 21.9 million registered cardholders.
In 2022, the total number of registered programme members
increased by 4.9 million (or 29%), with transactions using
loyalty cards accounting for 56% of retail sales, 1 on the back
of advertising and promotional campaigns for the members.
The share of active users 2 was 54%, creating a win-win
scenario for customers and the Company.
~22 million
registered cardholders
The average ticket of loyalty cardholders was approximately
1.8x higher than the average ticket of non-cardholders
in 2022, while loyalty programme members visited our stores
on average 15% more often than other customers. According
to the Vector Study, Fix Price loyalty cardholders visit our
stores four times a month on average. The benefits that
the loyalty programme offers also translate to high levels
of Fix Price brand recognition among our clients.
1 Loyalty programme data are calculated for Fix Price stores operating in Russia
2 Loyalty programme members who make at least one purchase per month
We offer our customers to buy cards at checkout for RUB
55 or register a virtual loyalty card via our mobile app or on
our website. This allows them to earn up to 30% of their total
spend as bonus points, which they can store and spend
to obtain an up to 50% discount on their next purchases. Each
Fix Price store sells approximately four loyalty cards per day.
Cardholders are also put in the running for exclusive offers.
The programme enables cardholders to participate in various
promotions and partner offers as well as to take advantage
of tailored offers, including extra bonus points on their
favourite products and one-off bonus points from various Fix
Price events.
We regularly communicate with our loyalty programme
members via e-mail, text message and push notification,
and we also run surveys for new products, pricing
and much more. The purchase history of cardholders offers
the Company valuable insights, and we use it to identify
spending patterns, receive instant feedback and make
data-driven marketing strategy decisions aimed at further
increasing customer satisfaction and driving sales growth.
Loyalty cardholders’
average ticket is 1.8x higher
than the average ticket
of non-holders
30 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
Based on publicly available information
2 Based on Vector Market Research’s studies performed in autumn 2022
and autumn 2021 of Fix Price’s target customer base in cities with
a population of over 1 million people
Focus on Customers
At Fix Price, we put our customers first and keep them at the heart of all our decisions. Our team has
substantial experience and strives to deliver an offering to our customers that is attractive and good
value in terms of price, product range, quality, availability, service, and shopping experience.
Fix Price’s Target Market and Consumer Trends
The typical Fix Price store primarily targets families
with children and middle- and low-income customers. Our
value proposition is designed in a way to encompass people
with a monthly income under RUB 45,000 (approximately
70% of the Russian population based on Rosstat data 1
), while
we continue to attract higher-income customers thanks
to our broad product range and offering of WOW products.
The share of these customers in 2022 was 4 pps 2 higher than
in 2021.
Women remained the majority of shoppers in our stores
(68% of the audience), while married women aged 25 to 55
with one or two children made up the core group (>56%)
within this target market. 3 Certain customer categories grew
in 2022 versus 2021: for example, the share of white-collar
workers and managers increased by 4 pps each and the share
of pensioners increased by 3 pps. 2
Consumer behaviour continued to evolve in 2022, as pressure
on households’ real disposable income paved the way
for more rational shopping and trading down, while price
sensitivity rose noticeably. Fix Price is becoming a top pick
amid the prevailing consumer sentiment due to our low
price offering and extensive product range proposition.
A 2022 NielsenIQ Survey 4 highlights the subsequent changes
in the consumer behaviour of Russian customers: 61%
of customers tend to choose stores with low prices, 41% look
for discounted products, 37% focus on basic consumables
while limiting spending, and 26% lean towards cheaper
brands. Based on Vector Market Research surveys, 83%
of shoppers would consider visiting our stores because
of our low price offering which remains, alongside our
wide assortment, the primary reason why they would
recommend us.
Occupation
Share of office workers and managers
increased by 4 pps each in 2022 compared to 2021
Share of pensioners increased by 3 pps
in 2022 compared to 2021
Office workers Students Blue-collar Pensioners
3 Fix Price internal research on the loyalty programme for the 1st half of 2022
4 NielsenIQ: Key trends in the FMCG market 2022
32 %
Men
68 %
Women
Married 25–55 years 1–2 children
56% of women in our core audience are: 3
31 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2 Based on Vector Market Research’s studies performed in autumn 2022
and autumn 2021 of Fix Price’s target customer base in cities with
a population of over 1 million people
Focus on Customers
At Fix Price, we put our customers first and keep them at the heart of all our decisions. Our team has
substantial experience and strives to deliver an offering to our customers that is attractive and good
value in terms of price, product range, quality, availability, service, and shopping experience.
Fix Price’s Target Market and Consumer Trends
The typical Fix Price store primarily targets families
with children and middle- and low-income customers. Our
value proposition is designed in a way to encompass people
with a monthly income under RUB 45,000 (approximately
70% of the Russian population based on Rosstat data 1
), while
we continue to attract higher-income customers thanks
to our broad product range and offering of WOW products.
The share of these customers in 2022 was 4 pps 2 higher than
in 2021.
Women remained the majority of shoppers in our stores
(68% of the audience), while married women aged 25 to 55
with one or two children made up the core group (>56%)
within this target market. 3 Certain customer categories grew
in 2022 versus 2021: for example, the share of white-collar
workers and managers increased by 4 pps each and the share
of pensioners increased by 3 pps. 2
Consumer behaviour continued to evolve in 2022, as pressure
on households’ real disposable income paved the way
for more rational shopping and trading down, while price
sensitivity rose noticeably. Fix Price is becoming a top pick
amid the prevailing consumer sentiment due to our low
price offering and extensive product range proposition.
A 2022 NielsenIQ Survey 4 highlights the subsequent changes
in the consumer behaviour of Russian customers: 61%
of customers tend to choose stores with low prices, 41% look
for discounted products, 37% focus on basic consumables
while limiting spending, and 26% lean towards cheaper
brands. Based on Vector Market Research surveys, 83%
of shoppers would consider visiting our stores because
of our low price offering which remains, alongside our
wide assortment, the primary reason why they would
recommend us.
Occupation
Share of office workers and managers
increased by 4 pps each in 2022 compared to 2021
Share of pensioners increased by 3 pps
in 2022 compared to 2021
Office workers Students Blue-collar Pensioners
3 Fix Price internal research on the loyalty programme for the 1st half of 2022
4 NielsenIQ: Key trends in the FMCG market 2022
32 %
Men
68 %
Women
Married 25–55 years 1–2 children
56% of women in our core audience are: 3
31 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Quality Control
We focus on providing our customers with reliable, decent
quality products. Our priority is to verify that production
environments are safe and comply with quality control
requirements. We conduct audits of the production
facilities operated by our private label suppliers. Fix Price
has a thorough quality control system based on a range
of internal policies and regulations.
In line with these policies and regulations, Fix Price has
established strict control procedures whereby we carefully
monitor the quality of products on our store shelves and verify
it at all stages, from production lines to distribution centres.
We monitor supplier production facilities and processes,
arrange laboratory testing and tasting of products
and promptly investigate customer complaints.
We implement our quality controls both centrally, as products
flow through our supply chain system, and locally, as products
are placed on store shelves. Products that do not conform
with our standards are quickly identified and dealt with.
We have also established customer complaint
and remediation process systems to ensure that incidents
related to quality serve as a trigger for joint reviews
with suppliers, if required. Fix Price provides a customer
complaint hotline, and customers can also submit their
claims via the Group’s website.
Please see Product on page 61 for details
Store Layout
Fix Price has developed and employs standardised
and consistent layouts and designs for our stores to facilitate
an easy and convenient shopping experience. Our stores have
an open-plan layout with clean and well-lit interiors combined
with clear and informative signage which are designed to help
customers navigate easily. Products are laid out in several easily
accessible zones according to their product category, including
non-food, drogerie and food, in a pattern that is replicated
across the whole network.
Our store format is designed to ensure clear price
communication and includes visually attractive displays that
are prominently located. In addition, everything is designed
to encourage cross-selling, enhance the treasure-hunt
experience and create “wow” moments for customers.
For example, dedicated shelves marked “WOW” feature
an assortment offered at extremely attractive prices triggering
the impulse to buy immediately – creating a “grab-and-run”
effect as such products sell like hot cakes. Essentials
are typically placed at the back to encourage customers
to walk through the whole store. The vast majority of our
stores have 75 product display shelves.
This standardisation not only facilitates efficient
merchandising management and contributes to efficiency
in stock control, but also creates a consistent offering that
is familiar and recognisable to our customers.
We seek to minimise customer queuing times by ensuring that
a sufficient number of checkouts are open to serve customers
at any point in time, with a typical store having two to three
cash registers in operation simultaneously. Newly opened
stores are typically equipped with self-service checkouts,
which also helps shorten checkout queues, process payments
faster and reduce staff workload during peak hours.
Our Audience
83 %
of customers choose
Fix Price due to low price
offering alongside wide
assortment
Consumer
Behaviour
of Russian
Customers in 2022
61 %
of customers tend to choose
stores with low prices
37 %
focus on basic consumables
while limiting spending
26 %
lean towards cheaper brands
32 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
We focus on providing our customers with reliable, decent
quality products. Our priority is to verify that production
environments are safe and comply with quality control
requirements. We conduct audits of the production
facilities operated by our private label suppliers. Fix Price
has a thorough quality control system based on a range
of internal policies and regulations.
In line with these policies and regulations, Fix Price has
established strict control procedures whereby we carefully
monitor the quality of products on our store shelves and verify
it at all stages, from production lines to distribution centres.
We monitor supplier production facilities and processes,
arrange laboratory testing and tasting of products
and promptly investigate customer complaints.
We implement our quality controls both centrally, as products
flow through our supply chain system, and locally, as products
are placed on store shelves. Products that do not conform
with our standards are quickly identified and dealt with.
We have also established customer complaint
and remediation process systems to ensure that incidents
related to quality serve as a trigger for joint reviews
with suppliers, if required. Fix Price provides a customer
complaint hotline, and customers can also submit their
claims via the Group’s website.
Please see Product on page 61 for details
Store Layout
Fix Price has developed and employs standardised
and consistent layouts and designs for our stores to facilitate
an easy and convenient shopping experience. Our stores have
an open-plan layout with clean and well-lit interiors combined
with clear and informative signage which are designed to help
customers navigate easily. Products are laid out in several easily
accessible zones according to their product category, including
non-food, drogerie and food, in a pattern that is replicated
across the whole network.
Our store format is designed to ensure clear price
communication and includes visually attractive displays that
are prominently located. In addition, everything is designed
to encourage cross-selling, enhance the treasure-hunt
experience and create “wow” moments for customers.
For example, dedicated shelves marked “WOW” feature
an assortment offered at extremely attractive prices triggering
the impulse to buy immediately – creating a “grab-and-run”
effect as such products sell like hot cakes. Essentials
are typically placed at the back to encourage customers
to walk through the whole store. The vast majority of our
stores have 75 product display shelves.
This standardisation not only facilitates efficient
merchandising management and contributes to efficiency
in stock control, but also creates a consistent offering that
is familiar and recognisable to our customers.
We seek to minimise customer queuing times by ensuring that
a sufficient number of checkouts are open to serve customers
at any point in time, with a typical store having two to three
cash registers in operation simultaneously. Newly opened
stores are typically equipped with self-service checkouts,
which also helps shorten checkout queues, process payments
faster and reduce staff workload during peak hours.
Our Audience
83 %
of customers choose
Fix Price due to low price
offering alongside wide
assortment
Consumer
Behaviour
of Russian
Customers in 2022
61 %
of customers tend to choose
stores with low prices
37 %
focus on basic consumables
while limiting spending
26 %
lean towards cheaper brands
32 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
RUB
199
“This is a great bargain!”
RUB 99
“I just needed to get
a shampoo...”
1
2
3
4
5
6
7
8
RUB 199
“Wow, no way the price
can be that low!”
RUB 167
“Better stock up on soap
and toilet paper!”
RUB 99
“Great, this place has
wet wipes and they don` t
cost a fortune!”
RUB 29.5
“So much shopping done...
I deserve a snack!”
RUB 349
“Doesn` t this look great?
It`s comfy and trendy!”
RUB 83
“I guess I did promise
to buy milk...
Oat milk is even better”
Flowers Seasonal goods
Celebration Decoration
Entry
Cashier
Cleaning Clothing accessories Household chemicals
Haberdashery
Toys Pet accessories
Hair accessories
Cosmetics 2
Hygiene 3
Toilet paper Textile
Clothes hangers
Bath accessories 6
Confectionery
Groceries
Milk products
Canned food
Juices Snacks
Water Beer
7 8
Hosiery
Underwear Kids wear Clothes 4
Food Non-food Drogerie
WOW 1
Electro
Office supply
Repair
Books
Auto
50% sale
Mugs
5 Kitchen accessories Tableware
Overview of a Typical Fix Price Store Layout
33 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
“This is a great bargain!”
RUB 99
“I just needed to get
a shampoo...”
1
2
3
4
5
6
7
8
RUB 199
“Wow, no way the price
can be that low!”
RUB 167
“Better stock up on soap
and toilet paper!”
RUB 99
“Great, this place has
wet wipes and they don` t
cost a fortune!”
RUB 29.5
“So much shopping done...
I deserve a snack!”
RUB 349
“Doesn` t this look great?
It`s comfy and trendy!”
RUB 83
“I guess I did promise
to buy milk...
Oat milk is even better”
Flowers Seasonal goods
Celebration Decoration
Entry
Cashier
Cleaning Clothing accessories Household chemicals
Haberdashery
Toys Pet accessories
Hair accessories
Cosmetics 2
Hygiene 3
Toilet paper Textile
Clothes hangers
Bath accessories 6
Confectionery
Groceries
Milk products
Canned food
Juices Snacks
Water Beer
7 8
Hosiery
Underwear Kids wear Clothes 4
Food Non-food Drogerie
WOW 1
Electro
Office supply
Repair
Books
Auto
50% sale
Mugs
5 Kitchen accessories Tableware
Overview of a Typical Fix Price Store Layout
33 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Marketing and Advertising
Fix Price’s marketing strategy is focused on driving store traffic
within our target audience as well as other value-oriented
customers. This approach taps into a wide range of marketing
channels, including television advertising, printed materials, point
of sale materials (POSM), outdoor advertising, online advertising,
event marketing, as well as our customer loyalty programme.
The Company leverages cost-efficient marketing
and advertising campaigns, employing a tailored promotional
strategy driven by our target market segmentation and using
relevant communication channels to reach these segments.
Our well-run in-house production of advertising content and
promotional activities enables us to manage several dozen
promotions at once while being able to launch extra activities
within the shortest timeframe (1 to 5 days). We are present on all
major social media platforms, such as VK, YouTube, Telegram
and others, and engage customers with our compelling digital
content which is created on a regular basis. We also benefit
from the content created by our customers to reflect their own
experiences of shopping in Fix Price stores, such as the millions
of videos created and uploaded by customers themselves
to various social media groups. This free word of mouth via
social media supports our marketing activity.
In 2022, the total number of the Company’s social media
followers exceeded 4 million. Fix Price’s digital presence,
therefore, significantly contributes to our ability to carry out
effective marketing at minimal spend.
In 2022, we continued to work on optimising our customer
website, which was positively received by customers
and allowed us to standardise some of our promotional
activities and to provide more control options for loyalty
cardholders.
Fix Price also uses other marketing tools — such as
communicating with social media influencers — to expand
our reach with customers, further facilitate brand recognition
and increase brand loyalty. In addition, we actively engage
with younger audiences to attract higher-income customers
by using new marketing channels, improving the visual
content of our products and packaging, as well as leveraging
feedback to personalise marketing efforts.
E-Commerce Development
In order to reach a broader audience of more affluent
customers, Fix Price continues to test various ways
of improving its shopping experience to make it more
comfortable for customers. In 2018, we were a pioneer of
the "buy online, pick up in store" model in the Russian retail
market. Over the past few years, we have seen growing
interest in our online service, which has consistently posted
solid results. In 2022, our customers placed over 1 million
orders online, 2.3x higher than in 2021.
Customers order products via our website or mobile app
and can choose from multiple delivery options, including
store-to-door delivery through our partners and collection
from pick-up points in stores.
The most popular delivery option has been self-pick-up,
as customers prefer to collect their orders from the nearest
conveniently located store. On top of this, upgrades
to Fix Price mobile apps in 2022 were warmly welcomed
by customers — in December 2022, 78% of total via
click-and-collect orders were made in Fix Price mobile apps.
Fix Price mobile app is a powerful tool to reach out
to our target audiences, allowing customers to view
our product range online and accumulate loyalty
points. The number of active users of our mobile
app almost doubled for Android devices and tripled
for Apple iOS in 2022
34 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price’s marketing strategy is focused on driving store traffic
within our target audience as well as other value-oriented
customers. This approach taps into a wide range of marketing
channels, including television advertising, printed materials, point
of sale materials (POSM), outdoor advertising, online advertising,
event marketing, as well as our customer loyalty programme.
The Company leverages cost-efficient marketing
and advertising campaigns, employing a tailored promotional
strategy driven by our target market segmentation and using
relevant communication channels to reach these segments.
Our well-run in-house production of advertising content and
promotional activities enables us to manage several dozen
promotions at once while being able to launch extra activities
within the shortest timeframe (1 to 5 days). We are present on all
major social media platforms, such as VK, YouTube, Telegram
and others, and engage customers with our compelling digital
content which is created on a regular basis. We also benefit
from the content created by our customers to reflect their own
experiences of shopping in Fix Price stores, such as the millions
of videos created and uploaded by customers themselves
to various social media groups. This free word of mouth via
social media supports our marketing activity.
In 2022, the total number of the Company’s social media
followers exceeded 4 million. Fix Price’s digital presence,
therefore, significantly contributes to our ability to carry out
effective marketing at minimal spend.
In 2022, we continued to work on optimising our customer
website, which was positively received by customers
and allowed us to standardise some of our promotional
activities and to provide more control options for loyalty
cardholders.
Fix Price also uses other marketing tools — such as
communicating with social media influencers — to expand
our reach with customers, further facilitate brand recognition
and increase brand loyalty. In addition, we actively engage
with younger audiences to attract higher-income customers
by using new marketing channels, improving the visual
content of our products and packaging, as well as leveraging
feedback to personalise marketing efforts.
E-Commerce Development
In order to reach a broader audience of more affluent
customers, Fix Price continues to test various ways
of improving its shopping experience to make it more
comfortable for customers. In 2018, we were a pioneer of
the "buy online, pick up in store" model in the Russian retail
market. Over the past few years, we have seen growing
interest in our online service, which has consistently posted
solid results. In 2022, our customers placed over 1 million
orders online, 2.3x higher than in 2021.
Customers order products via our website or mobile app
and can choose from multiple delivery options, including
store-to-door delivery through our partners and collection
from pick-up points in stores.
The most popular delivery option has been self-pick-up,
as customers prefer to collect their orders from the nearest
conveniently located store. On top of this, upgrades
to Fix Price mobile apps in 2022 were warmly welcomed
by customers — in December 2022, 78% of total via
click-and-collect orders were made in Fix Price mobile apps.
Fix Price mobile app is a powerful tool to reach out
to our target audiences, allowing customers to view
our product range online and accumulate loyalty
points. The number of active users of our mobile
app almost doubled for Android devices and tripled
for Apple iOS in 2022
34 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
BUSINESS
OVERVIEW
Fix Price has underpinned its strength and leadership in Russian
variety value retail in 2022, massively expanding operations
across Russia and neighbouring countries. The total number
of Fix Price stores grew by 759 in 2022 to 5,663 outlets. We
increased revenue by 20.5% and posted a record EBITDA margin
of 19.5%, exceeding the guidance we gave during our 2021 IPO
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
OVERVIEW
Fix Price has underpinned its strength and leadership in Russian
variety value retail in 2022, massively expanding operations
across Russia and neighbouring countries. The total number
of Fix Price stores grew by 759 in 2022 to 5,663 outlets. We
increased revenue by 20.5% and posted a record EBITDA margin
of 19.5%, exceeding the guidance we gave during our 2021 IPO
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
LFL sales, average ticket and number of tickets are calculated based on figures from stores operated by Fix Price that have been open for at least
12 full calendar months preceding the reporting date. LFL sales and average ticket are calculated based on retail revenue gross of VAT. LFL figures
exclude stores that were temporarily closed for seven or more consecutive days during the reporting period and the comparable period
2 LFL sales and average ticket adjusted for the appreciation of the rouble are calculated using monthly LFL sales in foreign countries converted
into roubles at the average exchange rates for each comparable month of 2021
Operating Review
Despite a challenging market and turbulent geopolitical environment, Fix Price
underpinned its strength and leadership in Russian variety value retail in 2022,
massively expanding operations across Russia and neighbouring countries.
FY 2022 Revenue and LFL Sales Growth
Fix Price’s FY 2022 total revenue increased by 20.5%
year-on-year to RUB 277.6 billion, driven by store network
expansion and like-for-like (LFL, same-store) sales growth. 1
The Company’s retail revenue rose 21.1% year-on-year
to RUB 246.2 billion, while wholesale revenue grew by 15.8%
year-on-year to RUB 31.4 billion. The average basket size
at Company-operated stores for FY 2022 reached RUB 325,
up 13.1% year-on-year, also driven by the successful
management of the assortment and price point mix.
Cautious consumer behaviour amid the continued
macroeconomic uncertainty and falling real disposable
income put pressure on the Company’s LFL traffic in 2022.
Nevertheless, our flexible business model, ability to adjust
to an ever-changing environment and customer preferences,
fast assortment rotation, affordable value proposition,
and the increase in the share of higher price points in retail
sales all helped deliver solid LFL ticket performance.
LFL sales adjusted for the appreciation of the rouble 2 grew
by 11.0% (10.1% before the adjustment) year-on-year in FY 2022,
in line with the initial IPO guidance, as the Company’s business
model yet again proved successful despite external headwinds.
The LFL average ticket adjusted for the appreciation
of the rouble 2 was up 13.9% (12.9% before the adjustment)
in FY 2022.
The Company’s LFL traffic decreased by 2.5% as the turbulent
macroeconomic situation weighed on consumer sentiment.
LFL sales of Company-operated stores in Russia were up
12.2% in FY 2022. LFL sales in Kazakhstan and Belarus
were negatively affected by the currency-conversion
effect amid the appreciation of the rouble. In their local
currency, stores in Belarus posted solid results, which
were somewhat impacted by a decline in assortment
following the government’s resolution to limit trade markups.
LFL performance in Kazakhstan slipped during Q4 2022 due
to lower consumer demand amid inflationary pressure.
Key
Achievements
in FY 2022:
759
Net store openings
20.5%
Revenue growth
y-o-y
11.0%
LFL sales 2
28.7%
Loyal customer
base growth y-o-y
36 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
12 full calendar months preceding the reporting date. LFL sales and average ticket are calculated based on retail revenue gross of VAT. LFL figures
exclude stores that were temporarily closed for seven or more consecutive days during the reporting period and the comparable period
2 LFL sales and average ticket adjusted for the appreciation of the rouble are calculated using monthly LFL sales in foreign countries converted
into roubles at the average exchange rates for each comparable month of 2021
Operating Review
Despite a challenging market and turbulent geopolitical environment, Fix Price
underpinned its strength and leadership in Russian variety value retail in 2022,
massively expanding operations across Russia and neighbouring countries.
FY 2022 Revenue and LFL Sales Growth
Fix Price’s FY 2022 total revenue increased by 20.5%
year-on-year to RUB 277.6 billion, driven by store network
expansion and like-for-like (LFL, same-store) sales growth. 1
The Company’s retail revenue rose 21.1% year-on-year
to RUB 246.2 billion, while wholesale revenue grew by 15.8%
year-on-year to RUB 31.4 billion. The average basket size
at Company-operated stores for FY 2022 reached RUB 325,
up 13.1% year-on-year, also driven by the successful
management of the assortment and price point mix.
Cautious consumer behaviour amid the continued
macroeconomic uncertainty and falling real disposable
income put pressure on the Company’s LFL traffic in 2022.
Nevertheless, our flexible business model, ability to adjust
to an ever-changing environment and customer preferences,
fast assortment rotation, affordable value proposition,
and the increase in the share of higher price points in retail
sales all helped deliver solid LFL ticket performance.
LFL sales adjusted for the appreciation of the rouble 2 grew
by 11.0% (10.1% before the adjustment) year-on-year in FY 2022,
in line with the initial IPO guidance, as the Company’s business
model yet again proved successful despite external headwinds.
The LFL average ticket adjusted for the appreciation
of the rouble 2 was up 13.9% (12.9% before the adjustment)
in FY 2022.
The Company’s LFL traffic decreased by 2.5% as the turbulent
macroeconomic situation weighed on consumer sentiment.
LFL sales of Company-operated stores in Russia were up
12.2% in FY 2022. LFL sales in Kazakhstan and Belarus
were negatively affected by the currency-conversion
effect amid the appreciation of the rouble. In their local
currency, stores in Belarus posted solid results, which
were somewhat impacted by a decline in assortment
following the government’s resolution to limit trade markups.
LFL performance in Kazakhstan slipped during Q4 2022 due
to lower consumer demand amid inflationary pressure.
Key
Achievements
in FY 2022:
759
Net store openings
20.5%
Revenue growth
y-o-y
11.0%
LFL sales 2
28.7%
Loyal customer
base growth y-o-y
36 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Revenue and LFL sales
1
, change y-o-y, Q1–Q4 2022, %
Q1 Q2 Q3 Q4
Revenue 21.2% 27.0% 21.2% 13.9%
LFL sales 11.6% 15.4% 12.9% 2 5.2% 2
LFL sales, traffic and the average ticket
adjusted for the rouble appreciation effect,
change y-o-y, FY 2020–FY 2022, %
LFL sales LFL traffic LFL average ticket
2022 2
11.0
(2.5)
13.9
2021
7.2
3.1
4.0
2020
15.8
(1.7)
17.8
LFL sales LFL traffic LFL average ticket
2022
10.1
(2.5)
12.9
2021
7.2
3.1
4.0
2020
15.8
(1.7)
17.8
LFL sales, traffic and the average ticket before
the adjustment for the rouble appreciation
effect, change y-o-y, FY 2020–FY 2022, %
The total number of Fix Price stores grew by 759 on a net basis
in 2022 (of which 671 were Company-operated and 88 were
franchised), which exceeds the previously announced
guidance of 750 net openings for 2022. The total number
of Fix Price stores reached 5,663 outlets, a 15.5% increase
year-on-year.
The franchise stores amounted to 11.0% of the total store
count (up 9 bps year-on-year).
A total 111 Company-operated stores were closed in 2022,
versus 123 stores in 2021. Most closures were driven by lease
rationalisation.
The total selling space of stores operating under the Fix Price
brand increased by 168.5 thousand sq.m, or by 15.9%
year-on-year, and reached 1,225 thousand sq.m.
The average selling space per Fix Price store was 216 sq.m
in 2022, flat on 2021.
By the end of FY 2022, Fix Price had a presence in 80
of Russia’s regions, while we added 132 new Russian towns
and cities to our store network coverage.
Fix Price continued its expansion not just across Russia,
but also internationally: 14.0% of net openings in 2022 were
in locations outside of Russia. The share of international stores
grew to 10.0% of the total store base from 9.4% in 2021.
In January 2023, Fix Price opened its first franchise stores
in Mongolia — our eighth country. In the next few months,
we will focus on testing and tailoring the Company’s business
model to the specifics of the Mongolian market.
Looking ahead, we aim to maintain the pace of our
store network expansion to further improve operational
and financial performance, with plans to open approximately
750 net new stores in 2023.
Network Expansion
1 LFL sales, average ticket and number of tickets are calculated based on figures from stores operated by Fix Price that have been open for at least
12 full calendar months preceding the reporting date. LFL sales and average ticket are calculated based on retail revenue gross of VAT. LFL figures
exclude stores that were temporarily closed for seven or more consecutive days during the reporting period and the comparable period
2 LFL sales and average ticket adjusted for the appreciation of the rouble are calculated using monthly LFL sales in foreign countries converted into
roubles at the average exchange rates for each comparable month of 2021
37 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
, change y-o-y, Q1–Q4 2022, %
Q1 Q2 Q3 Q4
Revenue 21.2% 27.0% 21.2% 13.9%
LFL sales 11.6% 15.4% 12.9% 2 5.2% 2
LFL sales, traffic and the average ticket
adjusted for the rouble appreciation effect,
change y-o-y, FY 2020–FY 2022, %
LFL sales LFL traffic LFL average ticket
2022 2
11.0
(2.5)
13.9
2021
7.2
3.1
4.0
2020
15.8
(1.7)
17.8
LFL sales LFL traffic LFL average ticket
2022
10.1
(2.5)
12.9
2021
7.2
3.1
4.0
2020
15.8
(1.7)
17.8
LFL sales, traffic and the average ticket before
the adjustment for the rouble appreciation
effect, change y-o-y, FY 2020–FY 2022, %
The total number of Fix Price stores grew by 759 on a net basis
in 2022 (of which 671 were Company-operated and 88 were
franchised), which exceeds the previously announced
guidance of 750 net openings for 2022. The total number
of Fix Price stores reached 5,663 outlets, a 15.5% increase
year-on-year.
The franchise stores amounted to 11.0% of the total store
count (up 9 bps year-on-year).
A total 111 Company-operated stores were closed in 2022,
versus 123 stores in 2021. Most closures were driven by lease
rationalisation.
The total selling space of stores operating under the Fix Price
brand increased by 168.5 thousand sq.m, or by 15.9%
year-on-year, and reached 1,225 thousand sq.m.
The average selling space per Fix Price store was 216 sq.m
in 2022, flat on 2021.
By the end of FY 2022, Fix Price had a presence in 80
of Russia’s regions, while we added 132 new Russian towns
and cities to our store network coverage.
Fix Price continued its expansion not just across Russia,
but also internationally: 14.0% of net openings in 2022 were
in locations outside of Russia. The share of international stores
grew to 10.0% of the total store base from 9.4% in 2021.
In January 2023, Fix Price opened its first franchise stores
in Mongolia — our eighth country. In the next few months,
we will focus on testing and tailoring the Company’s business
model to the specifics of the Mongolian market.
Looking ahead, we aim to maintain the pace of our
store network expansion to further improve operational
and financial performance, with plans to open approximately
750 net new stores in 2023.
Network Expansion
1 LFL sales, average ticket and number of tickets are calculated based on figures from stores operated by Fix Price that have been open for at least
12 full calendar months preceding the reporting date. LFL sales and average ticket are calculated based on retail revenue gross of VAT. LFL figures
exclude stores that were temporarily closed for seven or more consecutive days during the reporting period and the comparable period
2 LFL sales and average ticket adjusted for the appreciation of the rouble are calculated using monthly LFL sales in foreign countries converted into
roubles at the average exchange rates for each comparable month of 2021
37 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price store portfolio expansion
,
number of stores
4,368 536
5,039 624
3,742 425
5,663 2022
2021
2020
Company-operated stores Franchise stores
4,904
4,167
Company-operated stores
938 118
1,087 138
797 92
1,225 2022
2021 1
2020 1
Company-operated
store space
Franchise store space
1,057
890
Fix Price selling space expansion,
thous. sq.m
Assortment and Category Mix
In 2022 we kept creating a strong alignment
between a value-driven merchandise and customer demand.
We were cautious in introducing new assortment at higher
price points, while carefully tweaking and innovating
products. The share of price points above RUB 199 in retail
sales grew to 13.3% in 2022 from 7.2% in 2021. A total of 86.8%
of our SKUs were cheaper than RUB 99.
In 2022, Fix Price started testing a new price point of RUB 349,
with its share of retail sales reaching 2.3% in 2022.
The category mix in the reporting period was skewed towards
essential goods, as consumers were conservative in their
buying patterns amidst growing macroeconomic uncertainty,
while Fix Price succeeded in sourcing exciting products
at attractive prices.
The share of food in retail sales remained almost flat on 2021
at 28.1% in 2022. The share of drogerie (household chemicals
and hygiene products) in retail sales grew by 4.8 pps to 26.7%,
due to strong demand for the Company’s enhanced
assortment and attractive value proposition in this category.
LFL sales of food and drogerie combined grew by 22.8%
in 2022. The Company also posted positive LFL sales
in kitchenware, apparel, DIY products, household goods,
books and stationery, and party supplies. Our seasonal
assortment was put under pressure as customers became
more budget-conscious and reduced their New Year gift
budgets.
Fix Price switched to local producers across a number
of non-food categories during 2022, which helped to optimise
production and delivery costs. At the same time, the share
of imports in retail sales for Russian Company-operated stores
continued to decline year-on-year from 28.0% in 2021 to 23.9%
in 2022.
1 Total may not equal the sum of the components due to rounding
38 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
number of stores
4,368 536
5,039 624
3,742 425
5,663 2022
2021
2020
Company-operated stores Franchise stores
4,904
4,167
Company-operated stores
938 118
1,087 138
797 92
1,225 2022
2021 1
2020 1
Company-operated
store space
Franchise store space
1,057
890
Fix Price selling space expansion,
thous. sq.m
Assortment and Category Mix
In 2022 we kept creating a strong alignment
between a value-driven merchandise and customer demand.
We were cautious in introducing new assortment at higher
price points, while carefully tweaking and innovating
products. The share of price points above RUB 199 in retail
sales grew to 13.3% in 2022 from 7.2% in 2021. A total of 86.8%
of our SKUs were cheaper than RUB 99.
In 2022, Fix Price started testing a new price point of RUB 349,
with its share of retail sales reaching 2.3% in 2022.
The category mix in the reporting period was skewed towards
essential goods, as consumers were conservative in their
buying patterns amidst growing macroeconomic uncertainty,
while Fix Price succeeded in sourcing exciting products
at attractive prices.
The share of food in retail sales remained almost flat on 2021
at 28.1% in 2022. The share of drogerie (household chemicals
and hygiene products) in retail sales grew by 4.8 pps to 26.7%,
due to strong demand for the Company’s enhanced
assortment and attractive value proposition in this category.
LFL sales of food and drogerie combined grew by 22.8%
in 2022. The Company also posted positive LFL sales
in kitchenware, apparel, DIY products, household goods,
books and stationery, and party supplies. Our seasonal
assortment was put under pressure as customers became
more budget-conscious and reduced their New Year gift
budgets.
Fix Price switched to local producers across a number
of non-food categories during 2022, which helped to optimise
production and delivery costs. At the same time, the share
of imports in retail sales for Russian Company-operated stores
continued to decline year-on-year from 28.0% in 2021 to 23.9%
in 2022.
1 Total may not equal the sum of the components due to rounding
38 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
Calculated as average for 455 Сompany-operated Fix Price stores in Russia (revenue and EBITDA for 12 full months after store opening)
that were opened during 2021 and are still operating (as at 31 December 2022) with CAPEX fully paid back, i.e. cumulative IAS 17 EBITDA since
opening exceeds RUB 4.8 million
Roll-Out of New Stores
Fix Price store network of 5,663 Company-operated
and franchise outlets covered 7 countries in 2022. The Company
has an extensive store footprint across Russia and successfully
operates in locations with a population of 5,000 or more. In 2022,
despite the challenging macroeconomic environment, Fix Price
continued to expand steadily in Russia and the neighbouring
countries, posting double-digit store growth. The Company
is well-positioned to drive further expansion and increase
margins in both large and densely populated cities, as well as less
affluent and smaller locations.
+759 stores
Net new store openings
in 2022
+15.5 %
Store base growth in 2022
New Store Development
and Site Selection
Fix Price has a comprehensive and effective process
to evaluate proposed new store openings rooted in advanced
IT solutions. The process covers site selection based
on a careful consideration of commercial, technical and
physical factors.
After we select a site, the Company conducts an appraisal
and feasibility study, negotiates rental costs and then
makes a final decision.
10 months
Average payback period per
store in 2022 1
Powering through
the Challenges of 2022
All Fix Price stores first and foremost use
locally produced equipment, while our IT
solutions are supported in-house. It allows
us to successfully expand our network
and mitigate sanctions risks and disruptions
to supply chains.
Our store network expansion rate exceeded
the Company’s guidance.
Due to the release of retail space in shopping
malls amid the exit of a number of international
retailers from Russia in 2022, we see more
favourable conditions for finding locations
and negotiating leases.
In 2022, despite challenges in sourcing
construction materials and price increases,
store opening CAPEX was below non-food
inflation, and we were able to keep lead times
for new store openings unchanged thanks
to improved project documentation and our
strong negotiating power with landlords.
Most of our new stores are equipped
with self-service checkouts, which allows us
to reduce workload of store employees.
39 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
that were opened during 2021 and are still operating (as at 31 December 2022) with CAPEX fully paid back, i.e. cumulative IAS 17 EBITDA since
opening exceeds RUB 4.8 million
Roll-Out of New Stores
Fix Price store network of 5,663 Company-operated
and franchise outlets covered 7 countries in 2022. The Company
has an extensive store footprint across Russia and successfully
operates in locations with a population of 5,000 or more. In 2022,
despite the challenging macroeconomic environment, Fix Price
continued to expand steadily in Russia and the neighbouring
countries, posting double-digit store growth. The Company
is well-positioned to drive further expansion and increase
margins in both large and densely populated cities, as well as less
affluent and smaller locations.
+759 stores
Net new store openings
in 2022
+15.5 %
Store base growth in 2022
New Store Development
and Site Selection
Fix Price has a comprehensive and effective process
to evaluate proposed new store openings rooted in advanced
IT solutions. The process covers site selection based
on a careful consideration of commercial, technical and
physical factors.
After we select a site, the Company conducts an appraisal
and feasibility study, negotiates rental costs and then
makes a final decision.
10 months
Average payback period per
store in 2022 1
Powering through
the Challenges of 2022
All Fix Price stores first and foremost use
locally produced equipment, while our IT
solutions are supported in-house. It allows
us to successfully expand our network
and mitigate sanctions risks and disruptions
to supply chains.
Our store network expansion rate exceeded
the Company’s guidance.
Due to the release of retail space in shopping
malls amid the exit of a number of international
retailers from Russia in 2022, we see more
favourable conditions for finding locations
and negotiating leases.
In 2022, despite challenges in sourcing
construction materials and price increases,
store opening CAPEX was below non-food
inflation, and we were able to keep lead times
for new store openings unchanged thanks
to improved project documentation and our
strong negotiating power with landlords.
Most of our new stores are equipped
with self-service checkouts, which allows us
to reduce workload of store employees.
39 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Site Selection
The site selection process is supported
by cutting-edge IT solutions. White space
analysis is based on the performance
of the existing stores and a number
of major considerations, including:
• economic and strategic
• commercial
• technical and physical
Location selection criteria:
• population over 5,000
• high footfall
• convenient access to transportation
~45 %
of sites considered
are approved
and progressed
to further appraisal
Store Monitoring
Stores are monitored via in-house
IT tools, including mobile apps
for employees. Store managers
and directors leverage apps on tablets
or smartphones with a user-friendly
interface to check and monitor current
business performance in real-time. We
also run regular audits of all the stores.
Our daily monitored KPIs
include:
• revenue vs budget
• LFL growth (incl. traffic
and the average ticket)
• loyalty card sales
• results of regular audits
• store ranking across the entire
network and within the store
sub-group
Store audits:
• assortment and stock levels
• cleanliness
• employee compliance with service
standards, including at checkout
• equipment performance
• no misleading price tags or
advertising materials
• no out-of-date products
• planogram compliance
• availability of necessary documents
and compliance with applicable
requirements
Store Maintenance
Maintenance focuses on ensuring
compliance with all applicable building,
sanitary and safety regulations. Stores
are also upgraded to ensure a uniform
shopping experience across the store
network. This often includes remodelling
store layouts to improve in-store
customer journeys and product
presentation. Maintenance also
includes refitting lighting and replacing
equipment as it becomes obsolete.
Decision Process
~12 %
of sites
considered
are opened
The decision process includes a financial
appraisal and site visit. Assuming the site
passes the technical and economic
feasibility study, we initiate negotiations
with the landlord. If negotiations
are successful, we update our estimate
of total CAPEX and, provided it is within our
target range, execute the lease agreement
and proceed to store fitting works, hiring
personnel, sourcing store equipment
and merchandise and preparing
advertising materials for the new location.
We evaluate:
• the quality of the property
• the scope to implement our standard
layout and delivery access
Financial appraisal covers:
• revenue and EBITDA
• payback period
• NPV
Negotiation
with the landlords seeks:
• short-term leases
• RUB-denominated payments
for Russian stores
• preferably revenue-linked, variable rate
contracts that give more flexibility
~30 days
average lead time
for a new store
opening
40 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
The site selection process is supported
by cutting-edge IT solutions. White space
analysis is based on the performance
of the existing stores and a number
of major considerations, including:
• economic and strategic
• commercial
• technical and physical
Location selection criteria:
• population over 5,000
• high footfall
• convenient access to transportation
~45 %
of sites considered
are approved
and progressed
to further appraisal
Store Monitoring
Stores are monitored via in-house
IT tools, including mobile apps
for employees. Store managers
and directors leverage apps on tablets
or smartphones with a user-friendly
interface to check and monitor current
business performance in real-time. We
also run regular audits of all the stores.
Our daily monitored KPIs
include:
• revenue vs budget
• LFL growth (incl. traffic
and the average ticket)
• loyalty card sales
• results of regular audits
• store ranking across the entire
network and within the store
sub-group
Store audits:
• assortment and stock levels
• cleanliness
• employee compliance with service
standards, including at checkout
• equipment performance
• no misleading price tags or
advertising materials
• no out-of-date products
• planogram compliance
• availability of necessary documents
and compliance with applicable
requirements
Store Maintenance
Maintenance focuses on ensuring
compliance with all applicable building,
sanitary and safety regulations. Stores
are also upgraded to ensure a uniform
shopping experience across the store
network. This often includes remodelling
store layouts to improve in-store
customer journeys and product
presentation. Maintenance also
includes refitting lighting and replacing
equipment as it becomes obsolete.
Decision Process
~12 %
of sites
considered
are opened
The decision process includes a financial
appraisal and site visit. Assuming the site
passes the technical and economic
feasibility study, we initiate negotiations
with the landlord. If negotiations
are successful, we update our estimate
of total CAPEX and, provided it is within our
target range, execute the lease agreement
and proceed to store fitting works, hiring
personnel, sourcing store equipment
and merchandise and preparing
advertising materials for the new location.
We evaluate:
• the quality of the property
• the scope to implement our standard
layout and delivery access
Financial appraisal covers:
• revenue and EBITDA
• payback period
• NPV
Negotiation
with the landlords seeks:
• short-term leases
• RUB-denominated payments
for Russian stores
• preferably revenue-linked, variable rate
contracts that give more flexibility
~30 days
average lead time
for a new store
opening
40 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Economic and Strategic Considerations
Economic and strategic factors are carefully considered
in order to identify target cities and localities in which new
stores could be based. Among other parameters, the number
of inhabitants (focusing on towns and other settlements
with 5,000 inhabitants or more), and the level of competition
are scrutinised in each of the cities/localities where new
openings are targeted.
Commercial Considerations
The most important commercial considerations when
selecting a specific site are the local population density
and transport links. We look closely at footfall and other
traffic; potential accessibility by car, foot and public transport;
road traffic density near the store; the type of district
(based on the prevailing type of building); local business
infrastructure; local industrial buildings; the availability
of social infrastructure facilities; and the general commercial
environment. Approximately half of stores are located
in shopping malls and the remaining half in individual
premises.
Technical and Physical Considerations
Technical and physical considerations also play a role
when looking at a particular site, as these can impact
our investment decision. These considerations cover
the proportion and size of the store, local utilities, footfall
patterns, and the scope for fitting a branded layout
and backroom logistics. When Fix Price leases space
in an existing building, we assess its quality and features,
which floor it is on and options for deliveries. If we
locate a store in a shopping mall, we evaluate the type
of stores in the centre and gauge the location of the site
inside the centre for how visible it is from the entrance
or across the floor.
41 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Economic and strategic factors are carefully considered
in order to identify target cities and localities in which new
stores could be based. Among other parameters, the number
of inhabitants (focusing on towns and other settlements
with 5,000 inhabitants or more), and the level of competition
are scrutinised in each of the cities/localities where new
openings are targeted.
Commercial Considerations
The most important commercial considerations when
selecting a specific site are the local population density
and transport links. We look closely at footfall and other
traffic; potential accessibility by car, foot and public transport;
road traffic density near the store; the type of district
(based on the prevailing type of building); local business
infrastructure; local industrial buildings; the availability
of social infrastructure facilities; and the general commercial
environment. Approximately half of stores are located
in shopping malls and the remaining half in individual
premises.
Technical and Physical Considerations
Technical and physical considerations also play a role
when looking at a particular site, as these can impact
our investment decision. These considerations cover
the proportion and size of the store, local utilities, footfall
patterns, and the scope for fitting a branded layout
and backroom logistics. When Fix Price leases space
in an existing building, we assess its quality and features,
which floor it is on and options for deliveries. If we
locate a store in a shopping mall, we evaluate the type
of stores in the centre and gauge the location of the site
inside the centre for how visible it is from the entrance
or across the floor.
41 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
Based on CAPEX for stores opened in 2022, including IT equipment
Decision Process
Fix Price’s store roll-out process is highly automated thanks
to advanced IT solutions, including the constantly updated
database of potential venues generated in-house through
analysis and a direct search process. This database enables
information on potential store venues to be quickly collected
and processed based on specific search criteria tailored
to the Group’s roll-out strategy and other considerations.
This system is able to generate comprehensive analytics
for chosen sites.
Once the site for a potential new store is identified,
we undertake a field trip to assess its adjacent retail
areas and survey the premises. We also perform financial
appraisal and economic modelling. As part of the appraisal,
Fix Price’s team prepares a technical and economic
feasibility study of the potential site, including an estimation
of store performance metrics such as projected revenue,
EBITDA, payback period, and NPV. After this, all information
on the site is submitted for review by Fix Price’s investment
committee, which either approves the investment or revises
the commercial terms. Following approval, the roll-out process
typically takes approximately 60 days, including about 30 days
to finalise the agreement and 30 days to prepare the store
for opening.
If a project is approved by our investment committee,
we then enter into negotiations on the applicable rental rates.
If negotiations are successful, we update our estimate of total
CAPEX and, provided it is within our target range, execute
the lease agreement. Once commercial terms are agreed,
our legal, accounting and internal control functions oversee
the preparation of a lease agreement. When negotiating
terms with landlords, the Company favours short- and mid-
term leases (less than three years) and gives preference
Store Monitoring
Fix Price has developed and constantly updates a range
of user friendly mobile apps for our employees which
assist with the automation of all in-store operations. Store
employees can use them to check their store performance
in real time as well as to find all necessary information
on the product and its availability, including in other stores,
send requests to the help desk at the head office, do
stocktaking of goods, and much more. These tools allow store
managers to track an agreed number of store KPIs, including
sales vs budget, like-for-like performance, loyalty programme
card sales, results of regular store audits, and the store’s
ranking across the entire network and within the store
sub-group.
Store managers also use a store management app which
allows them to monitor progress towards tasks such
as stocktakes and cleanliness checks, along with inventory
management, offering them a big picture view on products
and claims. Those apps are integrated with the Company’s
IT infrastructure and allow senior management to monitor
store performance in real time, including store KPIs.
We regularly audit our stores, focusing on assortment,
cleanliness and cashier performance, including cash
handling. We also check equipment, price tags, advertising
materials, expiry dates, planogram compliance, employee
compliance with service standards, availability of necessary
documents, compliance with applicable requirements,
and much more. Should performance against any of these
metrics drop below 90%, extensive store checks
and investigations are triggered.
Store Maintenance
Fix Price conducts regular maintenance for the upkeep of our
stores. Maintenance focuses on compliance with all applicable
building, sanitary and safety regulations. Additionally, regular
audits are performed by sales department employees. Should
anything malfunction or break down, a request can be logged
in the internal management information system to call out
contractors. We upgrade stores to ensure a uniform shopping
experience across the network and replace equipment that
has become obsolete.
RUB 2.8 million per store
Average capital expenditure
on refurbishment for a Company-operated store in Russia
to revenue-linked rates that provide flexibility in different
economic environments. Once the lease agreement
is approved with the Investment Committee and all pre-
requisite conditions for the store opening are satisfied,
a contract is signed.
When the agreement is signed, we start fitting out the store,
hire personnel, source store equipment and merchandise,
and prepare advertising materials for the new location. Store
fits and openings are overseen by our Company-operated
stores development unit, which coordinates with other
departments as necessary and assists regional operations
managers with new openings within their respective areas
of responsibility.
RUB 4.8 million 1
Average capital expenditure
for a new Сompany-operated store in Russia
42 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Decision Process
Fix Price’s store roll-out process is highly automated thanks
to advanced IT solutions, including the constantly updated
database of potential venues generated in-house through
analysis and a direct search process. This database enables
information on potential store venues to be quickly collected
and processed based on specific search criteria tailored
to the Group’s roll-out strategy and other considerations.
This system is able to generate comprehensive analytics
for chosen sites.
Once the site for a potential new store is identified,
we undertake a field trip to assess its adjacent retail
areas and survey the premises. We also perform financial
appraisal and economic modelling. As part of the appraisal,
Fix Price’s team prepares a technical and economic
feasibility study of the potential site, including an estimation
of store performance metrics such as projected revenue,
EBITDA, payback period, and NPV. After this, all information
on the site is submitted for review by Fix Price’s investment
committee, which either approves the investment or revises
the commercial terms. Following approval, the roll-out process
typically takes approximately 60 days, including about 30 days
to finalise the agreement and 30 days to prepare the store
for opening.
If a project is approved by our investment committee,
we then enter into negotiations on the applicable rental rates.
If negotiations are successful, we update our estimate of total
CAPEX and, provided it is within our target range, execute
the lease agreement. Once commercial terms are agreed,
our legal, accounting and internal control functions oversee
the preparation of a lease agreement. When negotiating
terms with landlords, the Company favours short- and mid-
term leases (less than three years) and gives preference
Store Monitoring
Fix Price has developed and constantly updates a range
of user friendly mobile apps for our employees which
assist with the automation of all in-store operations. Store
employees can use them to check their store performance
in real time as well as to find all necessary information
on the product and its availability, including in other stores,
send requests to the help desk at the head office, do
stocktaking of goods, and much more. These tools allow store
managers to track an agreed number of store KPIs, including
sales vs budget, like-for-like performance, loyalty programme
card sales, results of regular store audits, and the store’s
ranking across the entire network and within the store
sub-group.
Store managers also use a store management app which
allows them to monitor progress towards tasks such
as stocktakes and cleanliness checks, along with inventory
management, offering them a big picture view on products
and claims. Those apps are integrated with the Company’s
IT infrastructure and allow senior management to monitor
store performance in real time, including store KPIs.
We regularly audit our stores, focusing on assortment,
cleanliness and cashier performance, including cash
handling. We also check equipment, price tags, advertising
materials, expiry dates, planogram compliance, employee
compliance with service standards, availability of necessary
documents, compliance with applicable requirements,
and much more. Should performance against any of these
metrics drop below 90%, extensive store checks
and investigations are triggered.
Store Maintenance
Fix Price conducts regular maintenance for the upkeep of our
stores. Maintenance focuses on compliance with all applicable
building, sanitary and safety regulations. Additionally, regular
audits are performed by sales department employees. Should
anything malfunction or break down, a request can be logged
in the internal management information system to call out
contractors. We upgrade stores to ensure a uniform shopping
experience across the network and replace equipment that
has become obsolete.
RUB 2.8 million per store
Average capital expenditure
on refurbishment for a Company-operated store in Russia
to revenue-linked rates that provide flexibility in different
economic environments. Once the lease agreement
is approved with the Investment Committee and all pre-
requisite conditions for the store opening are satisfied,
a contract is signed.
When the agreement is signed, we start fitting out the store,
hire personnel, source store equipment and merchandise,
and prepare advertising materials for the new location. Store
fits and openings are overseen by our Company-operated
stores development unit, which coordinates with other
departments as necessary and assists regional operations
managers with new openings within their respective areas
of responsibility.
RUB 4.8 million 1
Average capital expenditure
for a new Сompany-operated store in Russia
42 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Supply Chain
Fix Price has a well-balanced supply chain, which is central to the Company’s business model and gives us
a crucial competitive edge. Our sourcing capabilities and distribution platform facilitate efficient and rapid
geographical expansion and support our low pricing proposition and constantly changing product range.
Suppliers
Sourcing
Fix Price’s sourcing is designed to optimise costs and enable
agile responses, a frequent rotation of goods and a high
sell-through rate. We strive to follow a transparent procurement
model that sees us engage in proactive discussions of pricing
architecture with suppliers to secure the best supply offers.
The Company boasts long-standing, direct, dynamic,
and collaborative relationships with suppliers and vendors
that unlock access to quality products at attractive prices.
In 2022, amid the geopolitical uncertainty, a turbulent
economy and a number of foreign companies exiting Russia,
we stepped up our efforts to attract new suppliers both
internationally and domestically and took the necessary steps
to ensure seamless deliveries. In particular, we purchased
safety stock, issued guarantees for the volume of purchases
and tightened our collaboration with small and medium-sized
local manufacturers.
Fix Price negotiates bespoke product features with suppliers,
including packaging, taste, design, weight, and much more,
leveraging our market position and scale to maximise
profitability. We also benefit from exclusive arrangements
for custom products from several suppliers. By tapping into
the scale and pace of our chain’s expansion, coupled with our
knowledge of customer behaviour, well-developed supply
chain and lean decision-making process, the Company can
offer vendors a greater market share, which, in turn, translates
to more attractive products on our shelves and increased
traffic in our stores.
Our supply chain includes:
Direct import
capabilities
Sourcing Deliveries
of products
to stores
Warehousing
infrastructure
(distribution
centres)
43 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price has a well-balanced supply chain, which is central to the Company’s business model and gives us
a crucial competitive edge. Our sourcing capabilities and distribution platform facilitate efficient and rapid
geographical expansion and support our low pricing proposition and constantly changing product range.
Suppliers
Sourcing
Fix Price’s sourcing is designed to optimise costs and enable
agile responses, a frequent rotation of goods and a high
sell-through rate. We strive to follow a transparent procurement
model that sees us engage in proactive discussions of pricing
architecture with suppliers to secure the best supply offers.
The Company boasts long-standing, direct, dynamic,
and collaborative relationships with suppliers and vendors
that unlock access to quality products at attractive prices.
In 2022, amid the geopolitical uncertainty, a turbulent
economy and a number of foreign companies exiting Russia,
we stepped up our efforts to attract new suppliers both
internationally and domestically and took the necessary steps
to ensure seamless deliveries. In particular, we purchased
safety stock, issued guarantees for the volume of purchases
and tightened our collaboration with small and medium-sized
local manufacturers.
Fix Price negotiates bespoke product features with suppliers,
including packaging, taste, design, weight, and much more,
leveraging our market position and scale to maximise
profitability. We also benefit from exclusive arrangements
for custom products from several suppliers. By tapping into
the scale and pace of our chain’s expansion, coupled with our
knowledge of customer behaviour, well-developed supply
chain and lean decision-making process, the Company can
offer vendors a greater market share, which, in turn, translates
to more attractive products on our shelves and increased
traffic in our stores.
Our supply chain includes:
Direct import
capabilities
Sourcing Deliveries
of products
to stores
Warehousing
infrastructure
(distribution
centres)
43 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Our procurement department is divided into 11 category
management teams, each acting as a full-cycle commercial
unit. This structure provides substantial flexibility to the
department, allowing for an agile and streamlined decision-
making process around category management and sourcing.
Each category management team is responsible for selecting
SKUs and delivering stock to stores. A category manager
effectively acts as the commercial head of the relevant
product category.
The product teams’ sourcing decisions are based
on a thorough analysis of historical data and forecasts
of the latest global trends in the industry, like-for-like sales
in previous periods, consumer behaviour, and evolving
customer needs.
Product managers are responsible for contract negotiations,
private label management, refunds, and coordination
with the marketing department. Supply managers or import
managers — depending on the product category — are
responsible for ordering, DC inventory management
and shipment documentation.
We use an electronic trading system (CISLINK) for monitoring
and obtaining favourable supply terms whenever the supplier
selection process is based on a tender. The system
automatically selects the best offer acceptable to us.
Fix Price has implemented a number of dedicated
policies, such as the Code of Conduct and Business Ethics,
the Anti-Modern Slavery and Human Trafficking Policy
and the Anti-Bribery and Corruption Policy, which outline
the rules and objectives to which the Company is committed
when selecting suppliers. This leaves no room for forced
or child labour and ensures the human rights of suppliers’
employees are safeguarded: we have adopted a zero-tolerance
approach towards any form of forced or child labour
by any supplier. We also require our suppliers to comply
with the Company’s internal policies and applicable legislation
and also carry out periodic audits for compliance.
~77 %
оf Fix Price purchases have been sourced from domestic suppliers
Supplier Base
Fix Price has a large, diversified and predominantly domestic
supplier base. In 2022, the number of active suppliers was
509, compared to 686 in 2021 when the Company was
actively testing new sourcing opportunities amid growing
raw materials prices. This year we put particular emphasis
on ensuring stable supplies of household chemicals, hygiene
products and cosmetics, as well as packaging for goods.
Thanks to our team’s hard work, we managed to maintain and
diversify the assortment, all while keeping prices low.
Our top five and ten suppliers accounted for 25% and 35%
of the Company’s cost of goods sold, respectively, in 2022.
The top-five suppliers continued to be primarily Chinese
agents that work directly with hundreds of manufacturers
in China.
In 2022, Turkey became a major international hub
for contracting new suppliers. We engaged nine new vendors
of household chemicals, hygiene products, confectionery,
and more.
We significantly increased the share of small and medium-
sized local manufacturers we buy from, maintained volumes
of supplies and diversified our product range with Russian
brands. From among the CIS countries, we increased
supplies from Belarus and Uzbekistan. Our imports from
the СIS countries primarily consist of household chemicals
and cosmetics.
In 2022, approximately 77% of our products were locally
sourced, 3 pps higher than in 2021. Food, cosmetics and
apparel are all broadly sourced locally, while toys, kitchenware,
household goods, and accessories remain mostly imported.
We will continue to maintain and diversify our range of SKUs,
as well as to ensure low prices. Our plans for 2023 include:
• developing a network of suppliers from new countries,
primarily from Turkey;
• increasing the share of high-turnover and mid-priced
goods;
• expanding the range of children’s goods and allocating
separate shelf space for them;
• expanding our line of locally sourced, high-quality
and environmentally friendly detergents, as well as car
chemicals and cleaning tools;
• running further holiday and seasonal campaigns
for the New Year, Christmas, Valentine’s Day, Halloween, etc.
Principal Supply Terms and Conditions
Fix Price generally enters into standard framework contracts
with suppliers containing uniform terms, such as the rights
and obligations of the parties, the quality and packaging
of supplied goods and guarantee terms. The price terms and
product range are stipulated in corresponding appendices
to these contracts and are subject to periodic review.
The Company provides the supplier with an order for each
individual delivery specifying the assortment and quantity
of goods to be delivered based on established price lists.
When sourcing products from abroad, Fix Price receives
product samples from suppliers before order placement,
which then undergo product certification by independent
agencies. If the product does not go through the certification
process due to any defects or other reasons, the order is put
on hold so that the supplier could fix the deviation in order
to obtain certification.
44 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
management teams, each acting as a full-cycle commercial
unit. This structure provides substantial flexibility to the
department, allowing for an agile and streamlined decision-
making process around category management and sourcing.
Each category management team is responsible for selecting
SKUs and delivering stock to stores. A category manager
effectively acts as the commercial head of the relevant
product category.
The product teams’ sourcing decisions are based
on a thorough analysis of historical data and forecasts
of the latest global trends in the industry, like-for-like sales
in previous periods, consumer behaviour, and evolving
customer needs.
Product managers are responsible for contract negotiations,
private label management, refunds, and coordination
with the marketing department. Supply managers or import
managers — depending on the product category — are
responsible for ordering, DC inventory management
and shipment documentation.
We use an electronic trading system (CISLINK) for monitoring
and obtaining favourable supply terms whenever the supplier
selection process is based on a tender. The system
automatically selects the best offer acceptable to us.
Fix Price has implemented a number of dedicated
policies, such as the Code of Conduct and Business Ethics,
the Anti-Modern Slavery and Human Trafficking Policy
and the Anti-Bribery and Corruption Policy, which outline
the rules and objectives to which the Company is committed
when selecting suppliers. This leaves no room for forced
or child labour and ensures the human rights of suppliers’
employees are safeguarded: we have adopted a zero-tolerance
approach towards any form of forced or child labour
by any supplier. We also require our suppliers to comply
with the Company’s internal policies and applicable legislation
and also carry out periodic audits for compliance.
~77 %
оf Fix Price purchases have been sourced from domestic suppliers
Supplier Base
Fix Price has a large, diversified and predominantly domestic
supplier base. In 2022, the number of active suppliers was
509, compared to 686 in 2021 when the Company was
actively testing new sourcing opportunities amid growing
raw materials prices. This year we put particular emphasis
on ensuring stable supplies of household chemicals, hygiene
products and cosmetics, as well as packaging for goods.
Thanks to our team’s hard work, we managed to maintain and
diversify the assortment, all while keeping prices low.
Our top five and ten suppliers accounted for 25% and 35%
of the Company’s cost of goods sold, respectively, in 2022.
The top-five suppliers continued to be primarily Chinese
agents that work directly with hundreds of manufacturers
in China.
In 2022, Turkey became a major international hub
for contracting new suppliers. We engaged nine new vendors
of household chemicals, hygiene products, confectionery,
and more.
We significantly increased the share of small and medium-
sized local manufacturers we buy from, maintained volumes
of supplies and diversified our product range with Russian
brands. From among the CIS countries, we increased
supplies from Belarus and Uzbekistan. Our imports from
the СIS countries primarily consist of household chemicals
and cosmetics.
In 2022, approximately 77% of our products were locally
sourced, 3 pps higher than in 2021. Food, cosmetics and
apparel are all broadly sourced locally, while toys, kitchenware,
household goods, and accessories remain mostly imported.
We will continue to maintain and diversify our range of SKUs,
as well as to ensure low prices. Our plans for 2023 include:
• developing a network of suppliers from new countries,
primarily from Turkey;
• increasing the share of high-turnover and mid-priced
goods;
• expanding the range of children’s goods and allocating
separate shelf space for them;
• expanding our line of locally sourced, high-quality
and environmentally friendly detergents, as well as car
chemicals and cleaning tools;
• running further holiday and seasonal campaigns
for the New Year, Christmas, Valentine’s Day, Halloween, etc.
Principal Supply Terms and Conditions
Fix Price generally enters into standard framework contracts
with suppliers containing uniform terms, such as the rights
and obligations of the parties, the quality and packaging
of supplied goods and guarantee terms. The price terms and
product range are stipulated in corresponding appendices
to these contracts and are subject to periodic review.
The Company provides the supplier with an order for each
individual delivery specifying the assortment and quantity
of goods to be delivered based on established price lists.
When sourcing products from abroad, Fix Price receives
product samples from suppliers before order placement,
which then undergo product certification by independent
agencies. If the product does not go through the certification
process due to any defects or other reasons, the order is put
on hold so that the supplier could fix the deviation in order
to obtain certification.
44 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Distribution
We operate ten modern distribution centres (DCs) with a total
space of 342,897 sq.m, including six owned DCs located in
Pushkino and Vnukovo (the Moscow region), as well as the
Yekaterinburg, St Petersburg, Novosibirsk, and Krasnodar
regions. Four leased DCs are located in the Novosibirsk,
Voronezh, and Samara regions and the Republic of Tatarstan.
Our DCs are strategically located across our retail network’s
footprint in Russia and neighbouring countries. Almost 100%
of the Company’s stock is delivered directly from suppliers
to our DCs for onward transportation to stores, with a small
number of SKUs delivered directly to stores (such as ice-
cream and similar products that must be stored at certain
temperatures).
In 2022, the Company launched a DC in the Samara region
with a total area of 37,162 sq.m. The leased warehouse serves
eight regions: Orenburg, Penza, Samara, Saratov, Volgograd
and Ulyanovsk, as well as the Republics of Tatarstan and
Bashkortostan. The new DC will boost delivery efficiency,
reduce the load on existing warehouses in Kazan and
Voronezh and contribute to the even more flexible supply
management for our regional stores.
In 2022, Fix Price relaunched its owned second DC with a total
area of 23,387 sq.m in Novosibirsk. The warehouse serves
Company-operated stores in Kazakhstan.
Fix Price DCs as at 31 December 2022
Location Total storage area (sq.m) Owned / Leased Lease expiry date
Pushkino, Moscow region 27,774 Owned –
Vnukovo, Moscow region 27,959 Owned –
Yekaterinburg 22,061 Owned –
Novosibirsk 44,117 Leased Jun 25
Saint Petersburg 35,581 Owned –
Kazan 32,867 Leased Mar 27
Krasnodar 67,272 Owned –
Voronezh 24,718 Leased Dec 27
Samara (new) 37,162 Leased Mar 32
Novosibirsk (relaunched) 23,387 Owned –
Total 342,897
In 2022, Fix Price
increased its
total number
of DCs to ten
as we launched:
an owned DC in Novosibirsk
with a total area of
23,387 sq.m
a leased DC in the Samara
region with a total area of
37,162 sq.m
45 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
We operate ten modern distribution centres (DCs) with a total
space of 342,897 sq.m, including six owned DCs located in
Pushkino and Vnukovo (the Moscow region), as well as the
Yekaterinburg, St Petersburg, Novosibirsk, and Krasnodar
regions. Four leased DCs are located in the Novosibirsk,
Voronezh, and Samara regions and the Republic of Tatarstan.
Our DCs are strategically located across our retail network’s
footprint in Russia and neighbouring countries. Almost 100%
of the Company’s stock is delivered directly from suppliers
to our DCs for onward transportation to stores, with a small
number of SKUs delivered directly to stores (such as ice-
cream and similar products that must be stored at certain
temperatures).
In 2022, the Company launched a DC in the Samara region
with a total area of 37,162 sq.m. The leased warehouse serves
eight regions: Orenburg, Penza, Samara, Saratov, Volgograd
and Ulyanovsk, as well as the Republics of Tatarstan and
Bashkortostan. The new DC will boost delivery efficiency,
reduce the load on existing warehouses in Kazan and
Voronezh and contribute to the even more flexible supply
management for our regional stores.
In 2022, Fix Price relaunched its owned second DC with a total
area of 23,387 sq.m in Novosibirsk. The warehouse serves
Company-operated stores in Kazakhstan.
Fix Price DCs as at 31 December 2022
Location Total storage area (sq.m) Owned / Leased Lease expiry date
Pushkino, Moscow region 27,774 Owned –
Vnukovo, Moscow region 27,959 Owned –
Yekaterinburg 22,061 Owned –
Novosibirsk 44,117 Leased Jun 25
Saint Petersburg 35,581 Owned –
Kazan 32,867 Leased Mar 27
Krasnodar 67,272 Owned –
Voronezh 24,718 Leased Dec 27
Samara (new) 37,162 Leased Mar 32
Novosibirsk (relaunched) 23,387 Owned –
Total 342,897
In 2022, Fix Price
increased its
total number
of DCs to ten
as we launched:
an owned DC in Novosibirsk
with a total area of
23,387 sq.m
a leased DC in the Samara
region with a total area of
37,162 sq.m
45 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price intends to increase the total space of its distribution
centres gradually. In the Q1 of 2023, the Company opened
a DC in Domodedovo with a total space of c. 68,000 sq.m.
Fix Price invested approximately RUB 3.5 billion (excluding VAT)
in the construction and equipment of the distribution centre.
In 2023 we also plan to launch a second DC in Yekaterinburg with
a total space of c. 68,000 sq.m. It will serve stores in the Urals and
Siberian Federal districts, satisfy the warehousing needs of the
Kazakhstan market and increase our ability to rapidly supply
stores with a full range of products for years to come.
Transportation
All of our transportation needs for product delivery
services are outsourced to a number of third-party logistics
companies. Usually, Fix Price enters into open-ended
contracts with these outsourcing companies that allow
us to run regular tenders and offer performance incentives
linked to delivery volumes. The performance, pricing
and selection of these third-party providers are periodically
reviewed to maximise value for money.
When Fix Price imports products, it engages a variety of land
and sea transportation operators or agents for transportation
from overseas to Russian ports and to our DCs. Customs
clearance is obtained for imported goods. The customs
clearance process is overseen by customs brokers.
In 2022, due to the geopolitical situation, we encountered
some challenges in international logistics, but we were able
to quickly reorganise and find new routes. At the same time,
prices and delivery times, although increased, remained lower
than they were during the COVID-19 pandemic.
The challenges were chiefly related to the unwillingness
of a number of international shipping companies to deliver
containers to Russian ports, the EU’s ban on the transit of
restricted / limited goods by road using Russian operators,
as well as the increased load on rail services from China.
The Company has been working
hard to develop solutions
to emerging issues and has
achieved impressive success.
Notably, in 2022:
In 2023, we will continue to make every effort to identify new
routes and logistics solutions to keep supplies running smoothly.
We shipped priority goods through
stable transportation routes to ensure
on-time delivery
We reached agreements with suppliers
to prepare promotional and seasonal
goods for shipment in advance
66% of imported products were
delivered by rail
We began to work more closely with
freight forwarders and to attract small
and medium-sized carriers to test new
sea routes
We expanded the base of suppliers
producing goods in Russia
We now book more time for obtaining
samples of goods for certification from
our international suppliers, as we switched
to the Russian Post (EMS) that made
the process more time-consuming
46 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
centres gradually. In the Q1 of 2023, the Company opened
a DC in Domodedovo with a total space of c. 68,000 sq.m.
Fix Price invested approximately RUB 3.5 billion (excluding VAT)
in the construction and equipment of the distribution centre.
In 2023 we also plan to launch a second DC in Yekaterinburg with
a total space of c. 68,000 sq.m. It will serve stores in the Urals and
Siberian Federal districts, satisfy the warehousing needs of the
Kazakhstan market and increase our ability to rapidly supply
stores with a full range of products for years to come.
Transportation
All of our transportation needs for product delivery
services are outsourced to a number of third-party logistics
companies. Usually, Fix Price enters into open-ended
contracts with these outsourcing companies that allow
us to run regular tenders and offer performance incentives
linked to delivery volumes. The performance, pricing
and selection of these third-party providers are periodically
reviewed to maximise value for money.
When Fix Price imports products, it engages a variety of land
and sea transportation operators or agents for transportation
from overseas to Russian ports and to our DCs. Customs
clearance is obtained for imported goods. The customs
clearance process is overseen by customs brokers.
In 2022, due to the geopolitical situation, we encountered
some challenges in international logistics, but we were able
to quickly reorganise and find new routes. At the same time,
prices and delivery times, although increased, remained lower
than they were during the COVID-19 pandemic.
The challenges were chiefly related to the unwillingness
of a number of international shipping companies to deliver
containers to Russian ports, the EU’s ban on the transit of
restricted / limited goods by road using Russian operators,
as well as the increased load on rail services from China.
The Company has been working
hard to develop solutions
to emerging issues and has
achieved impressive success.
Notably, in 2022:
In 2023, we will continue to make every effort to identify new
routes and logistics solutions to keep supplies running smoothly.
We shipped priority goods through
stable transportation routes to ensure
on-time delivery
We reached agreements with suppliers
to prepare promotional and seasonal
goods for shipment in advance
66% of imported products were
delivered by rail
We began to work more closely with
freight forwarders and to attract small
and medium-sized carriers to test new
sea routes
We expanded the base of suppliers
producing goods in Russia
We now book more time for obtaining
samples of goods for certification from
our international suppliers, as we switched
to the Russian Post (EMS) that made
the process more time-consuming
46 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
IT Infrastructure
Our proprietary IT solutions are geared towards reducing operating costs and boosting
efficiency. Cutting-edge digital technologies have enabled us to continue scaling rapidly
while saving employee time and streamlining costs in challenging market conditions.
At the same time, our IT services have proven their effectiveness both in ensuring all major
systems run flawlessly and securely, and in enabling the smooth rollout of new solutions.
Digitalisation has found its way into all major aspects of our business, including logistics,
inventory management, demand forecasting, procurement, pricing, HR, and finance.
In 2022, amid turbulent market conditions and geopolitical
turmoil, we faced disruptions in the supply of some
components and updating technologies. Delivery times
increased twofold. Under these challenging conditions,
the Company constantly sought out new supply channels,
introduced alternative software and hardware solutions
and rolled out available equipment.
Information security and data privacy threats
and requirements have grown incrementally
over the reporting year, partly due to the tense geopolitical
environment, which prompted various hacker groups to step
up their activities, but also due to the constant tightening
of data protection regulation. In order to provide
futureproof responses, we put a special emphasis
on information security solutions and services.
By way of example, 2022 saw an uptick in DDoS attacks
on the Company’s web-based resources, as well as a surge
in the number of malicious emails. To safeguard
the Company’s web infrastructure, we regularly audit
the security of corporate resources and eliminate detected
vulnerabilities.
We introduced two new solutions to protect our
web-based applications in 2022: a DDoS protection
service and a smart cyberattack protection service.
New anti-virus and anti-spam modules were also
launched for the Company’s email service.
In addition, the requirements for password protection
were toughened, while several information security
standards and regulations were developed and updated.
To ensure data remains secure,
the Company leverages specialist
software tools and much more
A special system is used as an office proxy server
and a firewall to protect against attacks, filter
unwanted traffic and prevent unauthorised access
to resources
To identify critical security flaws in our server
and network infrastructure, we leverage
an automated solution that seeks out and fixes
vulnerabilities and software flaws, installs missing
patches and flags malware and misconfigurations
across various operating systems, devices
and applications
The special IDM system, which was released
in 2021 and is constantly being improved,
offers a centralised approach to managing user
accounts and access rights across the Company’s
corporate systems
The smart DLP system, which has been used
for several years and is aimed at detecting
and countering the unauthorised dissemination
of confidential information, as well as the misuse
and the illegal use of resources, has proved its
effectiveness many times over
A specialised data protection system has
been introduced for backup and storage; it
provides a backup of entire servers and virtualisation
systems, thereby minimising the recovery time
of systems in the event of a failure
47 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Our proprietary IT solutions are geared towards reducing operating costs and boosting
efficiency. Cutting-edge digital technologies have enabled us to continue scaling rapidly
while saving employee time and streamlining costs in challenging market conditions.
At the same time, our IT services have proven their effectiveness both in ensuring all major
systems run flawlessly and securely, and in enabling the smooth rollout of new solutions.
Digitalisation has found its way into all major aspects of our business, including logistics,
inventory management, demand forecasting, procurement, pricing, HR, and finance.
In 2022, amid turbulent market conditions and geopolitical
turmoil, we faced disruptions in the supply of some
components and updating technologies. Delivery times
increased twofold. Under these challenging conditions,
the Company constantly sought out new supply channels,
introduced alternative software and hardware solutions
and rolled out available equipment.
Information security and data privacy threats
and requirements have grown incrementally
over the reporting year, partly due to the tense geopolitical
environment, which prompted various hacker groups to step
up their activities, but also due to the constant tightening
of data protection regulation. In order to provide
futureproof responses, we put a special emphasis
on information security solutions and services.
By way of example, 2022 saw an uptick in DDoS attacks
on the Company’s web-based resources, as well as a surge
in the number of malicious emails. To safeguard
the Company’s web infrastructure, we regularly audit
the security of corporate resources and eliminate detected
vulnerabilities.
We introduced two new solutions to protect our
web-based applications in 2022: a DDoS protection
service and a smart cyberattack protection service.
New anti-virus and anti-spam modules were also
launched for the Company’s email service.
In addition, the requirements for password protection
were toughened, while several information security
standards and regulations were developed and updated.
To ensure data remains secure,
the Company leverages specialist
software tools and much more
A special system is used as an office proxy server
and a firewall to protect against attacks, filter
unwanted traffic and prevent unauthorised access
to resources
To identify critical security flaws in our server
and network infrastructure, we leverage
an automated solution that seeks out and fixes
vulnerabilities and software flaws, installs missing
patches and flags malware and misconfigurations
across various operating systems, devices
and applications
The special IDM system, which was released
in 2021 and is constantly being improved,
offers a centralised approach to managing user
accounts and access rights across the Company’s
corporate systems
The smart DLP system, which has been used
for several years and is aimed at detecting
and countering the unauthorised dissemination
of confidential information, as well as the misuse
and the illegal use of resources, has proved its
effectiveness many times over
A specialised data protection system has
been introduced for backup and storage; it
provides a backup of entire servers and virtualisation
systems, thereby minimising the recovery time
of systems in the event of a failure
47 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Internal IT Infrastructure
Fix Price’s Enterprise Resource Planning (ERP) system
is the cornerstone of the Company’s IT infrastructure.
The system is a one-stop shop for managing cash, goods
and materials; procurement and pricing procedures;
and internal systems at stores and the head office, including
HR and Finance. At every stage, inventory turnover, financial
flows and accounting can all be managed from within the ERP
system. Moreover, the integration of the BOSS-Kadrovik HR
management system with other management systems
allowed us to centralise timesheet tracking across stores
and warehouses.
Budgeting Module
In 2022, we successfully launched a budgeting module. Its
principal function is to control the receipt and expenditure
of funds, track future cash flows against the existing budget,
as well as to prevent budget overruns.
Warehouse Management System (WMS)
WMS Logistic is an in-house software system specially tailored
to manage technological operations inside our warehouses
in real time. It helps keep all distribution centres running
smoothly, and is being integrated with our ERP system.
WMS Logistic embraces several cutting-edge solutions,
including a module for verifying the merchandise loaded onto
pallets. It empowers our logistic specialists to check the actual
weight of a loaded pallet at both entry and exit points
of distribution centres. The technology is an effective barrier
against delivering incorrect orders to stores, as pallets can be
repacked at a warehouse, unlocking time and cost savings.
If a difference of 0.8x the weight of the lightest box
on the pallet is detected, it will be rejected and referred
to the security function’s control area, where the error can be
identified and corrected. The security function ensures that
no poorly packed pallets are sent out to stores.
Proprietary Demand Forecasting Tool (Demand
Forecasting System)
Auto-Order was rolled out to streamline the overall efficiency
of managing in-store inventory balances, facilitating
automated store-level ordering to support inventory
replenishment / restocking.
Visualisation Tool
This tool draws all the necessary data from various sources
into a single application and is used for the operational
management of key metrics and business analytics.
This enables the Fix Price management team to track
operational performance and business risks in real time.
Information Management Tool
The electronic document management system serves
as a tool for managing a single database, providing electronic
document approval, archiving, etc. All our units are connected
online into the electronic document management system,
which allows for an unprecedented reduction of time
for approvals and for achieving full control over internal
corporate communications.
POS System
Fix Price implemented a modern advanced POS system
with broad functionality, which is specifically designed
to collect real-time transaction data from cash registers,
to transfer data to Fix Price’s ERP, and to manage product
mix. We aim to further improve our POS system to enhance
our unique value proposition and to keep up with the modern
retail trends.
Mobile Solutions for Store Operations
and Employees’ Remote Access
We have developed an Android-based mobile app
for automating all processes managed by store employees
on a real-time basis via tablets or smartphones. The app
has proved its efficiency in several ways. Firstly, it enables
our managers to view and track current operational tasks
in real time and report on any results. Secondly, it provides
centralised remote monitoring of the condition of store
premises. In this way, it contributed to reducing the time
spent on solving standard tasks and boosting the productivity
of store employees. We are constantly expanding
and enhancing its functionality to optimise and automate
existing business processes. For example, in recent years,
blocks for issuing online orders, product write-offs, unsold
products analytics, and repair and maintenance ticketing
for in-store equipment have been introduced.
48 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price’s Enterprise Resource Planning (ERP) system
is the cornerstone of the Company’s IT infrastructure.
The system is a one-stop shop for managing cash, goods
and materials; procurement and pricing procedures;
and internal systems at stores and the head office, including
HR and Finance. At every stage, inventory turnover, financial
flows and accounting can all be managed from within the ERP
system. Moreover, the integration of the BOSS-Kadrovik HR
management system with other management systems
allowed us to centralise timesheet tracking across stores
and warehouses.
Budgeting Module
In 2022, we successfully launched a budgeting module. Its
principal function is to control the receipt and expenditure
of funds, track future cash flows against the existing budget,
as well as to prevent budget overruns.
Warehouse Management System (WMS)
WMS Logistic is an in-house software system specially tailored
to manage technological operations inside our warehouses
in real time. It helps keep all distribution centres running
smoothly, and is being integrated with our ERP system.
WMS Logistic embraces several cutting-edge solutions,
including a module for verifying the merchandise loaded onto
pallets. It empowers our logistic specialists to check the actual
weight of a loaded pallet at both entry and exit points
of distribution centres. The technology is an effective barrier
against delivering incorrect orders to stores, as pallets can be
repacked at a warehouse, unlocking time and cost savings.
If a difference of 0.8x the weight of the lightest box
on the pallet is detected, it will be rejected and referred
to the security function’s control area, where the error can be
identified and corrected. The security function ensures that
no poorly packed pallets are sent out to stores.
Proprietary Demand Forecasting Tool (Demand
Forecasting System)
Auto-Order was rolled out to streamline the overall efficiency
of managing in-store inventory balances, facilitating
automated store-level ordering to support inventory
replenishment / restocking.
Visualisation Tool
This tool draws all the necessary data from various sources
into a single application and is used for the operational
management of key metrics and business analytics.
This enables the Fix Price management team to track
operational performance and business risks in real time.
Information Management Tool
The electronic document management system serves
as a tool for managing a single database, providing electronic
document approval, archiving, etc. All our units are connected
online into the electronic document management system,
which allows for an unprecedented reduction of time
for approvals and for achieving full control over internal
corporate communications.
POS System
Fix Price implemented a modern advanced POS system
with broad functionality, which is specifically designed
to collect real-time transaction data from cash registers,
to transfer data to Fix Price’s ERP, and to manage product
mix. We aim to further improve our POS system to enhance
our unique value proposition and to keep up with the modern
retail trends.
Mobile Solutions for Store Operations
and Employees’ Remote Access
We have developed an Android-based mobile app
for automating all processes managed by store employees
on a real-time basis via tablets or smartphones. The app
has proved its efficiency in several ways. Firstly, it enables
our managers to view and track current operational tasks
in real time and report on any results. Secondly, it provides
centralised remote monitoring of the condition of store
premises. In this way, it contributed to reducing the time
spent on solving standard tasks and boosting the productivity
of store employees. We are constantly expanding
and enhancing its functionality to optimise and automate
existing business processes. For example, in recent years,
blocks for issuing online orders, product write-offs, unsold
products analytics, and repair and maintenance ticketing
for in-store equipment have been introduced.
48 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price School
In 2022, we continued to fine-tune Fix Price School, a remote
learning app for the Group's employees regardless of the
division they work in. The app has a user-friendly interface
and is a convenient tool for reading or listening to various
courses, taking qualification tests, and much more.
Web-System to Streamline New Store Openings
Another significant recent innovation at Fix Price has been
the introduction of a system that has greatly simplified
the new store opening process for our staff. The suite
of IT services developed by the Company has completely
automated the data collection process for available real
estate and calculates the economics of opening a new store
in a particular location.
Supporting the Supply Chain
This modern software solution is used to automate repetitive
tasks around managing deliveries, import supplies, custom
support, logistics, verifying certification, calculating planned
and actual costs, etc.
Improving the Customer Experience
Fix Price’s business is built around providing superior
service to customers while rolling out the latest innovations
and technologies across all related processes at our
checkouts. It allows us to boost productivity, drive customer
loyalty and achieve our strategic goals.
Self-Service Checkouts
On the back of a successful pilot in Moscow in 2021,
self-checkouts are being installed at our new stores
in Russia. Self-checkouts cut staff workload during
peak hours, and unlock extra capacity for more footfall
while optimising costs. By shortening checkout queues
and processing payments faster and more comfortably
for shoppers, we have encouraged customer loyalty.
Also, during the pandemic, self-checkouts helped keep
our customers safe by reducing contact with store
employees. In 2022, more than 1,260 self-checkouts were
put into operation, while the share of purchases through
them in stores reached an average of 37%. In the future, we
plan to grow the number of self-checkout machines in our
stores.
Payment by QR Code (Faster Payments System)
We constantly strive to make the shopping experience in our
stores as convenient and swift as possible, so we welcome
all the options that facilitate this. In 2022, our stores were
upgraded to accept QR code payments through the Bank
of Russia’s Faster Payments System (SBP). This service
allows Russian shoppers to instantly receive and transfer
funds commission-free. The majority of Russian banks are
connected to the SBP, which means our customers can
pay for their purchases from the comfort of their banking
app: they do not need to get out their bank cards, all they
have to do is scan a QR code generated at checkout. These
transactions charge a lower bank commission vs card
payments, which is beneficial for the Company.
WE CONSTANTLY
STRIVE TO MAKE
THE SHOPPING
EXPERIENCE
IN OUR STORES
AS CONVENIENT
AND SWIFT
AS POSSIBLE
49 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
In 2022, we continued to fine-tune Fix Price School, a remote
learning app for the Group's employees regardless of the
division they work in. The app has a user-friendly interface
and is a convenient tool for reading or listening to various
courses, taking qualification tests, and much more.
Web-System to Streamline New Store Openings
Another significant recent innovation at Fix Price has been
the introduction of a system that has greatly simplified
the new store opening process for our staff. The suite
of IT services developed by the Company has completely
automated the data collection process for available real
estate and calculates the economics of opening a new store
in a particular location.
Supporting the Supply Chain
This modern software solution is used to automate repetitive
tasks around managing deliveries, import supplies, custom
support, logistics, verifying certification, calculating planned
and actual costs, etc.
Improving the Customer Experience
Fix Price’s business is built around providing superior
service to customers while rolling out the latest innovations
and technologies across all related processes at our
checkouts. It allows us to boost productivity, drive customer
loyalty and achieve our strategic goals.
Self-Service Checkouts
On the back of a successful pilot in Moscow in 2021,
self-checkouts are being installed at our new stores
in Russia. Self-checkouts cut staff workload during
peak hours, and unlock extra capacity for more footfall
while optimising costs. By shortening checkout queues
and processing payments faster and more comfortably
for shoppers, we have encouraged customer loyalty.
Also, during the pandemic, self-checkouts helped keep
our customers safe by reducing contact with store
employees. In 2022, more than 1,260 self-checkouts were
put into operation, while the share of purchases through
them in stores reached an average of 37%. In the future, we
plan to grow the number of self-checkout machines in our
stores.
Payment by QR Code (Faster Payments System)
We constantly strive to make the shopping experience in our
stores as convenient and swift as possible, so we welcome
all the options that facilitate this. In 2022, our stores were
upgraded to accept QR code payments through the Bank
of Russia’s Faster Payments System (SBP). This service
allows Russian shoppers to instantly receive and transfer
funds commission-free. The majority of Russian banks are
connected to the SBP, which means our customers can
pay for their purchases from the comfort of their banking
app: they do not need to get out their bank cards, all they
have to do is scan a QR code generated at checkout. These
transactions charge a lower bank commission vs card
payments, which is beneficial for the Company.
WE CONSTANTLY
STRIVE TO MAKE
THE SHOPPING
EXPERIENCE
IN OUR STORES
AS CONVENIENT
AND SWIFT
AS POSSIBLE
49 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
E-Receipts
In 2022, like many other Russian retailers, we transitioned
to paperless receipts. This migration helps our customers
to have a more convenient way to track their expenses.
It also helps us to reduce receipt printing costs. In addition,
the reliability of cash registers grows thanks to the reduction
in the load on printers. Given the scale of our network
footprint in Russia, we also expect to be able to contribute
to reducing the level of household waste on city streets.
We believe that our customers will support our initiative
and show willingness to stop using paper receipts.
Mobile App for Customers
Although we are primarily a brick-and-mortar retailer, we are
always responsive to new customer demands and have
launched a mobile app for those who want to shop online.
Through the app, customers can place orders for either home
delivery or in-store pickup. The application was first launched
on Android in 2018 before coming out on iOS in 2019, and was
added to Huawei’s AppGallery in 2022.
SET Mark System for Tracking Sales of Labelled
Products at Checkout
SET Mark Centrum technology is tailored to prevent human
error at checkout. It is geared towards assisting with tasks
around tracking labelled products, preventing sales
of counterfeit goods, deterring theft, and preventing foul play
by competitors.
Set Loyalty Service (SLS)
SLS is the ultimate tool for processing any number of coupons
reliably and quickly. It has been rolled out across all
Company’s stores.
50 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
In 2022, like many other Russian retailers, we transitioned
to paperless receipts. This migration helps our customers
to have a more convenient way to track their expenses.
It also helps us to reduce receipt printing costs. In addition,
the reliability of cash registers grows thanks to the reduction
in the load on printers. Given the scale of our network
footprint in Russia, we also expect to be able to contribute
to reducing the level of household waste on city streets.
We believe that our customers will support our initiative
and show willingness to stop using paper receipts.
Mobile App for Customers
Although we are primarily a brick-and-mortar retailer, we are
always responsive to new customer demands and have
launched a mobile app for those who want to shop online.
Through the app, customers can place orders for either home
delivery or in-store pickup. The application was first launched
on Android in 2018 before coming out on iOS in 2019, and was
added to Huawei’s AppGallery in 2022.
SET Mark System for Tracking Sales of Labelled
Products at Checkout
SET Mark Centrum technology is tailored to prevent human
error at checkout. It is geared towards assisting with tasks
around tracking labelled products, preventing sales
of counterfeit goods, deterring theft, and preventing foul play
by competitors.
Set Loyalty Service (SLS)
SLS is the ultimate tool for processing any number of coupons
reliably and quickly. It has been rolled out across all
Company’s stores.
50 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
All financial data in this section are presented in accordance with IFRS 16, unless otherwise indicated. The Company has been using this standard
since 2019. At the same time, the Company in some cases may indicate the IAS 17 standard for comparison with historical data. All inaccuracies
in the calculations are due to rounding
Financial Review 1
In 2022, which was an extremely challenging year in all respects, Fix Price was able to deliver
strong financial results. We increased revenue by 20.5%, achieved EBITDA growth of 22.7%
and posted a record EBITDA margin of 19.5%, exceeding the guidance we gave during our 2021 IPO.
At the same time, the Company managed to further improve its historically strong financial position.
Key financial indicators over 2020–2022, RUB billion
2022 2021 2020 Change y-o-y, 2022 / 2021
Revenue 277.6 230.5 190.1 20.5%
Gross profit 92.0 73.4 61.5 25.3%
Gross profit margin, % 33.1 31.8 32.4 129 bps
SG&A (52.3) (42.0) (34.9) 24.5%
As % of revenue 18.8 18.2 18.4 61 bps
EBITDA 54.2 44.2 36.8 22.7%
EBITDA margin, % 19.5 19.2 19.4 36 bps
Net profit 21.4 21.4 17.6 0.1%
Net profit margin, % 7.7 9.3 9.2 (157) bps
Adjusted net debt 11.0 23.5 23.0 (53.3)%
Adjusted net debt/EBITDA 0.2x 0.5x 0.6x (0.3)x
CAPEX 12.0 6.3 6.2 91.4%
As % of revenue 4.3 2.7 3.2 160 bps
+20.5 %
revenue increase y-o-y
+22.7 %
EBITDA growth achieved in 2022
51 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
since 2019. At the same time, the Company in some cases may indicate the IAS 17 standard for comparison with historical data. All inaccuracies
in the calculations are due to rounding
Financial Review 1
In 2022, which was an extremely challenging year in all respects, Fix Price was able to deliver
strong financial results. We increased revenue by 20.5%, achieved EBITDA growth of 22.7%
and posted a record EBITDA margin of 19.5%, exceeding the guidance we gave during our 2021 IPO.
At the same time, the Company managed to further improve its historically strong financial position.
Key financial indicators over 2020–2022, RUB billion
2022 2021 2020 Change y-o-y, 2022 / 2021
Revenue 277.6 230.5 190.1 20.5%
Gross profit 92.0 73.4 61.5 25.3%
Gross profit margin, % 33.1 31.8 32.4 129 bps
SG&A (52.3) (42.0) (34.9) 24.5%
As % of revenue 18.8 18.2 18.4 61 bps
EBITDA 54.2 44.2 36.8 22.7%
EBITDA margin, % 19.5 19.2 19.4 36 bps
Net profit 21.4 21.4 17.6 0.1%
Net profit margin, % 7.7 9.3 9.2 (157) bps
Adjusted net debt 11.0 23.5 23.0 (53.3)%
Adjusted net debt/EBITDA 0.2x 0.5x 0.6x (0.3)x
CAPEX 12.0 6.3 6.2 91.4%
As % of revenue 4.3 2.7 3.2 160 bps
+20.5 %
revenue increase y-o-y
+22.7 %
EBITDA growth achieved in 2022
51 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
P&L Highlights
In 2022, Fix Price’s revenue rose by 20.5% to RUB 277.6 billion
on the back of growth both in retail revenue
(+21.1% year-on-year) and in wholesale revenue
(+15.8% year-on-year). Retail revenue totalled RUB 246.2 billion,
driven by organic growth in Company-operated stores
(+671 new stores) and LFL sales growth (+10.1% year-on-year).
Wholesale revenue reached RUB 31.4 billion
and was supported by new franchise stores (+88 new stores).
The share of wholesale revenue in the Company’s total
revenue for 2022 slightly decreased to 11.3% from 11.8% in 2021.
The Company’s gross profit rose by 25.3% to RUB 92.0 billion
in 2022 with a gross margin increase of 129 bps to 33.1%,
compared to 31.8% in 2021, reflecting the efficient
management of the assortment and price point mix.
The gross margin growth was also supported by favourable
foreign exchange rates and stabilised import shipping costs
versus 2021 levels. This achievement was partially offset
by the lower share of non-food goods in the retail sales mix.
SG&A breakdown in 2021–2022, % of revenue
10.2 3.6 1.1 0.8 3.1
9.1 4.0 1.1 0.7 3.3
18.8 2022
2021
Staff costs
Depreciation of
right-of-use assets
Other D&A
18.2
Rental expenses
Other SG&A
In 2022, selling, general and administrative expenses
(SG&A) increased by 24.5% to RUB 52.3 billion, compared
to RUB 42.0 billion in 2021. The overall growth of operating
expenses was mainly attributable to a rise in staff costs —
associated with the expansion of our network — alongside
an increase in rental and utilities expenses, depreciation
and amortisation (D&A), bank charges, and security
and maintenance costs.
SG&A expenses as a percentage of revenue increased
by 61 bps to 18.8% in 2022 due to the higher share of staff
costs and rental expenses, which was partially offset
by the decrease in all other components of SG&A
as a percentage of revenue.
Staff costs were up 109 bps to 10.2% of revenue as a result
of the continued salary indexation process throughout 2022,
which was aimed at improving Fix Price’s competitive
position in the labour market in our countries of operation,
as well as other incentives.
In 2022, rental expenses under IFRS 16 increased by 10 bps
to 0.8% of revenue (0.7% in 2021), as the share of floating-
rate contracts increased to 65%, compared to 57%
in 2021. We strive to be flexible in all areas of our business
and continue to opt for variable as opposed to fixed lease
contracts. This was reflected in the growing share of variable
lease contracts as a percentage of total lease contracts.
At the same time, rental expenses under IAS 17 improved
by 32 bps to 5.3% of retail revenue, in line with our IPO
guidance, reflecting the Company’s efforts to improve lease
terms.
D&A expenses were down by 40 bps to 4.7%
of revenue in 2022, compared to 5.1% in 2021.
Depreciation of right-of-use assets decreased by 39 bps
to 3.6% of revenue due to a decrease in the amount
19.5 %
of right-of-use assets on the back of higher discount rates
in 2022 compared to the previous year. The share of other
depreciation and amortisation expenses slightly slipped
by 1 bps.
Bank charges decreased by 9 bps to 1.0% of revenue,
reflecting lower commissions on bank card transactions
while a Central Bank of Russia resolution to cut acquiring
commissions for businesses selling socially-important
products and services remained in force from March
to August 2022. This was partially offset by continued growth
in the share of non-cash payments.
Advertising costs were down 7 bps to 0.3% of revenue due
to cost optimisation and a positive operating leverage effect.
Costs for security services, repair and maintenance, utilities,
and other expenses remained almost flat year-on-year at 0.7%,
0.4%, 0.3%, and 0.5% of revenue, respectively.
Other operating income and the share of profit of associates
increased by 9 bps from 0.4% to 0.5% of revenue, mainly due
to higher proceeds from the sale of waste such as cardboard
and stretch film for recycling, as well as income received
from the depositary bank in connection with the IPO, which
is accrued on a linear basis during the life of the depositary
facility.
As a result, EBITDA rose by 22.7% to RUB 54.2 billion
in 2022 as compared to RUB 44.2 billion in the previous year.
EBITDA margin increased by 36 bps to a record high of 19.5%,
well above our IPO guidance.
+36 bps y-o-y
Record high EBITDA margin
outstripping IPO guidance
52 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
In 2022, Fix Price’s revenue rose by 20.5% to RUB 277.6 billion
on the back of growth both in retail revenue
(+21.1% year-on-year) and in wholesale revenue
(+15.8% year-on-year). Retail revenue totalled RUB 246.2 billion,
driven by organic growth in Company-operated stores
(+671 new stores) and LFL sales growth (+10.1% year-on-year).
Wholesale revenue reached RUB 31.4 billion
and was supported by new franchise stores (+88 new stores).
The share of wholesale revenue in the Company’s total
revenue for 2022 slightly decreased to 11.3% from 11.8% in 2021.
The Company’s gross profit rose by 25.3% to RUB 92.0 billion
in 2022 with a gross margin increase of 129 bps to 33.1%,
compared to 31.8% in 2021, reflecting the efficient
management of the assortment and price point mix.
The gross margin growth was also supported by favourable
foreign exchange rates and stabilised import shipping costs
versus 2021 levels. This achievement was partially offset
by the lower share of non-food goods in the retail sales mix.
SG&A breakdown in 2021–2022, % of revenue
10.2 3.6 1.1 0.8 3.1
9.1 4.0 1.1 0.7 3.3
18.8 2022
2021
Staff costs
Depreciation of
right-of-use assets
Other D&A
18.2
Rental expenses
Other SG&A
In 2022, selling, general and administrative expenses
(SG&A) increased by 24.5% to RUB 52.3 billion, compared
to RUB 42.0 billion in 2021. The overall growth of operating
expenses was mainly attributable to a rise in staff costs —
associated with the expansion of our network — alongside
an increase in rental and utilities expenses, depreciation
and amortisation (D&A), bank charges, and security
and maintenance costs.
SG&A expenses as a percentage of revenue increased
by 61 bps to 18.8% in 2022 due to the higher share of staff
costs and rental expenses, which was partially offset
by the decrease in all other components of SG&A
as a percentage of revenue.
Staff costs were up 109 bps to 10.2% of revenue as a result
of the continued salary indexation process throughout 2022,
which was aimed at improving Fix Price’s competitive
position in the labour market in our countries of operation,
as well as other incentives.
In 2022, rental expenses under IFRS 16 increased by 10 bps
to 0.8% of revenue (0.7% in 2021), as the share of floating-
rate contracts increased to 65%, compared to 57%
in 2021. We strive to be flexible in all areas of our business
and continue to opt for variable as opposed to fixed lease
contracts. This was reflected in the growing share of variable
lease contracts as a percentage of total lease contracts.
At the same time, rental expenses under IAS 17 improved
by 32 bps to 5.3% of retail revenue, in line with our IPO
guidance, reflecting the Company’s efforts to improve lease
terms.
D&A expenses were down by 40 bps to 4.7%
of revenue in 2022, compared to 5.1% in 2021.
Depreciation of right-of-use assets decreased by 39 bps
to 3.6% of revenue due to a decrease in the amount
19.5 %
of right-of-use assets on the back of higher discount rates
in 2022 compared to the previous year. The share of other
depreciation and amortisation expenses slightly slipped
by 1 bps.
Bank charges decreased by 9 bps to 1.0% of revenue,
reflecting lower commissions on bank card transactions
while a Central Bank of Russia resolution to cut acquiring
commissions for businesses selling socially-important
products and services remained in force from March
to August 2022. This was partially offset by continued growth
in the share of non-cash payments.
Advertising costs were down 7 bps to 0.3% of revenue due
to cost optimisation and a positive operating leverage effect.
Costs for security services, repair and maintenance, utilities,
and other expenses remained almost flat year-on-year at 0.7%,
0.4%, 0.3%, and 0.5% of revenue, respectively.
Other operating income and the share of profit of associates
increased by 9 bps from 0.4% to 0.5% of revenue, mainly due
to higher proceeds from the sale of waste such as cardboard
and stretch film for recycling, as well as income received
from the depositary bank in connection with the IPO, which
is accrued on a linear basis during the life of the depositary
facility.
As a result, EBITDA rose by 22.7% to RUB 54.2 billion
in 2022 as compared to RUB 44.2 billion in the previous year.
EBITDA margin increased by 36 bps to a record high of 19.5%,
well above our IPO guidance.
+36 bps y-o-y
Record high EBITDA margin
outstripping IPO guidance
52 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Gross margin over 2020–2022,
%
2022
2021
2020
33.1
31.8
32.4
IFRS 16, RUB bln IAS 17, RUB bln
54.2 43.1
44.2 34.2
20.0%
22.7%
36.8 28.6
2022
2021
2020
IFRS 16, %
EBITDA margin over 2020–2022, %
IFRS 16 IAS 17
19.5 15.5
19.2 14.8
19.4 15.1
2022
2021
2020
EBITDA growth over 2020–2022
Net finance costs in 2022 grew by 82.2% to RUB 3.0 billion,
compared to RUB 1.6 billion in 2021. The increase was mainly
driven by higher average loan rates, as well as by greater
interest expense on lease liabilities. This growth was partially
offset by an increase in interest income from bank deposits.
In 2022, we recorded an FX loss of RUB 0.2 billion,
compared to a RUB 0.1 billion FX loss in the previous year.
The FY 2022 loss was primarily attributable to the high
FX volatility in 1H 2022, the loss on the revaluation
of the Group’s foreign currency-denominated bank
accounts, the loss on the revaluation of rouble-denominated
intra-group accounts payable of the Group’s international
entities, and the loss on forward contracts. This was
mainly offset in 2H 2022, when the Company posted
gains amid the weakening of the rouble, which led
to a gain on the revaluation of the Group’s foreign
currency-denominated bank accounts, deposits and forward
contracts, and rouble-denominated liabilities of the Group’s
international entities.
The Group’s total income tax expense stood
at RUB 16.4 billion versus RUB 9.2 billion for 2021.
As a result, Fix Price’s net profit stood at RUB 21.4 billion
in 2022, with a net profit margin of 7.7%.
53 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2022
2021
2020
33.1
31.8
32.4
IFRS 16, RUB bln IAS 17, RUB bln
54.2 43.1
44.2 34.2
20.0%
22.7%
36.8 28.6
2022
2021
2020
IFRS 16, %
EBITDA margin over 2020–2022, %
IFRS 16 IAS 17
19.5 15.5
19.2 14.8
19.4 15.1
2022
2021
2020
EBITDA growth over 2020–2022
Net finance costs in 2022 grew by 82.2% to RUB 3.0 billion,
compared to RUB 1.6 billion in 2021. The increase was mainly
driven by higher average loan rates, as well as by greater
interest expense on lease liabilities. This growth was partially
offset by an increase in interest income from bank deposits.
In 2022, we recorded an FX loss of RUB 0.2 billion,
compared to a RUB 0.1 billion FX loss in the previous year.
The FY 2022 loss was primarily attributable to the high
FX volatility in 1H 2022, the loss on the revaluation
of the Group’s foreign currency-denominated bank
accounts, the loss on the revaluation of rouble-denominated
intra-group accounts payable of the Group’s international
entities, and the loss on forward contracts. This was
mainly offset in 2H 2022, when the Company posted
gains amid the weakening of the rouble, which led
to a gain on the revaluation of the Group’s foreign
currency-denominated bank accounts, deposits and forward
contracts, and rouble-denominated liabilities of the Group’s
international entities.
The Group’s total income tax expense stood
at RUB 16.4 billion versus RUB 9.2 billion for 2021.
As a result, Fix Price’s net profit stood at RUB 21.4 billion
in 2022, with a net profit margin of 7.7%.
53 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Financial Position and Cash Flow Highlights
The Company’s balance sheet remained strong in 2022,
reflecting Fix Price’s conservative financing policy.
Current loans and borrowings decreased by RUB 3.9 billion
from the beginning of the year to RUB 17.6 billion,
as the Company reduced its current debt in response
to an elevated interest rate environment.
Total loans and borrowings remained stable
at RUB 21.9 billion as at 31 December 2022. Lease
liabilities grew to RUB 12.6 billion from RUB 10.7 billion
at the start of the year, driven by hikes in market interest
rates and an increase in the number of lease contracts
on the back of store network expansion. In the first half
of the year the Company raised long-term debt that
amounted to RUB 4.4 billion as of the year-end. As a result,
Fix Price’s total loans, borrowings and lease liabilities
amounted to RUB 34.5 billion, up by 7.1% from the start
of the year.
As at the end of the reporting period, the Company’s
IAS 17-based adjusted net cash position was RUB
1.7 billion, versus RUB 12.7 billion adjusted net debt
at the start of the year, on the back of accumulated
cash reserves. The Company’s IAS 17-based adjusted
net cash to EBITDA ratio improved to 0.04x, compared
to an IAS 17-based adjusted net debt to EBITDA ratio
of 0.4x as at 31 December 2021.
Adjusted net debt and adjusted net debt
to EBITDA under IFRS 16 in 2020–2022
Adjusted net debt,
RUB bln
Adjusted net debt
to EBITDA
11.0
0.2x
23.5
0.5x
23.0
0.6x
2022
2021
2020
Adjusted net (cash) / debt and adjusted net
(cash) / debt to EBITDA under IAS 17 in 2020–2022
Adjusted net
(cash) / debt, RUB bln
Adjusted net
(cash) / debt to EBITDA
(1.7)
(0.04)x
12.7
0.4x
13.0
0.5x
2022
2021
2020
The Group’s net trade working capital improved
to RUB 9.1 billion as at 31 December 2022, down from a peak
of RUB 18.0 billion as at 30 June 2022, but slightly
up from RUB 7.9 billion as at 2021 end. The Company
continued to pursue a diligent approach towards ordering
assortment in advance to ensure the availability of goods
on store shelves in case of supply chain disruptions.
Continued normalisation of payment terms with suppliers
contributed to improve this metric throughout the year.
CAPEX for 2022 amounted to RUB 12.0 billion,
up from RUB 6.3 billion in 2021, driven by the active
construction of two DCs slated for launch in 2023. CAPEX
as a percentage of revenue grew to 4.3% from 2.7% a year
before.
54 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
The Company’s balance sheet remained strong in 2022,
reflecting Fix Price’s conservative financing policy.
Current loans and borrowings decreased by RUB 3.9 billion
from the beginning of the year to RUB 17.6 billion,
as the Company reduced its current debt in response
to an elevated interest rate environment.
Total loans and borrowings remained stable
at RUB 21.9 billion as at 31 December 2022. Lease
liabilities grew to RUB 12.6 billion from RUB 10.7 billion
at the start of the year, driven by hikes in market interest
rates and an increase in the number of lease contracts
on the back of store network expansion. In the first half
of the year the Company raised long-term debt that
amounted to RUB 4.4 billion as of the year-end. As a result,
Fix Price’s total loans, borrowings and lease liabilities
amounted to RUB 34.5 billion, up by 7.1% from the start
of the year.
As at the end of the reporting period, the Company’s
IAS 17-based adjusted net cash position was RUB
1.7 billion, versus RUB 12.7 billion adjusted net debt
at the start of the year, on the back of accumulated
cash reserves. The Company’s IAS 17-based adjusted
net cash to EBITDA ratio improved to 0.04x, compared
to an IAS 17-based adjusted net debt to EBITDA ratio
of 0.4x as at 31 December 2021.
Adjusted net debt and adjusted net debt
to EBITDA under IFRS 16 in 2020–2022
Adjusted net debt,
RUB bln
Adjusted net debt
to EBITDA
11.0
0.2x
23.5
0.5x
23.0
0.6x
2022
2021
2020
Adjusted net (cash) / debt and adjusted net
(cash) / debt to EBITDA under IAS 17 in 2020–2022
Adjusted net
(cash) / debt, RUB bln
Adjusted net
(cash) / debt to EBITDA
(1.7)
(0.04)x
12.7
0.4x
13.0
0.5x
2022
2021
2020
The Group’s net trade working capital improved
to RUB 9.1 billion as at 31 December 2022, down from a peak
of RUB 18.0 billion as at 30 June 2022, but slightly
up from RUB 7.9 billion as at 2021 end. The Company
continued to pursue a diligent approach towards ordering
assortment in advance to ensure the availability of goods
on store shelves in case of supply chain disruptions.
Continued normalisation of payment terms with suppliers
contributed to improve this metric throughout the year.
CAPEX for 2022 amounted to RUB 12.0 billion,
up from RUB 6.3 billion in 2021, driven by the active
construction of two DCs slated for launch in 2023. CAPEX
as a percentage of revenue grew to 4.3% from 2.7% a year
before.
54 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Net trading working capital
1
over 2020–2022,
RUB billion
27.0
40.6 41.0
0.9 1.8 2.5
(26.8)
2022 2021 2020
(34.5) (34.5)
1.1
7.9 9.1
Inventories
Accounts receivable
Accounts payable
Net trade working capital
2021
RUB 6.3 bln
RUB 12.0 bln
2022
51
55
15 30
31
18
New store openings DCs IT and other
1 Net trade working capital calculated as inventories plus receivables and other financial assets less payables and other financial liabilities
2 Capital expenditure is calculated as cash flow related to the acquisition of property, plant and equipment and intangible assets for the relevant
period
3 FCF calculated as Net cash flows generated from operating activities less Net capital expenditures (calculated as Purchase of property, plant and
equipment plus Purchase of intangibles less Proceeds from sale of property, plant and equipment)
CAPEX over 2021–2022, RUB billion
CAPEX, RUB billion As % of revenue
DC CAPEX as % of revenue
12.0
4.3 2.4
6.3
2.7 0.8
6.2
3.2 1.2
2022
2021
2020
CAPEX 2 composition over 2021–2022, %
FCF 3 over 2020–2022, RUB billion
9.9 9.2
15.0 9.9
19.1
24.9
24.1
16.6 7.5
2022
2021
2020
FCF (post-lease payments)
Lease payments
9.0
8.3
12.7
FCF (% of revenue)
55 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
RUB billion
27.0
40.6 41.0
0.9 1.8 2.5
(26.8)
2022 2021 2020
(34.5) (34.5)
1.1
7.9 9.1
Inventories
Accounts receivable
Accounts payable
Net trade working capital
2021
RUB 6.3 bln
RUB 12.0 bln
2022
51
55
15 30
31
18
New store openings DCs IT and other
1 Net trade working capital calculated as inventories plus receivables and other financial assets less payables and other financial liabilities
2 Capital expenditure is calculated as cash flow related to the acquisition of property, plant and equipment and intangible assets for the relevant
period
3 FCF calculated as Net cash flows generated from operating activities less Net capital expenditures (calculated as Purchase of property, plant and
equipment plus Purchase of intangibles less Proceeds from sale of property, plant and equipment)
CAPEX over 2021–2022, RUB billion
CAPEX, RUB billion As % of revenue
DC CAPEX as % of revenue
12.0
4.3 2.4
6.3
2.7 0.8
6.2
3.2 1.2
2022
2021
2020
CAPEX 2 composition over 2021–2022, %
FCF 3 over 2020–2022, RUB billion
9.9 9.2
15.0 9.9
19.1
24.9
24.1
16.6 7.5
2022
2021
2020
FCF (post-lease payments)
Lease payments
9.0
8.3
12.7
FCF (% of revenue)
55 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
SUSTAINABILITY
Since its inception, Fix Price has been committed
to responsible business practices, and we have
made great progress on building ESG awareness
among our employees and stakeholders
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Since its inception, Fix Price has been committed
to responsible business practices, and we have
made great progress on building ESG awareness
among our employees and stakeholders
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Our Approach to Sustainability Management
We understand the importance
of the ESG agenda and have succeeded
in raising ESG awareness among our
employees and stakeholders.
In 2021, we conducted a thorough assessment of Fix Price’s
ESG practices. We then identified four key strategic priorities,
which were approved by our ESG Committee, and what we
have dubbed the 4Ps: Product, People, Partners, and Planet.
We charted a roadmap and are assessing initiatives that will
enable us to carry out viable changes and contribute to these
priority areas.
Responsibility for managing sustainability issues
at the Company is set at the strategic and operational levels.
Both the Board of Directors, which makes decisions based
on recommendations of its ESG Committee, and each
Fix Price business unit are involved in the sustainability
management process.
In 2021, the Board of Directors set up an ESG Committee
which assists the Board in supervising sustainability issues.
The committee is in charge of managing ESG factors
at a strategic level. It oversees the implementation of Fix
Price’s sustainability agenda and how it is integrated
into the Company’s business processes.
The Group has drafted and rolled out a range of internal
documents, including the Environmental, Health & Safety
Policy; Modern Anti-Slavery and Human Trafficking Policy;
Anti-Money Laundering Policy; Anti-Bribery and Corruption
Policy; and Business Ethics Policy (the Code of Conduct). About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
57
We understand the importance
of the ESG agenda and have succeeded
in raising ESG awareness among our
employees and stakeholders.
In 2021, we conducted a thorough assessment of Fix Price’s
ESG practices. We then identified four key strategic priorities,
which were approved by our ESG Committee, and what we
have dubbed the 4Ps: Product, People, Partners, and Planet.
We charted a roadmap and are assessing initiatives that will
enable us to carry out viable changes and contribute to these
priority areas.
Responsibility for managing sustainability issues
at the Company is set at the strategic and operational levels.
Both the Board of Directors, which makes decisions based
on recommendations of its ESG Committee, and each
Fix Price business unit are involved in the sustainability
management process.
In 2021, the Board of Directors set up an ESG Committee
which assists the Board in supervising sustainability issues.
The committee is in charge of managing ESG factors
at a strategic level. It oversees the implementation of Fix
Price’s sustainability agenda and how it is integrated
into the Company’s business processes.
The Group has drafted and rolled out a range of internal
documents, including the Environmental, Health & Safety
Policy; Modern Anti-Slavery and Human Trafficking Policy;
Anti-Money Laundering Policy; Anti-Bribery and Corruption
Policy; and Business Ethics Policy (the Code of Conduct). About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
57
UN Sustainable Development Goals
SDG 8 SDG 12 SDG 13
Primary SDGs
embrace three goals where
Fix Price can make the biggest
contribution:
Decent Work and
Economic Growth
Responsible
Consumption and
Production
Climate Action
Secondary SDGs
comprise four goals that are
still core priorities for us, but to
which, due to the specifics of
our business, we can only offer
a more limited contribution:
SDG 2 SDG 3 SDG 5 SDG 10
Zero Hunger Good Health and
Well-Being
Gender Equality Reduced
Inequalities
When defining our 4Ps, we considered the scope for delivering on the Sustainable Development Goals (SDGs) established
by the United Nations. Out of the total seventeen, we selected seven SDGs where Fix Price can deliver the largest impact
and divided them into two groups: primary and secondary SDGs. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
58
SDG 8 SDG 12 SDG 13
Primary SDGs
embrace three goals where
Fix Price can make the biggest
contribution:
Decent Work and
Economic Growth
Responsible
Consumption and
Production
Climate Action
Secondary SDGs
comprise four goals that are
still core priorities for us, but to
which, due to the specifics of
our business, we can only offer
a more limited contribution:
SDG 2 SDG 3 SDG 5 SDG 10
Zero Hunger Good Health and
Well-Being
Gender Equality Reduced
Inequalities
When defining our 4Ps, we considered the scope for delivering on the Sustainable Development Goals (SDGs) established
by the United Nations. Out of the total seventeen, we selected seven SDGs where Fix Price can deliver the largest impact
and divided them into two groups: primary and secondary SDGs. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
58
Stakeholder Engagement
Fix Price engages with various stakeholders and is committed to keeping an ongoing open dialogue
with them built on transparency. Our key stakeholders include customers, employees, suppliers,
local communities, government authorities, investors and shareholders, and the media.
Stakeholders Key Engagement Topics Interaction Channels
Customers
Employees
(full-time
and contractors)
Investors
and shareholders
• Product range, prices and on-shelf
availability
• Product quality and safety
• Healthy products
• Loyalty programme
• Consumer data privacy
• Fair pay and incentives
• Safe working conditions and well-being
• Opportunities for professional
and personal growth and education
• Diversity and inclusion
• Compliance, business ethics and anti-
corruption
• The Company’s performance
• Strategic development and expansion plans
• Protection of shareholder rights
• Sustainability issues, e.g.:
– product quality and safety
– motivation and employee incentives
– climate impact
– business ethics and compliance
– corporate governance
• Offline communications (hand-out materials, price tags, direct in-
store communications, etc.)
• Hotline
• Email
• Publications on the Company’s website (including feedback forms)
• Social media
• Surveys
• Regular target audience research
• Loyalty programme
• Mobile app
• Direct communication with employees
• Intranet
• Email
• The Company’s internal policies, instructions and documents
• The Company’s training portal and courses
• Hotline and Ethics and Compliance Committee
• Social media
• Direct communication with investors
• Regulatory disclosures and publications on the Company’s website
• General Meetings of Shareholders About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
59
Fix Price engages with various stakeholders and is committed to keeping an ongoing open dialogue
with them built on transparency. Our key stakeholders include customers, employees, suppliers,
local communities, government authorities, investors and shareholders, and the media.
Stakeholders Key Engagement Topics Interaction Channels
Customers
Employees
(full-time
and contractors)
Investors
and shareholders
• Product range, prices and on-shelf
availability
• Product quality and safety
• Healthy products
• Loyalty programme
• Consumer data privacy
• Fair pay and incentives
• Safe working conditions and well-being
• Opportunities for professional
and personal growth and education
• Diversity and inclusion
• Compliance, business ethics and anti-
corruption
• The Company’s performance
• Strategic development and expansion plans
• Protection of shareholder rights
• Sustainability issues, e.g.:
– product quality and safety
– motivation and employee incentives
– climate impact
– business ethics and compliance
– corporate governance
• Offline communications (hand-out materials, price tags, direct in-
store communications, etc.)
• Hotline
• Publications on the Company’s website (including feedback forms)
• Social media
• Surveys
• Regular target audience research
• Loyalty programme
• Mobile app
• Direct communication with employees
• Intranet
• The Company’s internal policies, instructions and documents
• The Company’s training portal and courses
• Hotline and Ethics and Compliance Committee
• Social media
• Direct communication with investors
• Regulatory disclosures and publications on the Company’s website
• General Meetings of Shareholders About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
59
Suppliers
Media
Government
authorities
Local
communities
• Product development and supply
• Product quality and safety
• Business ethics and compliance
• Transparent and sustainable supply chain
• Company performance and strategy
• Sustainability issues
• Business ethics and compliance
• Business ethics and compliance
• Product quality and safety
• Applicable laws and regulations
• Opportunities for local suppliers
• Economic contribution to our regions of operation
• Charitable and social programmes
• Affordable and high-quality products
• Local employment opportunities
• Promotion of sport
• Direct communication with suppliers
• Audits and tests
• Hotline
• Publications on the Company’s website
• Direct communication with the media
• Publications on the Company’s website
• Regulatory compliance
• Publications on the Company’s website
• Industry associations and federal- and regional-level
working groups
• Direct communication with customers and employees
• Publications on the Company’s website
• Social media
Stakeholders Key Engagement Topics Interaction Channels About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
60
Media
Government
authorities
Local
communities
• Product development and supply
• Product quality and safety
• Business ethics and compliance
• Transparent and sustainable supply chain
• Company performance and strategy
• Sustainability issues
• Business ethics and compliance
• Business ethics and compliance
• Product quality and safety
• Applicable laws and regulations
• Opportunities for local suppliers
• Economic contribution to our regions of operation
• Charitable and social programmes
• Affordable and high-quality products
• Local employment opportunities
• Promotion of sport
• Direct communication with suppliers
• Audits and tests
• Hotline
• Publications on the Company’s website
• Direct communication with the media
• Publications on the Company’s website
• Regulatory compliance
• Publications on the Company’s website
• Industry associations and federal- and regional-level
working groups
• Direct communication with customers and employees
• Publications on the Company’s website
• Social media
Stakeholders Key Engagement Topics Interaction Channels About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
60
1
Includes laboratory tests to obtain certifications and declarations of conformity for imported products; tests performed in external laboratories to confirm product composition, quality and safety; inspections by our in-house
Quality Control Centre; and additional tests performed in external laboratories after in-house inspections
2 Based on publicly available Rosstat data for 2021
3 Based on Vector Market Research studies conducted in autumn 2021 and autumn 2022 of Fix Price’s target customer base in cities with a population of over 1 million people
Product
Our Accomplishments in 2022 Our Approach to Pricing
and Product Range
Since its inception, Fix Price has strived to offer the most
competitive pricing without compromising on either
the quality or variety of the product mix. Our value proposition
is designed to meet the needs of the entire household
and to improve the lives of our customers by offering them
savings on products they use every day. They can always find
what they are looking for in our unique, constantly refreshed
and affordable product range.
Fix Price has stores in even the most remote locations.
Our geography encompasses 80 regions of Russia
and neighbouring countries. Our stores are conveniently
placed near key traffic intersections, with easy access
via public transportation and within highly populated
residential districts.
According to Rosstat, around 70% of Russian households
have a monthly income below RUB 45,000. 2 In this context,
we are committed to offering access to the goods they need
to the widest audience possible, regardless of their income
or the broader economy. We have also observed rising
demand among the more affluent shoppers with an average
household monthly income exceeding RUB 50,000. The share
of these customers in 2022 was 4 pps higher than in 2021. 3
The growing popularity of our stores within the various
target segments and social groups proves our pricing
and assortment strategy resonate with consumers and our
treasure hunt concept is successful.
In spring 2022, Fix Price
was recognised at the 12th
annual Golden Bear
Cub National Awards
for its achievements
in providing goods
for kids, specifically for its
private label Kid’s Fantasy,
which encompasses
educational water colouring
cards, a multiple-use water
colouring book and a set
of colour stencils
~2,000 SKUs
in our assortment
60 %
Net Promoter Score
(NPS)
~22 million
registered loyalty
cardholders
In autumn 2022,
at the Quality
Guarantee 2022
contest, which
celebrates excellence
in food products,
three Fix Price
products won gold
medals: creamy
waffles, dates
and roasted shelled
peanuts
Fix Price’s loyalty
programme was
named the Project
of the Year at the
Time for Innovations
Awards
3,107
quality and safety tests
performed 1 including
2,018
voluntary tests About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
61
Quality Control Centre; and additional tests performed in external laboratories after in-house inspections
2 Based on publicly available Rosstat data for 2021
3 Based on Vector Market Research studies conducted in autumn 2021 and autumn 2022 of Fix Price’s target customer base in cities with a population of over 1 million people
Product
Our Accomplishments in 2022 Our Approach to Pricing
and Product Range
Since its inception, Fix Price has strived to offer the most
competitive pricing without compromising on either
the quality or variety of the product mix. Our value proposition
is designed to meet the needs of the entire household
and to improve the lives of our customers by offering them
savings on products they use every day. They can always find
what they are looking for in our unique, constantly refreshed
and affordable product range.
Fix Price has stores in even the most remote locations.
Our geography encompasses 80 regions of Russia
and neighbouring countries. Our stores are conveniently
placed near key traffic intersections, with easy access
via public transportation and within highly populated
residential districts.
According to Rosstat, around 70% of Russian households
have a monthly income below RUB 45,000. 2 In this context,
we are committed to offering access to the goods they need
to the widest audience possible, regardless of their income
or the broader economy. We have also observed rising
demand among the more affluent shoppers with an average
household monthly income exceeding RUB 50,000. The share
of these customers in 2022 was 4 pps higher than in 2021. 3
The growing popularity of our stores within the various
target segments and social groups proves our pricing
and assortment strategy resonate with consumers and our
treasure hunt concept is successful.
In spring 2022, Fix Price
was recognised at the 12th
annual Golden Bear
Cub National Awards
for its achievements
in providing goods
for kids, specifically for its
private label Kid’s Fantasy,
which encompasses
educational water colouring
cards, a multiple-use water
colouring book and a set
of colour stencils
~2,000 SKUs
in our assortment
60 %
Net Promoter Score
(NPS)
~22 million
registered loyalty
cardholders
In autumn 2022,
at the Quality
Guarantee 2022
contest, which
celebrates excellence
in food products,
three Fix Price
products won gold
medals: creamy
waffles, dates
and roasted shelled
peanuts
Fix Price’s loyalty
programme was
named the Project
of the Year at the
Time for Innovations
Awards
3,107
quality and safety tests
performed 1 including
2,018
voluntary tests About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
61
Supplier Relations and Quality Assurance
We take pride in the fact that we ourselves love to shop
at Fix Price, which is why we place such a strong emphasis
on quality assurance and have implemented a robust quality
control system. We monitor our products at all stages,
from the manufacturer and distribution centre to the store
shelf. Our quality control system is driven by a risk-based
approach with measures depending on the category
of goods.
Category Management Department
∙ Procures goods in Russia and abroad
∙ Controls the entire supply chain,
from product development to the store shelf
Logistics Department
∙ Ensures goods are delivered safely and on time
∙ Arranges certification and declaration of conformity
for imported goods
∙ Facilitates the verification of documents and condition
upon delivery and warehousing
Quality Control Centre
∙ Controls product quality and carries out checks of goods
on the shelves
∙ Performs audits of private label suppliers
WE TAKE PRIDE
IN THE FACT THAT
WE OURSELVES
LOVE TO SHOP
AT FIX PRICE
We have built our workflows around Fix Price specialists
providing expert support at each stage of the product’s life
cycle until it is sold.
Fix Price strives to support its customers. We provide equal
opportunities to all our customers by offering the same prices
in all our locations 1 and keeping them low despite market
fluctuations. We carefully build our assortment and ensure
stock availability so that our customers could find something
to their liking among a broad range of products anywhere
across the chain.
The year of 2022 was marked by geopolitical tensions, market
volatility and an up-ended supply chain. In the reporting year,
we nonetheless retained our strategic priority of offering
affordable food and non-food products and providing
equal access to our product mix to all customers across our
footprint.
1 With the exception of the most remote regions (e.g. Russia’s Far East,
etc.) and other countries where the assortment and/or prices may vary About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
62
We take pride in the fact that we ourselves love to shop
at Fix Price, which is why we place such a strong emphasis
on quality assurance and have implemented a robust quality
control system. We monitor our products at all stages,
from the manufacturer and distribution centre to the store
shelf. Our quality control system is driven by a risk-based
approach with measures depending on the category
of goods.
Category Management Department
∙ Procures goods in Russia and abroad
∙ Controls the entire supply chain,
from product development to the store shelf
Logistics Department
∙ Ensures goods are delivered safely and on time
∙ Arranges certification and declaration of conformity
for imported goods
∙ Facilitates the verification of documents and condition
upon delivery and warehousing
Quality Control Centre
∙ Controls product quality and carries out checks of goods
on the shelves
∙ Performs audits of private label suppliers
WE TAKE PRIDE
IN THE FACT THAT
WE OURSELVES
LOVE TO SHOP
AT FIX PRICE
We have built our workflows around Fix Price specialists
providing expert support at each stage of the product’s life
cycle until it is sold.
Fix Price strives to support its customers. We provide equal
opportunities to all our customers by offering the same prices
in all our locations 1 and keeping them low despite market
fluctuations. We carefully build our assortment and ensure
stock availability so that our customers could find something
to their liking among a broad range of products anywhere
across the chain.
The year of 2022 was marked by geopolitical tensions, market
volatility and an up-ended supply chain. In the reporting year,
we nonetheless retained our strategic priority of offering
affordable food and non-food products and providing
equal access to our product mix to all customers across our
footprint.
1 With the exception of the most remote regions (e.g. Russia’s Far East,
etc.) and other countries where the assortment and/or prices may vary About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
62
Prior to
manufacturing
Accredited laboratories test samples of certain goods
to obtain certification and declarations of conformity
Tasting sessions for certain product samples
Internal checks and laboratory testing of product
samples, if necessary
During
manufacture
Remote inspections of samples
Physical inspections of samples
by category managers
Testing at external laboratories after manufacture
to confirm product composition, quality and safety
Transportation
Visual inspection of goods
by agents prior to shipping
Warehousing
Inspection of goods and associated documentation
upon acceptance at distribution centres
Regular inspections for package integrity
by the quality controller
Distribution
to stores
Inspection of goods and associated documentation
upon delivery to the store
Periodic spot checks at stores by the Quality Control
Centre and laboratory testing, if necessary
Russian private labels Imported goods Branded products
Approaches to
Quality Control
How we inspect quality
at different stages of the product
life cycle, right up until sale About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
63
manufacturing
Accredited laboratories test samples of certain goods
to obtain certification and declarations of conformity
Tasting sessions for certain product samples
Internal checks and laboratory testing of product
samples, if necessary
During
manufacture
Remote inspections of samples
Physical inspections of samples
by category managers
Testing at external laboratories after manufacture
to confirm product composition, quality and safety
Transportation
Visual inspection of goods
by agents prior to shipping
Warehousing
Inspection of goods and associated documentation
upon acceptance at distribution centres
Regular inspections for package integrity
by the quality controller
Distribution
to stores
Inspection of goods and associated documentation
upon delivery to the store
Periodic spot checks at stores by the Quality Control
Centre and laboratory testing, if necessary
Russian private labels Imported goods Branded products
Approaches to
Quality Control
How we inspect quality
at different stages of the product
life cycle, right up until sale About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
63
Private Brand Goods Produced
in Russia
We boast a wide portfolio of private-label brands and carefully
monitor their quality accordingly. We exercise a large degree
of control over each stage of product development, including
design and packaging, communication with suppliers
to adjust and enhance product properties, tasting sessions
(with our employees), laboratory tests (if necessary),
and post-manufacture verification for compliance
with negotiated specifications and regulatory requirements.
Imported Goods
Control over imported goods is especially important for us,
as it means Fix Price acts not just as a retailer, but also
as an importer, which carries a separate set of responsibilities.
When working with imported goods, we take an active
part in all stages of product development. We elaborate
specifications, perform laboratory tests to ensure quality
and obtain all necessary certifications or declarations
of conformity and verify — either remotely or in-person — that
product samples comply with the negotiated specifications
before the goods are shipped to the Company’s DCs and then
onward to stores.
Quality Control Centre
The Fix Price format and strategy envisage the Company
being a trusted source for affordable, high-quality non-food
and food products. Our specialists from the Quality Control
Centre conduct regular spot checks across all categories
of goods and work closely with private label suppliers.
They are responsible for vetting documents confirming
the supplied products meet our quality and safety standards
and comply with declared specifications. They perform
product tasting sessions and inspections to evaluate samples
from various private label producers and send these samples
for laboratory testing, if or when necessary. They also assist
with auditing private label manufacturers.
The Quality Control Centre applies a risk-based approach
to spot checks: product categories are classified in terms
of (1) the potential danger posed by a non-compliant product,
(2) the probable frequency of non-compliance with safety
rules, (3) the severity of non-compliance, and (4) the potential
number of people affected.
Number of product quality checks by type
2022
2021
2020
1,211
1,432
1,386
2,416
1,089
2,018
Laboratory testing to obtain certifications and
declarations of conformity for imported products
Number of additional tests not required by regulators
(voluntary testing) About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
64
in Russia
We boast a wide portfolio of private-label brands and carefully
monitor their quality accordingly. We exercise a large degree
of control over each stage of product development, including
design and packaging, communication with suppliers
to adjust and enhance product properties, tasting sessions
(with our employees), laboratory tests (if necessary),
and post-manufacture verification for compliance
with negotiated specifications and regulatory requirements.
Imported Goods
Control over imported goods is especially important for us,
as it means Fix Price acts not just as a retailer, but also
as an importer, which carries a separate set of responsibilities.
When working with imported goods, we take an active
part in all stages of product development. We elaborate
specifications, perform laboratory tests to ensure quality
and obtain all necessary certifications or declarations
of conformity and verify — either remotely or in-person — that
product samples comply with the negotiated specifications
before the goods are shipped to the Company’s DCs and then
onward to stores.
Quality Control Centre
The Fix Price format and strategy envisage the Company
being a trusted source for affordable, high-quality non-food
and food products. Our specialists from the Quality Control
Centre conduct regular spot checks across all categories
of goods and work closely with private label suppliers.
They are responsible for vetting documents confirming
the supplied products meet our quality and safety standards
and comply with declared specifications. They perform
product tasting sessions and inspections to evaluate samples
from various private label producers and send these samples
for laboratory testing, if or when necessary. They also assist
with auditing private label manufacturers.
The Quality Control Centre applies a risk-based approach
to spot checks: product categories are classified in terms
of (1) the potential danger posed by a non-compliant product,
(2) the probable frequency of non-compliance with safety
rules, (3) the severity of non-compliance, and (4) the potential
number of people affected.
Number of product quality checks by type
2022
2021
2020
1,211
1,432
1,386
2,416
1,089
2,018
Laboratory testing to obtain certifications and
declarations of conformity for imported products
Number of additional tests not required by regulators
(voluntary testing) About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
64
Responsible Labelling
In 2022, the Company continued to enhance its proprietary
IT solutions designed to interface with government
information systems that track the movement of products
subject to labelling from manufacturer to end customer.
This enables us to identify and prevent violations, meet
regulatory requirements, identify errors by suppliers,
and franchisees.
In 2022, we continued to boost automation of our business
processes, add more features and fine-tune our IT solutions.
We expanded the tools to manage products subject
to labelling, arranged transfer of the labelled products
to our franchisees in Russia, and scaled the system to work
in other countries of our operations.
Data Privacy
We recognise that our loyalty programme is an essential
tool to boost customer satisfaction. That is why we strive
to ensure data privacy when collecting and processing
customer information. We protect customer data
and do not use it for secondary purposes. We process
it in full compliance with the Federal Law on Personal
Data, and the Company’s internal policies on personal data
processing and protection.
Plans for 2023
In 2023, we plan to continue to meet our customers’ needs
by offering new products, while keeping prices affordable
and ensuring high quality of goods. We will maintain our
rigorous quality checks, laboratory testing and internal
verification.
Transparency and Handling
Customer Queries
We are committed to the highest levels of transparency.
Any customer may ask a store manager to provide copies
of product certificates or declarations of conformity.
All procedures for handling customer queries seek to resolve
issues promptly and eliminate the risks arising from selling
sub-par products. Customers can voice their concerns
via the feedback form on our website or by email. We carefully
investigate all customer queries and double check the quality
of a product in question. If quality issues are confirmed, we
report them to the supplier, who then takes all the necessary
measures to prevent such incidents in the future. When
necessary, we do not hesitate to withdraw non-compliant
product batches from stores. Once our checks are completed,
we inform the customer of the result and close the case.
Feedback
At Fix Price, customer feedback is one of the key drivers
of development. It helps us analyse our value proposition
and adjust our product range in line with consumer
expectations.
Our channels of direct communication with the customer
include our website, mobile app and call centre. We also collect
feedback via social media channels, where our shoppers share
their purchases and tag Fix Price in their posts.
WE ARE PROUD
TO SAY THAT
ALL OUR HARD
WORK HAS
HELPED SECURE
ZERO LEAKS
OF CUSTOMERS’
PERSONAL DATA
IN ALL THE YEARS
FIX PRICE HAS
BEEN OPERATING About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
65
In 2022, the Company continued to enhance its proprietary
IT solutions designed to interface with government
information systems that track the movement of products
subject to labelling from manufacturer to end customer.
This enables us to identify and prevent violations, meet
regulatory requirements, identify errors by suppliers,
and franchisees.
In 2022, we continued to boost automation of our business
processes, add more features and fine-tune our IT solutions.
We expanded the tools to manage products subject
to labelling, arranged transfer of the labelled products
to our franchisees in Russia, and scaled the system to work
in other countries of our operations.
Data Privacy
We recognise that our loyalty programme is an essential
tool to boost customer satisfaction. That is why we strive
to ensure data privacy when collecting and processing
customer information. We protect customer data
and do not use it for secondary purposes. We process
it in full compliance with the Federal Law on Personal
Data, and the Company’s internal policies on personal data
processing and protection.
Plans for 2023
In 2023, we plan to continue to meet our customers’ needs
by offering new products, while keeping prices affordable
and ensuring high quality of goods. We will maintain our
rigorous quality checks, laboratory testing and internal
verification.
Transparency and Handling
Customer Queries
We are committed to the highest levels of transparency.
Any customer may ask a store manager to provide copies
of product certificates or declarations of conformity.
All procedures for handling customer queries seek to resolve
issues promptly and eliminate the risks arising from selling
sub-par products. Customers can voice their concerns
via the feedback form on our website or by email. We carefully
investigate all customer queries and double check the quality
of a product in question. If quality issues are confirmed, we
report them to the supplier, who then takes all the necessary
measures to prevent such incidents in the future. When
necessary, we do not hesitate to withdraw non-compliant
product batches from stores. Once our checks are completed,
we inform the customer of the result and close the case.
Feedback
At Fix Price, customer feedback is one of the key drivers
of development. It helps us analyse our value proposition
and adjust our product range in line with consumer
expectations.
Our channels of direct communication with the customer
include our website, mobile app and call centre. We also collect
feedback via social media channels, where our shoppers share
their purchases and tag Fix Price in their posts.
WE ARE PROUD
TO SAY THAT
ALL OUR HARD
WORK HAS
HELPED SECURE
ZERO LEAKS
OF CUSTOMERS’
PERSONAL DATA
IN ALL THE YEARS
FIX PRICE HAS
BEEN OPERATING About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
65
People
Our Accomplishments in 2022
Forbes named Fix
Price one of Russia’s
Best Employers
in 2022, placing
the Company
in the silver tier
RBC ranked Fix Price
fifth in the Russian
retail segment in its
best employers
ranking
Fix Price made it
into the top five
of HeadHunter’s list
of the best employers
in the retail segment
Fix Price managed to achieve a high
level of routine process automation
in recruitment and HR record
management by successfully deploying
the new HR solutions Skillaz and HRLink
Fix Price continued honing health
and safety excellence and once
again delivered one of the best sets
of occupational health and safety results
both for regular staff and contractors
among public retail companies
In 2022, the Company maintained
its focus on employee training
and education. We launched
45 training groups in 10 various
fields for office employees, rolled
out a new condensed training
programme containing 25 short
educational videos, built a new
digital community for store
employees to share professional
experience, and improved
the process of adding our store staff
to the talent pool
Fix Price maintained its support
for young people’s sport through
the Future Champions League
charitable endowment. In 2022,
through donation boxes placed
in our stores, we raised more than
RUB 4.6 million. We also directly
contributed around RUB 40 million
to the endowment. All of these
funds went to the development
of junior football in Russia About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
66
Our Accomplishments in 2022
Forbes named Fix
Price one of Russia’s
Best Employers
in 2022, placing
the Company
in the silver tier
RBC ranked Fix Price
fifth in the Russian
retail segment in its
best employers
ranking
Fix Price made it
into the top five
of HeadHunter’s list
of the best employers
in the retail segment
Fix Price managed to achieve a high
level of routine process automation
in recruitment and HR record
management by successfully deploying
the new HR solutions Skillaz and HRLink
Fix Price continued honing health
and safety excellence and once
again delivered one of the best sets
of occupational health and safety results
both for regular staff and contractors
among public retail companies
In 2022, the Company maintained
its focus on employee training
and education. We launched
45 training groups in 10 various
fields for office employees, rolled
out a new condensed training
programme containing 25 short
educational videos, built a new
digital community for store
employees to share professional
experience, and improved
the process of adding our store staff
to the talent pool
Fix Price maintained its support
for young people’s sport through
the Future Champions League
charitable endowment. In 2022,
through donation boxes placed
in our stores, we raised more than
RUB 4.6 million. We also directly
contributed around RUB 40 million
to the endowment. All of these
funds went to the development
of junior football in Russia About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
66
Our Approach
to HR Management
The Nomination and Remuneration Committee reviews
HR issues on behalf of the Board of Directors. The HR Director
leads the HR Department. Our Personnel Policy encompasses
the key aspects of employment at the Company.
It was developed in full compliance with international
and Russian legislation and stakeholders’ expectations.
We believe that every employee matters. Therefore, we
strive to provide a comfortable work environment, offer a fair
compensation and motivation system and focus on helping
our people to grow in their professional and personal lives.
Fix Price recognises the responsibility it has to conduct
business in a manner that is consistent with its corporate
values of respect for human rights and zero tolerance
to modern slavery, including forced labour and human
trafficking. The Company formalised its approach towards this
issue in its Modern Anti-Slavery and Human Trafficking Policy.
The principles of equal opportunities and ethical treatment
of personnel are reflected in our Business Ethics Policy (Code
of Conduct). Should our staff experience discrimination
or a violation of our ethical principles, they can contact
the Ethics Committee or raise their concern on a dedicated
webpage . The Ethics Committee reviews all the complaints
received and takes disciplinary measures when necessary.
In 2022, the number of reports to the Ethics Committee
increased about 9 times vs 2021 as a result of the Company’s
comprehensive effort to raise awareness among stakeholders
and improve the availability of the anti-corruption hotline,
as well as the mandatory anti-corruption and business ethics
training modules launched in 2022.
Core Pillars of HR at Fix Price:
Creating a comfortable work environment
in line with occupational safety standards
Developing fair compensation and motivation
system
Building an effective employee training
and development system to support further
professional and personal growth
Building open and streamlined team
communications to avoid unnecessary
bureaucracy
Welcoming employee feedback at all levels
of the corporate structure
Constant monitoring and assessment
of employee satisfaction at all units
of the Company
Supporting diversity and inclusion About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
67
to HR Management
The Nomination and Remuneration Committee reviews
HR issues on behalf of the Board of Directors. The HR Director
leads the HR Department. Our Personnel Policy encompasses
the key aspects of employment at the Company.
It was developed in full compliance with international
and Russian legislation and stakeholders’ expectations.
We believe that every employee matters. Therefore, we
strive to provide a comfortable work environment, offer a fair
compensation and motivation system and focus on helping
our people to grow in their professional and personal lives.
Fix Price recognises the responsibility it has to conduct
business in a manner that is consistent with its corporate
values of respect for human rights and zero tolerance
to modern slavery, including forced labour and human
trafficking. The Company formalised its approach towards this
issue in its Modern Anti-Slavery and Human Trafficking Policy.
The principles of equal opportunities and ethical treatment
of personnel are reflected in our Business Ethics Policy (Code
of Conduct). Should our staff experience discrimination
or a violation of our ethical principles, they can contact
the Ethics Committee or raise their concern on a dedicated
webpage . The Ethics Committee reviews all the complaints
received and takes disciplinary measures when necessary.
In 2022, the number of reports to the Ethics Committee
increased about 9 times vs 2021 as a result of the Company’s
comprehensive effort to raise awareness among stakeholders
and improve the availability of the anti-corruption hotline,
as well as the mandatory anti-corruption and business ethics
training modules launched in 2022.
Core Pillars of HR at Fix Price:
Creating a comfortable work environment
in line with occupational safety standards
Developing fair compensation and motivation
system
Building an effective employee training
and development system to support further
professional and personal growth
Building open and streamlined team
communications to avoid unnecessary
bureaucracy
Welcoming employee feedback at all levels
of the corporate structure
Constant monitoring and assessment
of employee satisfaction at all units
of the Company
Supporting diversity and inclusion About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
67
1
The personnel of Fix Price Group PLC in all countries where it operates, including contractors
2 Total may not equal the sum of the components due to rounding
3 The scope of disclosure in this section of the Annual Report unless stated otherwise: employees of Best Price LLC, the Group’s core
operating company in the Russian Federation (excluding contractors and the Company’s personnel in other geographies)
4 Due to rounding, the sum of components in 2021 exceeds 100%
5 Unless stated otherwise, the Company’s management comprises top, middle and junior managers
Headcount and Workforce Profile
Workforce headcount in 2020–2022, 1, 2
number of employees
Workforce gender profile in 2020–2022, % Management gender profile in 2020–2022, 5 %
Workforce age profile in 2020–2022, 3 % The Group’s total average headcount increased by 18%
in 2022 due to Fix Price’s network expansion.
Fix Price understands that a combination of various personal
experiences helps to unleash the team’s full potential
at the workplace. We believe that diversity and inclusion
are important drivers behind a successful team. Fix Price
strives to ensure a diverse workforce, including in terms
of age and gender.
In 2022, the proportion of women in total workforce
and in management increased to 86% and 48%, respectively.
The Company employs specialists of various ages, which
contributes to the team’s diversity and inclusion. Employees
aged 30–50 comprise a majority of staff: 63% of our
total headcount in 2022. Around one-third of employees
(30% in 2022) are under 30.
2022
2021
2020
14 86
17 83
18 82
Men Women
2022
2021
2020
Office staff Store staff DC staff
1,507 28,937 2,599
1,739 34,445 2,830
1,356 28,105 2,508
39,013
33,044
31,970
Men Women
2022
2021
2020
52 48
56 44
63 37
2022
2021 4
2020
30 63
<30 years 30–50 years >50 years
7
31 64 6
29 65 6 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
68
2 Total may not equal the sum of the components due to rounding
3 The scope of disclosure in this section of the Annual Report unless stated otherwise: employees of Best Price LLC, the Group’s core
operating company in the Russian Federation (excluding contractors and the Company’s personnel in other geographies)
4 Due to rounding, the sum of components in 2021 exceeds 100%
5 Unless stated otherwise, the Company’s management comprises top, middle and junior managers
Headcount and Workforce Profile
Workforce headcount in 2020–2022, 1, 2
number of employees
Workforce gender profile in 2020–2022, % Management gender profile in 2020–2022, 5 %
Workforce age profile in 2020–2022, 3 % The Group’s total average headcount increased by 18%
in 2022 due to Fix Price’s network expansion.
Fix Price understands that a combination of various personal
experiences helps to unleash the team’s full potential
at the workplace. We believe that diversity and inclusion
are important drivers behind a successful team. Fix Price
strives to ensure a diverse workforce, including in terms
of age and gender.
In 2022, the proportion of women in total workforce
and in management increased to 86% and 48%, respectively.
The Company employs specialists of various ages, which
contributes to the team’s diversity and inclusion. Employees
aged 30–50 comprise a majority of staff: 63% of our
total headcount in 2022. Around one-third of employees
(30% in 2022) are under 30.
2022
2021
2020
14 86
17 83
18 82
Men Women
2022
2021
2020
Office staff Store staff DC staff
1,507 28,937 2,599
1,739 34,445 2,830
1,356 28,105 2,508
39,013
33,044
31,970
Men Women
2022
2021
2020
52 48
56 44
63 37
2022
2021 4
2020
30 63
<30 years 30–50 years >50 years
7
31 64 6
29 65 6 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
68
1
Temporary disability includes the parental leave and the sick leave
Remuneration and Motivation
To promote the well-being of our staff and increase employee
loyalty, we are constantly looking for ways to improve their
quality of life. We implemented a social support system
consisting of the following components:
• financial support for childbirth, disease, bereavement,
disability, or other cases when an employee may need it;
• supplemental payments: full salary compensation
in the event of temporary disability 1 or regular leave;
• voluntary medical insurance: the list of available medical
facilities increases relative to the employee’s tenure;
• interest-free loans: provided to key employees
for significant purposes such as education, buying a home
or medical treatment;
• bonus payments to employees: payment of bonuses
to employees working for the Company for 10 years,
as well as to the best employee in each department
on an annual basis;
• flexible or remote work schedule in case of illness,
parental leave or agreement with management
if such a schedule is applicable;
• since February 2022, the Company has offered discounts
for all employees through partner agreements for goods
and services, including language learning, educational
courses, books, sports, travel, and insurance;
• bonuses for mentoring new employees: bonuses
are offered to store managers responsible for training
and teaching new workers at the stores.
We provide social support to all employees, including those
working part-time. The only eligibility criterion is the minimal
length of service set for employees in the policy regulating
the benefit.
Fix Price believes that a highly qualified and motivated team
is a major pillar of business success and forms an important
part of the Company’s sustainable growth. We use
an attractive remuneration system that brings in the best
talents to all areas of our business. We foster a supporting
and friendly environment that promotes professional
and personal success for all our people. We monitor
the labour market and offer competitive salaries, regardless
of gender, age, race, ethnicity, religious affiliation, or sexual
orientation.
Employee remuneration is based on a reasonable
and justified ratio of fixed and variable parts. We have
established separate remuneration and benefit systems
for each category of hire based on their experience, position
and individual contribution.
In 2022, we implemented a long-term incentive
programme (LTIP) for our key personnel. The LTIP’s main
objectives are to retain the best talent for leadership
positions and to ensure that management initiatives
are aligned with shareholders’ interests in order to support
the Company’s long-term value creation. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
69
Remuneration and Motivation
To promote the well-being of our staff and increase employee
loyalty, we are constantly looking for ways to improve their
quality of life. We implemented a social support system
consisting of the following components:
• financial support for childbirth, disease, bereavement,
disability, or other cases when an employee may need it;
• supplemental payments: full salary compensation
in the event of temporary disability 1 or regular leave;
• voluntary medical insurance: the list of available medical
facilities increases relative to the employee’s tenure;
• interest-free loans: provided to key employees
for significant purposes such as education, buying a home
or medical treatment;
• bonus payments to employees: payment of bonuses
to employees working for the Company for 10 years,
as well as to the best employee in each department
on an annual basis;
• flexible or remote work schedule in case of illness,
parental leave or agreement with management
if such a schedule is applicable;
• since February 2022, the Company has offered discounts
for all employees through partner agreements for goods
and services, including language learning, educational
courses, books, sports, travel, and insurance;
• bonuses for mentoring new employees: bonuses
are offered to store managers responsible for training
and teaching new workers at the stores.
We provide social support to all employees, including those
working part-time. The only eligibility criterion is the minimal
length of service set for employees in the policy regulating
the benefit.
Fix Price believes that a highly qualified and motivated team
is a major pillar of business success and forms an important
part of the Company’s sustainable growth. We use
an attractive remuneration system that brings in the best
talents to all areas of our business. We foster a supporting
and friendly environment that promotes professional
and personal success for all our people. We monitor
the labour market and offer competitive salaries, regardless
of gender, age, race, ethnicity, religious affiliation, or sexual
orientation.
Employee remuneration is based on a reasonable
and justified ratio of fixed and variable parts. We have
established separate remuneration and benefit systems
for each category of hire based on their experience, position
and individual contribution.
In 2022, we implemented a long-term incentive
programme (LTIP) for our key personnel. The LTIP’s main
objectives are to retain the best talent for leadership
positions and to ensure that management initiatives
are aligned with shareholders’ interests in order to support
the Company’s long-term value creation. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
69
1
Full-time equivalent
2 Fix Price School
Training and Development
We provide training and other tools to prepare our employees
to perform a wide range of tasks, ensuring operations run
at a high degree of efficiency. We have launched a variety
of training programmes tailored to each type of business
facility. The Training and Development Department
aims to provide extensive opportunities for professional
development to each employee of the Company.
Average annual training hours
per FTE, 1 2020–2022
In 2022, average training hours per FTE grew by 16%
on 2021 thanks to improvements in our training programme,
which boosted attendance and engagement.
Training Programmes for Store
Personnel
We strive towards impeccable service in our stores
and consequently are focused on providing impactful training
programmes for our store personnel.
Upon hiring, new store employees are granted access
to the FP School, 2 our distance learning platform. We
constantly update and improve our courses to promote
the professional, interpersonal and managerial skills that
are particularly important for store employees.
To make the training process more accessible and dynamic,
we have made the FP School available from any device. We
have developed a mobile app and have gamified the process,
adding elements such as badges and avatars, a ranking
system and interactive video courses. In addition to standard
training methods, we publish educational articles, surveys
and videos for store personnel on the Training Department’s
social media accounts. This format allows personnel to train
at any time that suits them.
In 2022, we created a digital community so that store
personnel from all over the country can share their experience
and discuss any tricky situations they may find themselves
in at the workplace. All discussions in our digital community
are monitored by a moderator from the training centre, who
guides the dialogue to make it more productive and impactful.
Training and certification of our store staff is carried out
every six months. Upon completing their training, employees
receive certificates. The results shown on these certificates
start to populate a competency matrix for each employee.
These highlight each employee’s knowledge in various
areas and serve to identify topics for further training. After
successfully completing their training, employees can apply
to be included into the talent pool. Training centre officers
run a 360 degree assessment process, gather key KPIs
for the employee and report the results to senior management.
The Company also runs a mentoring programme for store
managers. In 2022, all newly hired store managers
participated in the mentoring programme. Mentors of new
store managers receive a bonus for successful mentorship
after the store manager completes the programme.
Training Programmes for DC Personnel
The Company holds a mandatory induction and safety
training for DC personnel that is tailored to their role.
Training Programmes for Office
Employees
The Company runs both offline and online training
programmes for office employees, with the latter prevailing
after the pandemic. The trainings are arranged depending
on the Company’s operational needs and employee
expectations.
At the beginning of the reporting year, we launched a new
training course on change management, which
was particularly valuable at the time given the geopolitical
situation and related uncertainty. Our employees were trained
to identify the source of psychological challenges associated
with change and were introduced to methods of alleviating
them.
In February 2022, we also successfully rolled out a five-
course programme dedicated to information safety, business
behaviour, our anti-corruption policy, and risk management.
In March 2022, we ran 45 training groups on various topics,
from the basics of the standard software to the advanced
level of sales analytics and forecasting.
In the reporting year, the Company also launched a new
condensed training programme, which encompasses
brief educational videos and enables employees to get
the maximum level of information within a short period
of time. In 2022, we managed to release over 25 such videos.
Fix Price successfully continues to implement the Expert
in the Field programme, which was launched in 2021.
The programme empowers Company employees to share
their expertise, thereby enhancing their own competencies
and those of their colleagues.
59.72
24.51
2022
51.49 2021
2020 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
70
2 Fix Price School
Training and Development
We provide training and other tools to prepare our employees
to perform a wide range of tasks, ensuring operations run
at a high degree of efficiency. We have launched a variety
of training programmes tailored to each type of business
facility. The Training and Development Department
aims to provide extensive opportunities for professional
development to each employee of the Company.
Average annual training hours
per FTE, 1 2020–2022
In 2022, average training hours per FTE grew by 16%
on 2021 thanks to improvements in our training programme,
which boosted attendance and engagement.
Training Programmes for Store
Personnel
We strive towards impeccable service in our stores
and consequently are focused on providing impactful training
programmes for our store personnel.
Upon hiring, new store employees are granted access
to the FP School, 2 our distance learning platform. We
constantly update and improve our courses to promote
the professional, interpersonal and managerial skills that
are particularly important for store employees.
To make the training process more accessible and dynamic,
we have made the FP School available from any device. We
have developed a mobile app and have gamified the process,
adding elements such as badges and avatars, a ranking
system and interactive video courses. In addition to standard
training methods, we publish educational articles, surveys
and videos for store personnel on the Training Department’s
social media accounts. This format allows personnel to train
at any time that suits them.
In 2022, we created a digital community so that store
personnel from all over the country can share their experience
and discuss any tricky situations they may find themselves
in at the workplace. All discussions in our digital community
are monitored by a moderator from the training centre, who
guides the dialogue to make it more productive and impactful.
Training and certification of our store staff is carried out
every six months. Upon completing their training, employees
receive certificates. The results shown on these certificates
start to populate a competency matrix for each employee.
These highlight each employee’s knowledge in various
areas and serve to identify topics for further training. After
successfully completing their training, employees can apply
to be included into the talent pool. Training centre officers
run a 360 degree assessment process, gather key KPIs
for the employee and report the results to senior management.
The Company also runs a mentoring programme for store
managers. In 2022, all newly hired store managers
participated in the mentoring programme. Mentors of new
store managers receive a bonus for successful mentorship
after the store manager completes the programme.
Training Programmes for DC Personnel
The Company holds a mandatory induction and safety
training for DC personnel that is tailored to their role.
Training Programmes for Office
Employees
The Company runs both offline and online training
programmes for office employees, with the latter prevailing
after the pandemic. The trainings are arranged depending
on the Company’s operational needs and employee
expectations.
At the beginning of the reporting year, we launched a new
training course on change management, which
was particularly valuable at the time given the geopolitical
situation and related uncertainty. Our employees were trained
to identify the source of psychological challenges associated
with change and were introduced to methods of alleviating
them.
In February 2022, we also successfully rolled out a five-
course programme dedicated to information safety, business
behaviour, our anti-corruption policy, and risk management.
In March 2022, we ran 45 training groups on various topics,
from the basics of the standard software to the advanced
level of sales analytics and forecasting.
In the reporting year, the Company also launched a new
condensed training programme, which encompasses
brief educational videos and enables employees to get
the maximum level of information within a short period
of time. In 2022, we managed to release over 25 such videos.
Fix Price successfully continues to implement the Expert
in the Field programme, which was launched in 2021.
The programme empowers Company employees to share
their expertise, thereby enhancing their own competencies
and those of their colleagues.
59.72
24.51
2022
51.49 2021
2020 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
70
Occupational Health and Safety (OHS)
and Employee Well-Being
At Fix Price, our core values include safeguarding our
people’s lives and health, as well as these of contractors,
and prioritising safety throughout all business processes.
We care about the well-being of all individuals working
at our facilities, including contractors and suppliers, who
are also required to adhere to the Company’s policies
and standards. Moreover, our agreements with contractors
and suppliers include the main technical guidelines
for safely using equipment, as well as incident response
procedures.
All workplaces undergo a special assessment of working
conditions. According to the corporate guidelines,
any incident relating to occupational health and safety must
be reported to the OHS Department and the employee’s
direct supervisor immediately. An investigation commission
is stood up in order to carefully analyse the accident’s causes
and prevent re-occurrence. In the event of severe accidents,
respective government bodies take part in the investigation.
In 2022, the total number of lost time injuries slightly
increased due to the growth in store personnel number
on the back of network expansion; however, there were no
severe injuries or fatalities across the chain. In the reporting
year, we saw growth in the registered number of near-miss
incidents as the Company improved monitoring and
recording of such incidents.
1 According to GRI 403–10, all accidents except near-miss incidents are included in the total number of accidents
2 Lost time injury
To minimise future risks, we reviewed all business processes
related to these incidents, provided recommendations
on how to improve them and added information about these
risks to the training courses for our personnel.
We also strive to prevent accidents by monitoring
and analysing the circumstances and aggravating factors
behind minor injuries. As part of these efforts, all cases
of minor injuries must also be reported by our personnel
to their direct supervisors, so that they can be registered
and analysed by the OHS Department.
The health of our people is always top of mind for Fix
Price. We strive to create a comfortable and healthy
work environment for all our employees. Personnel who
operate complex or hazardous equipment take trainings
and pass a qualifying examination before they can start
working.
All our employees undergo regular medical check-ups.
Our DC staff must also have a thorough remote medical
examination before shifts, which helps us reduce the risk that
sophisticated material-handling equipment is operated by
someone unfit for work.
OHS indicators for regular staff
and contractors, 2020–2022
2020 2021 2022
Total number of accidents, 1
including:
19 31 33
• regular employees 11 10 14
• contractors 8 21 19
Total number of fatalities,
including:
0 0 0
• regular employees 0 0 0
• contractors 0 0 0
Total number of severe injuries
(no fatalities), including:
0 3 0
• regular employees 0 3 0
• contractors 0 0 0
Work-related injuries that
resulted in a temporary disability
(LTI), 2 including:
19 28 33
• regular employees 11 10 14
• contractors 8 18 19
Near-miss incidents, including: 2 19 32
• regular employees 0 3 12
• contractors 2 16 20
Lost-time injury frequency rate
(per million hours worked) (LTIFR):
• regular employees 0.07 0.05 0.06
• contractors 0.07 0.14 0.14 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
71
and Employee Well-Being
At Fix Price, our core values include safeguarding our
people’s lives and health, as well as these of contractors,
and prioritising safety throughout all business processes.
We care about the well-being of all individuals working
at our facilities, including contractors and suppliers, who
are also required to adhere to the Company’s policies
and standards. Moreover, our agreements with contractors
and suppliers include the main technical guidelines
for safely using equipment, as well as incident response
procedures.
All workplaces undergo a special assessment of working
conditions. According to the corporate guidelines,
any incident relating to occupational health and safety must
be reported to the OHS Department and the employee’s
direct supervisor immediately. An investigation commission
is stood up in order to carefully analyse the accident’s causes
and prevent re-occurrence. In the event of severe accidents,
respective government bodies take part in the investigation.
In 2022, the total number of lost time injuries slightly
increased due to the growth in store personnel number
on the back of network expansion; however, there were no
severe injuries or fatalities across the chain. In the reporting
year, we saw growth in the registered number of near-miss
incidents as the Company improved monitoring and
recording of such incidents.
1 According to GRI 403–10, all accidents except near-miss incidents are included in the total number of accidents
2 Lost time injury
To minimise future risks, we reviewed all business processes
related to these incidents, provided recommendations
on how to improve them and added information about these
risks to the training courses for our personnel.
We also strive to prevent accidents by monitoring
and analysing the circumstances and aggravating factors
behind minor injuries. As part of these efforts, all cases
of minor injuries must also be reported by our personnel
to their direct supervisors, so that they can be registered
and analysed by the OHS Department.
The health of our people is always top of mind for Fix
Price. We strive to create a comfortable and healthy
work environment for all our employees. Personnel who
operate complex or hazardous equipment take trainings
and pass a qualifying examination before they can start
working.
All our employees undergo regular medical check-ups.
Our DC staff must also have a thorough remote medical
examination before shifts, which helps us reduce the risk that
sophisticated material-handling equipment is operated by
someone unfit for work.
OHS indicators for regular staff
and contractors, 2020–2022
2020 2021 2022
Total number of accidents, 1
including:
19 31 33
• regular employees 11 10 14
• contractors 8 21 19
Total number of fatalities,
including:
0 0 0
• regular employees 0 0 0
• contractors 0 0 0
Total number of severe injuries
(no fatalities), including:
0 3 0
• regular employees 0 3 0
• contractors 0 0 0
Work-related injuries that
resulted in a temporary disability
(LTI), 2 including:
19 28 33
• regular employees 11 10 14
• contractors 8 18 19
Near-miss incidents, including: 2 19 32
• regular employees 0 3 12
• contractors 2 16 20
Lost-time injury frequency rate
(per million hours worked) (LTIFR):
• regular employees 0.07 0.05 0.06
• contractors 0.07 0.14 0.14 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
71
1
With the exception of the remote regions (e.g. Russia’s Far East, etc.),
and other countries where the assortment and/or prices may vary
Social Projects
We are committed to supporting our local communities
and customers across our footprint. By providing access
to affordable and quality products, we make a positive impact
and add value to our shoppers’ everyday lives.
The Company operated a mature network comprising
5,663 stores as of 31 December 2022. We are focused
on offering goods at highly competitive prices everywhere
we operate. Our recognisable store exterior and uniform
equipment, product range and pricing ensure equal
customer experience in all Russian cities. 1 The broad product
range meets the needs of customers with various demands
and budgets.
We understand the importance of sport in daily life.
Children are our future, so we help bring sports to all
children and young people. We see sports as a catalyst that
complements children’s ability to focus and to learn about
teamwork, all while contributing to mental and physical well-
being.
Fix Price promotes sport for young people by financing
the Future Champions League charitable endowment.
The Future Champions League strives to make football
popular by awarding scholarships to young football players;
financing education, transport costs and recreational
sports; and sponsoring specialist non-profits. In 2022, we
contributed around RUB 40 million to the league. We also
placed customer donation boxes in over 2,000 stores, raising
RUB 4.6 million for the endowment. These donations went
towards helping over 200 children and teenagers make their
dreams come true. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
72
and other countries where the assortment and/or prices may vary
Social Projects
We are committed to supporting our local communities
and customers across our footprint. By providing access
to affordable and quality products, we make a positive impact
and add value to our shoppers’ everyday lives.
The Company operated a mature network comprising
5,663 stores as of 31 December 2022. We are focused
on offering goods at highly competitive prices everywhere
we operate. Our recognisable store exterior and uniform
equipment, product range and pricing ensure equal
customer experience in all Russian cities. 1 The broad product
range meets the needs of customers with various demands
and budgets.
We understand the importance of sport in daily life.
Children are our future, so we help bring sports to all
children and young people. We see sports as a catalyst that
complements children’s ability to focus and to learn about
teamwork, all while contributing to mental and physical well-
being.
Fix Price promotes sport for young people by financing
the Future Champions League charitable endowment.
The Future Champions League strives to make football
popular by awarding scholarships to young football players;
financing education, transport costs and recreational
sports; and sponsoring specialist non-profits. In 2022, we
contributed around RUB 40 million to the league. We also
placed customer donation boxes in over 2,000 stores, raising
RUB 4.6 million for the endowment. These donations went
towards helping over 200 children and teenagers make their
dreams come true. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
72
Partners
Our Accomplishments in 2022
We are committed to ensuring
that our partners comply
with the Company’s policies,
including:
the C ode of Conduct
the Modern Anti-Slavery and Human
Trafficking Policy
the Anti-Bribery and Corruption Policy
the Environmental, Health and Safety
Policy
the Guidelines for Ensuring Quality in All
Product Categories
Our Approach to Partnerships
All our operations are founded on business integrity
and fairness and fully comply with current legislation. These
principles also serve as the key pillars of our relationships
with partners, which include suppliers, contractors, franchisees,
and logistics, online delivery and other service providers.
Cooperation with suppliers serves as the foundation of our
partnerships, as supply chain excellence is a core pillar of our
business model. Through 16 years of operation, Fix Price
has built up a solid knowledge of the specifics and trends
of the Russian VVR market and has captured significant
synergies with partners by building strong relationships
with them. We value our partnerships and seek cooperation
that benefits both Fix Price and our suppliers in all our
communities.
We look for opportunities to engage with most suppliers
directly, cutting out intermediaries, as it helps us streamline
costs and respond promptly to any issues that may arise.
Despite all the challenges of 2022, we championed our
partner-focused approach and did our best to support our
suppliers, e.g. through flexible and favourable terms if needed,
helping them to navigate through market volatility.
We expect our suppliers to share our values: integrity
and ethical business practices; long-term, mutually beneficial
relationships with all stakeholders; respect for human
rights; and a zero-tolerance approach to any form of slavery,
human trafficking, corruption, and bribery. We ask all our
partners to sign an anti-corruption agreement, which sets out
the principles of zero tolerance to corruption and prohibits all
counterparties from requesting, providing or receiving cash,
perks, benefits, or gifts to/from any employee of the Company
or another partner.
509
suppliers
0
major breaches
identified
in private label
supplier audits
77 %
share of local
suppliers
in procurement
In 2022, the Fix Price
franchising project
won a Best for
Russia — Regional
Development award
Amid the final easing
of COVID-response
measures, we
managed to double
the number of private
label supplier audits About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
73
Our Accomplishments in 2022
We are committed to ensuring
that our partners comply
with the Company’s policies,
including:
the C ode of Conduct
the Modern Anti-Slavery and Human
Trafficking Policy
the Anti-Bribery and Corruption Policy
the Environmental, Health and Safety
Policy
the Guidelines for Ensuring Quality in All
Product Categories
Our Approach to Partnerships
All our operations are founded on business integrity
and fairness and fully comply with current legislation. These
principles also serve as the key pillars of our relationships
with partners, which include suppliers, contractors, franchisees,
and logistics, online delivery and other service providers.
Cooperation with suppliers serves as the foundation of our
partnerships, as supply chain excellence is a core pillar of our
business model. Through 16 years of operation, Fix Price
has built up a solid knowledge of the specifics and trends
of the Russian VVR market and has captured significant
synergies with partners by building strong relationships
with them. We value our partnerships and seek cooperation
that benefits both Fix Price and our suppliers in all our
communities.
We look for opportunities to engage with most suppliers
directly, cutting out intermediaries, as it helps us streamline
costs and respond promptly to any issues that may arise.
Despite all the challenges of 2022, we championed our
partner-focused approach and did our best to support our
suppliers, e.g. through flexible and favourable terms if needed,
helping them to navigate through market volatility.
We expect our suppliers to share our values: integrity
and ethical business practices; long-term, mutually beneficial
relationships with all stakeholders; respect for human
rights; and a zero-tolerance approach to any form of slavery,
human trafficking, corruption, and bribery. We ask all our
partners to sign an anti-corruption agreement, which sets out
the principles of zero tolerance to corruption and prohibits all
counterparties from requesting, providing or receiving cash,
perks, benefits, or gifts to/from any employee of the Company
or another partner.
509
suppliers
0
major breaches
identified
in private label
supplier audits
77 %
share of local
suppliers
in procurement
In 2022, the Fix Price
franchising project
won a Best for
Russia — Regional
Development award
Amid the final easing
of COVID-response
measures, we
managed to double
the number of private
label supplier audits About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
73
Fix Price cares about all its partners and seeks to help them
achieve their own goals across many areas. The training
system used to educate the Company’s full-time employees
is also available to contractor personnel engaged in store
operations. We cooperate with our partners on occupational
health and safety: agreements with contractors
working at our facilities include key technical guidelines
and procedures for handling accidents. We run trainings,
deliver health and safety inductions for partners working
at Fix Price facilities and educate our logistics contractors
on safe driving practices on a seasonal basis.
We strive to make shopping at Fix Price available to as many
people as possible, including those who prefer doing it online.
The customer may choose whatever they like on our website
or in our mobile app. What is more, they can use a self pick-up
at the nearest store or our partners’ last mile delivery services.
We aim at building sound long-term relationships with
other service providers, which, after completing our tender
procedures, become a part of our team and system that
underpin Fix Price’s business success.
Fix Price rapidly expands its footprint, even in remote
regions of Russia. In these areas, this process takes place via,
for example, franchise stores, which boosts brand recognition
and allows the Company to contribute to the development
of the regions where it operates. In 2022, the professional
community recognised our efforts by awarding our Fix
Price franchising project with a Best for Russia — Regional
Development award.
Prior to choosing a counterparty, we conduct due diligence
with a reliability scoring tool. This system analyses data
from more than 30 official sources (the Federal Tax Service,
the Arbitration Case Database, the Register of Insolvencies,
etc.) and rates counterparties on a 100-point scale.
We also request that all suppliers fill out a self-assessment
form that seeks to verify the following:
• voluntary employment;
• no discrimination in employment;
• no use of child labour;
• freedom of association and the right to collective
bargaining;
• payment of a living wage;
• no excessive working hours;
• a legally binding employment relationship;
• compliance assurance (confirmation they have read
and understood the Company’s policies and comply
with local legislation).
Our key focus is ensuring transparency in our relationships
with all counterparties. Therefore, our suppliers are aware
of the specifics of the Company’s pricing policy and our
approach to procurement.
When engaging with suppliers we strive to use only
the most efficient communication channels. We have
launched a website for tender procedures and order
placement, meaning all our requirements for suppliers
and sample contracts are publicly available. Moreover,
Fix Price participates in various exhibitions and forums where
we can source new ideas for expanding our product mix,
meet our suppliers and find new partners.
Supplier Audits
Our priority is to verify that production conditions reliably
hit our high standards and prevent non-compliance
with the quality and safety requirements. We conduct audits
of production facilities operated by private label suppliers
and foreign producers.
Russian Supplier Audits
Audits of local private label producers are conducted
according to the Company’s Regulations for Ensuring
the Quality of Private Brand Goods. Fix Price’s quality control
experts are authorised to perform audits prior to or after
a supply contract is executed. We typically audit suppliers
once every two years. However, audits may be conducted
more frequently, including when a new production facility
is brought online, if we receive negative customer feedback
or if issues were raised in the previous audit.
Audit checklists reflect the product category (Food, Drogerie, 1
and Non-food), with each of them containing over 85 questions
across more than 10 sections. The questionnaires cover diverse
areas, including quality management and product safety
(whether a quality management system, a tracking system
and HACCP 2 for food products are in place), production
facilities and conditions, product transportation, HR
management, and environmental matters, such as whether
a facility pollutes the local environment and how mature
and well-implemented waste management practices are,
for example waste disposal in labelled, closed containers, etc.
1 Household chemicals, cosmetics and hygiene products
2 Hazard Analysis and Critical Control Points, or HACCP, is a management system in which food safety is managed by identifying, analysing and controlling hazards affecting the safety of food products. When implementing food
production processes involving compliance with safety requirements, a producer must develop, implement and maintain HACCP-based procedures About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
74
achieve their own goals across many areas. The training
system used to educate the Company’s full-time employees
is also available to contractor personnel engaged in store
operations. We cooperate with our partners on occupational
health and safety: agreements with contractors
working at our facilities include key technical guidelines
and procedures for handling accidents. We run trainings,
deliver health and safety inductions for partners working
at Fix Price facilities and educate our logistics contractors
on safe driving practices on a seasonal basis.
We strive to make shopping at Fix Price available to as many
people as possible, including those who prefer doing it online.
The customer may choose whatever they like on our website
or in our mobile app. What is more, they can use a self pick-up
at the nearest store or our partners’ last mile delivery services.
We aim at building sound long-term relationships with
other service providers, which, after completing our tender
procedures, become a part of our team and system that
underpin Fix Price’s business success.
Fix Price rapidly expands its footprint, even in remote
regions of Russia. In these areas, this process takes place via,
for example, franchise stores, which boosts brand recognition
and allows the Company to contribute to the development
of the regions where it operates. In 2022, the professional
community recognised our efforts by awarding our Fix
Price franchising project with a Best for Russia — Regional
Development award.
Prior to choosing a counterparty, we conduct due diligence
with a reliability scoring tool. This system analyses data
from more than 30 official sources (the Federal Tax Service,
the Arbitration Case Database, the Register of Insolvencies,
etc.) and rates counterparties on a 100-point scale.
We also request that all suppliers fill out a self-assessment
form that seeks to verify the following:
• voluntary employment;
• no discrimination in employment;
• no use of child labour;
• freedom of association and the right to collective
bargaining;
• payment of a living wage;
• no excessive working hours;
• a legally binding employment relationship;
• compliance assurance (confirmation they have read
and understood the Company’s policies and comply
with local legislation).
Our key focus is ensuring transparency in our relationships
with all counterparties. Therefore, our suppliers are aware
of the specifics of the Company’s pricing policy and our
approach to procurement.
When engaging with suppliers we strive to use only
the most efficient communication channels. We have
launched a website for tender procedures and order
placement, meaning all our requirements for suppliers
and sample contracts are publicly available. Moreover,
Fix Price participates in various exhibitions and forums where
we can source new ideas for expanding our product mix,
meet our suppliers and find new partners.
Supplier Audits
Our priority is to verify that production conditions reliably
hit our high standards and prevent non-compliance
with the quality and safety requirements. We conduct audits
of production facilities operated by private label suppliers
and foreign producers.
Russian Supplier Audits
Audits of local private label producers are conducted
according to the Company’s Regulations for Ensuring
the Quality of Private Brand Goods. Fix Price’s quality control
experts are authorised to perform audits prior to or after
a supply contract is executed. We typically audit suppliers
once every two years. However, audits may be conducted
more frequently, including when a new production facility
is brought online, if we receive negative customer feedback
or if issues were raised in the previous audit.
Audit checklists reflect the product category (Food, Drogerie, 1
and Non-food), with each of them containing over 85 questions
across more than 10 sections. The questionnaires cover diverse
areas, including quality management and product safety
(whether a quality management system, a tracking system
and HACCP 2 for food products are in place), production
facilities and conditions, product transportation, HR
management, and environmental matters, such as whether
a facility pollutes the local environment and how mature
and well-implemented waste management practices are,
for example waste disposal in labelled, closed containers, etc.
1 Household chemicals, cosmetics and hygiene products
2 Hazard Analysis and Critical Control Points, or HACCP, is a management system in which food safety is managed by identifying, analysing and controlling hazards affecting the safety of food products. When implementing food
production processes involving compliance with safety requirements, a producer must develop, implement and maintain HACCP-based procedures About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
74
Number of audited suppliers
1
2022
2021
2020
10
1
5
1
3
1
Number of supplier audits
Number of audits of new suppliers
Foreign Supplier Audits
When working with foreign suppliers, Fix Price engages local
agents. They build strong relationships with new and existing
producers, while searching for goods and new production
facilities, collaborating with current manufacturers,
supervising merchandise production and quality,
and checking the accompanying documentation.
The agents are also responsible for arranging audits
of producers of imported goods, which are carried out
by specialist organisations and laboratories accredited in their
respective country. The reports they prepare following these
inspections contain data on the suppliers, their quality
and process management, certification, product streams,
etc. The audit results are used to assess each of these aspects
and make decisions regarding further cooperation.
A supplier passes the audit if its production facility
receives at least a 90% score. Should they fail to pass, we
create a roadmap of activities with the supplier to deliver
the required changes.
In 2022, we managed to double the number of audits thanks
to the final easing of COVID restrictions which hampered
audits in previous years.
1 The data relate to Russian private label suppliers
We are focused on growing fair and honest
partnerships and building a responsible
supply chain. We intend to expand
collaboration with new and existing partners,
boost the quality and frequency of supplier
audits and continue to deploy sustainability
practices across the entire supply chain About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
75
2022
2021
2020
10
1
5
1
3
1
Number of supplier audits
Number of audits of new suppliers
Foreign Supplier Audits
When working with foreign suppliers, Fix Price engages local
agents. They build strong relationships with new and existing
producers, while searching for goods and new production
facilities, collaborating with current manufacturers,
supervising merchandise production and quality,
and checking the accompanying documentation.
The agents are also responsible for arranging audits
of producers of imported goods, which are carried out
by specialist organisations and laboratories accredited in their
respective country. The reports they prepare following these
inspections contain data on the suppliers, their quality
and process management, certification, product streams,
etc. The audit results are used to assess each of these aspects
and make decisions regarding further cooperation.
A supplier passes the audit if its production facility
receives at least a 90% score. Should they fail to pass, we
create a roadmap of activities with the supplier to deliver
the required changes.
In 2022, we managed to double the number of audits thanks
to the final easing of COVID restrictions which hampered
audits in previous years.
1 The data relate to Russian private label suppliers
We are focused on growing fair and honest
partnerships and building a responsible
supply chain. We intend to expand
collaboration with new and existing partners,
boost the quality and frequency of supplier
audits and continue to deploy sustainability
practices across the entire supply chain About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
75
Planet
Our Accomplishments in 2022
1 Russian for “About EDI” (electronic document interchange system)
In 2022, we managed to increase the total
amount of waste sent for further recycling
by 45% due to a newly implemented
recyclables management system, which
envisages using enhanced accounting
procedures, specialist software and KPIs
linked to store turnover
Fix Price secured a top-three finish at the 2022 PRO EDO 1 competition for the best
EDI project. The competition was judged by members of the business community
and organised by SKB Kontur, one of the largest vendors of electronic data interchange-
focused IT solutions for business
We increased the share of sustainable
goods in our stores by introducing
new types of recyclable bags,
which are 40% made of recycled
polyethylene; shoppers, etc.
In the reporting year, we continued
to recondition and reuse our IT
equipment, thus reducing the volume
of both non-functional equipment
and e-waste
We installed LED lighting instead
of fluorescent lamps at nearly all our
DCs and stores, while all our new
stores were equipped with this type
of lighting as standard
In 2022, we continued to calculate
our GHG emissions and are now
publishing our first disclosure on
the Company’s climate impact and
its management. Our analysis and
disclosure were guided by the pillars
and approach of the TCFD framework About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
76
Our Accomplishments in 2022
1 Russian for “About EDI” (electronic document interchange system)
In 2022, we managed to increase the total
amount of waste sent for further recycling
by 45% due to a newly implemented
recyclables management system, which
envisages using enhanced accounting
procedures, specialist software and KPIs
linked to store turnover
Fix Price secured a top-three finish at the 2022 PRO EDO 1 competition for the best
EDI project. The competition was judged by members of the business community
and organised by SKB Kontur, one of the largest vendors of electronic data interchange-
focused IT solutions for business
We increased the share of sustainable
goods in our stores by introducing
new types of recyclable bags,
which are 40% made of recycled
polyethylene; shoppers, etc.
In the reporting year, we continued
to recondition and reuse our IT
equipment, thus reducing the volume
of both non-functional equipment
and e-waste
We installed LED lighting instead
of fluorescent lamps at nearly all our
DCs and stores, while all our new
stores were equipped with this type
of lighting as standard
In 2022, we continued to calculate
our GHG emissions and are now
publishing our first disclosure on
the Company’s climate impact and
its management. Our analysis and
disclosure were guided by the pillars
and approach of the TCFD framework About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
76
Retail activities such as delivering goods to DCs
and stores and selling goods generate large volumes
of waste, with packaging being the main source. Fix Price
recognises the need to minimise its waste generation
and implements a responsible waste management approach.
The Company generates several types of waste:
• solid (Hazard Classes 4 and 5, low-hazard and non-hazardous
waste);
• recyclables (cardboard and stretch film);
• office equipment (Hazard Class 4).
Waste Management
Waste volumes over 2020–2022, tonnes 1
2020 2021 2022
Total amount of waste 158,477 141,958 168,354
Total amount of waste
sent for recycling:
17,352 19,411 28,236
Cardboard 15,928 17,581 24,939
Stretch film 1,424 1,829 3,297
1 Total may not equal the sum of the components due to rounding
Our Approach to Managing
the Environmental Footprint
The Company is committed to minimising its carbon footprint
and driving efficiency gains in waste generation and energy
consumption. We formalised our approach to reducing
our negative environmental impact by developing
the Environmental, Health & Safety Policy, which is available
online. The policy describes our main principles of responsible
business conduct.
We strive to minimise waste generation in our DCs and thus,
foster the use of returnable packaging. We re-use pallets
4 to 5 times and then repair them for further use. We also
recondition batteries or send them for special recycling after
3–5 years of use. To formalise the waste-return and pallet-
repair process, we developed and introduced guidelines
for returning pallets and recyclables to DCs. The guidelines
regulate the procedures for preparing returnable
and recyclable items for transport back from stores to DCs,
as well as for maintaining records for recyclables and pallets.
Since 2020, we have been using electronic document
interchange (EDI) to reduce the use of non-renewable
resources, which enabled the Company to significantly
decrease paper consumption.
Solid waste volumes generated by the Company
are calculated according to the norms set by regional waste
disposal operators. Although we can only have a limited
influence on the regional operators’ calculations, if we see
that the norms they apply are much higher than the actual
waste volumes generated at the Company’s facilities, we
negotiate with them to adjust those norms where possible.
The packaging waste from goods sold at Fix Price stores
is mostly cardboard and polyethylene film, both of which
can be recycled. We strive to boost the volume of recyclables
collected in stores and returned to DCs to be sent
for recycling. Our stores are equipped with polyethylene
and cardboard presses to help us return the maximum
amount of waste back to DCs. Store managers are responsible
for maintaining records of the amount of waste compressed.
Towards the end of 2021, Fix Price launched an initiative
to improve how stretch film and cardboard are returned
to our DCs. We developed tailored targets for each store
regarding the amount of recyclables to be sent to DCs
depending on store revenue and the type of press installed.
If a store underperforms against its targets, we conduct
an internal audit. In early 2022, we fine-tuned the software
that helps us control recyclable turnover. At the end
of the reporting year, we saw the total amount of waste sent
for recycling increase by 45% year-on-year. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
77
and stores and selling goods generate large volumes
of waste, with packaging being the main source. Fix Price
recognises the need to minimise its waste generation
and implements a responsible waste management approach.
The Company generates several types of waste:
• solid (Hazard Classes 4 and 5, low-hazard and non-hazardous
waste);
• recyclables (cardboard and stretch film);
• office equipment (Hazard Class 4).
Waste Management
Waste volumes over 2020–2022, tonnes 1
2020 2021 2022
Total amount of waste 158,477 141,958 168,354
Total amount of waste
sent for recycling:
17,352 19,411 28,236
Cardboard 15,928 17,581 24,939
Stretch film 1,424 1,829 3,297
1 Total may not equal the sum of the components due to rounding
Our Approach to Managing
the Environmental Footprint
The Company is committed to minimising its carbon footprint
and driving efficiency gains in waste generation and energy
consumption. We formalised our approach to reducing
our negative environmental impact by developing
the Environmental, Health & Safety Policy, which is available
online. The policy describes our main principles of responsible
business conduct.
We strive to minimise waste generation in our DCs and thus,
foster the use of returnable packaging. We re-use pallets
4 to 5 times and then repair them for further use. We also
recondition batteries or send them for special recycling after
3–5 years of use. To formalise the waste-return and pallet-
repair process, we developed and introduced guidelines
for returning pallets and recyclables to DCs. The guidelines
regulate the procedures for preparing returnable
and recyclable items for transport back from stores to DCs,
as well as for maintaining records for recyclables and pallets.
Since 2020, we have been using electronic document
interchange (EDI) to reduce the use of non-renewable
resources, which enabled the Company to significantly
decrease paper consumption.
Solid waste volumes generated by the Company
are calculated according to the norms set by regional waste
disposal operators. Although we can only have a limited
influence on the regional operators’ calculations, if we see
that the norms they apply are much higher than the actual
waste volumes generated at the Company’s facilities, we
negotiate with them to adjust those norms where possible.
The packaging waste from goods sold at Fix Price stores
is mostly cardboard and polyethylene film, both of which
can be recycled. We strive to boost the volume of recyclables
collected in stores and returned to DCs to be sent
for recycling. Our stores are equipped with polyethylene
and cardboard presses to help us return the maximum
amount of waste back to DCs. Store managers are responsible
for maintaining records of the amount of waste compressed.
Towards the end of 2021, Fix Price launched an initiative
to improve how stretch film and cardboard are returned
to our DCs. We developed tailored targets for each store
regarding the amount of recyclables to be sent to DCs
depending on store revenue and the type of press installed.
If a store underperforms against its targets, we conduct
an internal audit. In early 2022, we fine-tuned the software
that helps us control recyclable turnover. At the end
of the reporting year, we saw the total amount of waste sent
for recycling increase by 45% year-on-year. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
77
The Results of Using EDI in 2022
EDI was deployed for:
100%
of counterparties
of the franchising
development unit
81%
of counterparties
in the non-commercial
procurement segment
33%
of leaseholders
69%
of goods supplies
We managed
to significantly reduce
the time taken to sign
documents, i.e. from
2–3 weeks down to
2 days
The Company streamlined document interchange. In 2022,
the number of EDI-based and processed documents
increased 6 times in comparison with the period prior
to the EDI launch.
In 2022, Fix Price managed to decrease its paper
consumption related to document flow by 32% y-o-y
We launched an EDI hotline for our counterparties
in the non-commercial segment
Fix Price secured a top-three finish at the 2022
PRO EDO competition for the best EDI project.
Judged by members of the business community,
the competition is organised by SKB Kontur, one
of the largest vendors of EDI-focused IT solutions
for business
The Company is pushing ahead with its initiative
for reconditioning and reusing IT equipment, including
everything from computer system units, laptops and cash
registers to cameras, multifunctional devices, data terminals,
and audio amplifiers. The IT Department keeps broken
and used equipment and repairs or upgrades it, installing
wherever necessary parts taken from other devices in order
to reuse the refurbished items. This enabled us to reduce
the volume of non-functional computer equipment and only
generate e-waste if the equipment could not be repaired.
We are deeply involved in the development of our private-
label products. This includes packaging: we seek to use
the least amount of wrapping possible while maximising
the use of recyclable materials and mono-materials wherever
possible.
We are also focused on increasing transparency
and the availability of information on the packaging of private-
label SKUs. On each element of combined packaging
customers can find a separate Mobius loop symbol that keeps
them informed of how to responsibly sort waste.
Moreover, in 2022, we switched to paperless receipts
at checkout which helped reduce paper waste.
In 2022, Fix Price introduced new eco-friendly bags
containing 40% recycled polyethylene. The bags
are not made from any PVC or bio additives and
can also be recycled themselves. In 2022, the bags
were extremely popular among our customers
and continue to gain traction About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
78
EDI was deployed for:
100%
of counterparties
of the franchising
development unit
81%
of counterparties
in the non-commercial
procurement segment
33%
of leaseholders
69%
of goods supplies
We managed
to significantly reduce
the time taken to sign
documents, i.e. from
2–3 weeks down to
2 days
The Company streamlined document interchange. In 2022,
the number of EDI-based and processed documents
increased 6 times in comparison with the period prior
to the EDI launch.
In 2022, Fix Price managed to decrease its paper
consumption related to document flow by 32% y-o-y
We launched an EDI hotline for our counterparties
in the non-commercial segment
Fix Price secured a top-three finish at the 2022
PRO EDO competition for the best EDI project.
Judged by members of the business community,
the competition is organised by SKB Kontur, one
of the largest vendors of EDI-focused IT solutions
for business
The Company is pushing ahead with its initiative
for reconditioning and reusing IT equipment, including
everything from computer system units, laptops and cash
registers to cameras, multifunctional devices, data terminals,
and audio amplifiers. The IT Department keeps broken
and used equipment and repairs or upgrades it, installing
wherever necessary parts taken from other devices in order
to reuse the refurbished items. This enabled us to reduce
the volume of non-functional computer equipment and only
generate e-waste if the equipment could not be repaired.
We are deeply involved in the development of our private-
label products. This includes packaging: we seek to use
the least amount of wrapping possible while maximising
the use of recyclable materials and mono-materials wherever
possible.
We are also focused on increasing transparency
and the availability of information on the packaging of private-
label SKUs. On each element of combined packaging
customers can find a separate Mobius loop symbol that keeps
them informed of how to responsibly sort waste.
Moreover, in 2022, we switched to paperless receipts
at checkout which helped reduce paper waste.
In 2022, Fix Price introduced new eco-friendly bags
containing 40% recycled polyethylene. The bags
are not made from any PVC or bio additives and
can also be recycled themselves. In 2022, the bags
were extremely popular among our customers
and continue to gain traction About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
78
1
In 2017, the
Task Force on Climate-related Financial Disclosures (TCFD)
published recommendations for companies and other organisations to disclose their financial risks related to global climate change as part of their
voluntary reporting. In its recommendations, the TCFD underlined the importance for companies to establish a practice of analysing long-term climate-related risks and opportunities and gradually embed it into risk
management, strategic planning and decision-making processes
2 Product, People, Partners, and Planet
3 For more details on the Company’s waste management processes see page 77
Climate Aspects of the Company’s Activities
As a socially and environmentally responsible business,
Fix Price recognises the importance of the climate
agenda and aligns its efforts with the expectations of its
customers, investors and other stakeholders. For this reason,
the Company promptly takes steps to improve its business
transparency and the quality of disclosures on climate change
in accordance with the best industry practice and trends.
In 2021, we published our first Sustainability Report,
disclosing data on our Scope 1, 2 and 3 greenhouse gas (GHG)
emissions. In 2022, Fix Price decided to start adopting TCFD 1
recommendations when addressing climate-related matters,
and now the Company is gradually incorporating these
principles into its business processes.
Climate Management at the Company
Fix Price’s efficient and continuously evolving corporate
governance system provides opportunities to discuss
and manage ESG issues, including those related to climate
change.
Managing Climate-Related Issues
at the Board Level
As part of its sustainability efforts and in order to develop
effective responses to climate-related challenges, Fix Price
has set up an ESG Committee, which assists the Board
of Directors in addressing the ESG agenda on a strategic level.
The committee supervises the agenda’s implementation
and integration into the Company’s business processes.
Managing Climate-Related Issues
at the Management Level
The Company’s top management is responsible for decision-
making regarding the ESG agenda as well as implementation
oversight. The decisions are further translated into tasks
which are consistently communicated to contributors
in relevant units depending on the type of activities.
Fix Price’s current Environmental, Health and Safety (EHS)
Policy sets our course and aspirations in advancing our ESG
agenda and adhering to sustainability practices. The policy
outlines the following principles and rules of responsible
business conduct, which enable the Company to manage its
environmental and social impacts:
• ensuring compliance with applicable environmental
and health and safety laws and regulations;
• communicating our commitments to employees,
customers, investors, suppliers and other stakeholders;
• pursuing where practicable, energy-efficiency initiatives,
as well as measures aimed at reducing carbon emissions
and promoting waste recycling;
• regularly monitoring our performance in addressing
and resolving EHS issues in our internal operations
and supply chain.
When planning operational changes, our teams consider
the Company’s environmental and climate footprint. In 2021,
we ran a comprehensive review of the Company’s business
processes through an ESG lens. Based on the results
of the analysis we identified four strategic ESG priorities
(the 4Ps 2
), including Planet, covering climate and other
environmental aspects. The Company uses these priorities
to develop a roadmap aimed at further advancing the ESG
agenda. Fix Price is now assessing which roadmap activities
can be implemented in the current environment.
Our business model is unique in that the Company’s
distribution centres and vehicles have no refrigeration, while
our stores keep the amount of refrigeration equipment
to a minimum, leading to considerable energy savings
and lower GHG emissions.
As part of our commitment to reduce our environmental
impact, 3 we:
• have adopted energy-efficient LED lighting in most of our
existing stores, with LED lighting installed across all new
stores as standard;
• strive to choose the most energy-efficient premises
and premises with heat-loss reducing air-lock entries
when opening new stores;
• streamline delivery routes and optimise vehicle loads
to reduce fuel consumption;
• minimise the packaging size for our products, where
applicable;
• regularly calculate our direct, energy indirect and other
indirect GHG emissions to understand the scale of our
carbon footprint and to lay the groundwork for planning
emission reduction measures.
For emissions calculations, see page 83 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
79
voluntary reporting. In its recommendations, the TCFD underlined the importance for companies to establish a practice of analysing long-term climate-related risks and opportunities and gradually embed it into risk
management, strategic planning and decision-making processes
2 Product, People, Partners, and Planet
3 For more details on the Company’s waste management processes see page 77
Climate Aspects of the Company’s Activities
As a socially and environmentally responsible business,
Fix Price recognises the importance of the climate
agenda and aligns its efforts with the expectations of its
customers, investors and other stakeholders. For this reason,
the Company promptly takes steps to improve its business
transparency and the quality of disclosures on climate change
in accordance with the best industry practice and trends.
In 2021, we published our first Sustainability Report,
disclosing data on our Scope 1, 2 and 3 greenhouse gas (GHG)
emissions. In 2022, Fix Price decided to start adopting TCFD 1
recommendations when addressing climate-related matters,
and now the Company is gradually incorporating these
principles into its business processes.
Climate Management at the Company
Fix Price’s efficient and continuously evolving corporate
governance system provides opportunities to discuss
and manage ESG issues, including those related to climate
change.
Managing Climate-Related Issues
at the Board Level
As part of its sustainability efforts and in order to develop
effective responses to climate-related challenges, Fix Price
has set up an ESG Committee, which assists the Board
of Directors in addressing the ESG agenda on a strategic level.
The committee supervises the agenda’s implementation
and integration into the Company’s business processes.
Managing Climate-Related Issues
at the Management Level
The Company’s top management is responsible for decision-
making regarding the ESG agenda as well as implementation
oversight. The decisions are further translated into tasks
which are consistently communicated to contributors
in relevant units depending on the type of activities.
Fix Price’s current Environmental, Health and Safety (EHS)
Policy sets our course and aspirations in advancing our ESG
agenda and adhering to sustainability practices. The policy
outlines the following principles and rules of responsible
business conduct, which enable the Company to manage its
environmental and social impacts:
• ensuring compliance with applicable environmental
and health and safety laws and regulations;
• communicating our commitments to employees,
customers, investors, suppliers and other stakeholders;
• pursuing where practicable, energy-efficiency initiatives,
as well as measures aimed at reducing carbon emissions
and promoting waste recycling;
• regularly monitoring our performance in addressing
and resolving EHS issues in our internal operations
and supply chain.
When planning operational changes, our teams consider
the Company’s environmental and climate footprint. In 2021,
we ran a comprehensive review of the Company’s business
processes through an ESG lens. Based on the results
of the analysis we identified four strategic ESG priorities
(the 4Ps 2
), including Planet, covering climate and other
environmental aspects. The Company uses these priorities
to develop a roadmap aimed at further advancing the ESG
agenda. Fix Price is now assessing which roadmap activities
can be implemented in the current environment.
Our business model is unique in that the Company’s
distribution centres and vehicles have no refrigeration, while
our stores keep the amount of refrigeration equipment
to a minimum, leading to considerable energy savings
and lower GHG emissions.
As part of our commitment to reduce our environmental
impact, 3 we:
• have adopted energy-efficient LED lighting in most of our
existing stores, with LED lighting installed across all new
stores as standard;
• strive to choose the most energy-efficient premises
and premises with heat-loss reducing air-lock entries
when opening new stores;
• streamline delivery routes and optimise vehicle loads
to reduce fuel consumption;
• minimise the packaging size for our products, where
applicable;
• regularly calculate our direct, energy indirect and other
indirect GHG emissions to understand the scale of our
carbon footprint and to lay the groundwork for planning
emission reduction measures.
For emissions calculations, see page 83 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
79
Climate Risks and Strategy
Current ESG and Climate Risk Assessment
Fix Price’s risk management system (RMS) is governed
by the Risk Management Policy. The policy and other internal
risk management documents are guided by international
standards on risk management, such as ISO 31000, FERMA
and COSO ERM. Our risk management system not only
aids in decision making, but also supports effective
business development and helps achieve the Group’s goals
in the context of ongoing uncertainty.
Currently, we do not assess ESG and climate risks
on a regular basis but recognising the mounting
importance of the climate agenda the Company is laying
the foundation for a future qualitative assessment of climate
risks and a scenario analysis of them. Additionally, we
are planning to incorporate the climate risk assessment
into our overall risk management system, so as to account
for climate aspect in our risk assessments and thus contribute
to a more comprehensive approach to risk monitoring
and management at the Group.
For more details on the current risk management
system, see page 90
In its future climate risk assessments, Fix Price plans to follow
TCFD recommendations and consider the following climate
scenarios highlighted in the IPCC Sixth Assessment Report
(AR6) and the International Energy Agency’s (IEA) annual
World Energy Outlooks :
• 1.5°C Scenario (SSP1–2.6)
A scenario that assumes a 1.5°C rise in the global average
temperature by 2100, with GHG emissions peaking
in 2020 and halved by 2050. Under this scenario, the world
will follow an accelerated low-carbon development path,
with a significant decline in the resource and energy intensity
of the global economy across all sectors and industries.
The share of fossil energy sources in the global energy mix
falls, reaching its all-time high by 2030.
• 2.0°C Scenario (SSP2–4.5)
This scenario is based on the assumption that GHG
emissions will peak in 2040–2050, declining afterwards.
In this scenario, the global average temperature rises
by 2°C by 2100. This is the most balanced scenario: economic
growth is maintained while material consumption growth
rates decline, but this process is less intense than under
the 1.5°C scenario. The global energy mix is assumed
to avoid any major changes, but the Paris Agreement
goals to limit the global average temperature increase
within 2°C will be achieved.
• 4.0°C Scenario (SSP5–8.5)
This scenario assumes a global average temperature increase
by more than 4°C by 2100 due to a steady growth in GHG
emissions at the business-as-usual rates through 2100.
The world follows a traditional development trend: resource-
intensive growth with elevated material consumption. GHG
emissions continue to rise until 2100, with the share of fossil
fuels in the global energy mix remaining high.
Fix Price is planning to conduct a qualitative scenario analysis
of climate risks: short-term (to 2025), medium-term (to 2030)
and long-term (to 2050), in line with international frameworks
with a particular focus on the Company’s climate impact
under the 2.0°C Scenario (SSP2–4.5).
Drawing on its review of international and national practices,
Fix Price has identified a preliminary list of transition
and physical risks in line with TCFD requirements, which
will be analysed in detail in the future due to their potential
impact on the Company’s operations. An indicative list
of climate risks relevant to Fix Price is presented below.
80 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Current ESG and Climate Risk Assessment
Fix Price’s risk management system (RMS) is governed
by the Risk Management Policy. The policy and other internal
risk management documents are guided by international
standards on risk management, such as ISO 31000, FERMA
and COSO ERM. Our risk management system not only
aids in decision making, but also supports effective
business development and helps achieve the Group’s goals
in the context of ongoing uncertainty.
Currently, we do not assess ESG and climate risks
on a regular basis but recognising the mounting
importance of the climate agenda the Company is laying
the foundation for a future qualitative assessment of climate
risks and a scenario analysis of them. Additionally, we
are planning to incorporate the climate risk assessment
into our overall risk management system, so as to account
for climate aspect in our risk assessments and thus contribute
to a more comprehensive approach to risk monitoring
and management at the Group.
For more details on the current risk management
system, see page 90
In its future climate risk assessments, Fix Price plans to follow
TCFD recommendations and consider the following climate
scenarios highlighted in the IPCC Sixth Assessment Report
(AR6) and the International Energy Agency’s (IEA) annual
World Energy Outlooks :
• 1.5°C Scenario (SSP1–2.6)
A scenario that assumes a 1.5°C rise in the global average
temperature by 2100, with GHG emissions peaking
in 2020 and halved by 2050. Under this scenario, the world
will follow an accelerated low-carbon development path,
with a significant decline in the resource and energy intensity
of the global economy across all sectors and industries.
The share of fossil energy sources in the global energy mix
falls, reaching its all-time high by 2030.
• 2.0°C Scenario (SSP2–4.5)
This scenario is based on the assumption that GHG
emissions will peak in 2040–2050, declining afterwards.
In this scenario, the global average temperature rises
by 2°C by 2100. This is the most balanced scenario: economic
growth is maintained while material consumption growth
rates decline, but this process is less intense than under
the 1.5°C scenario. The global energy mix is assumed
to avoid any major changes, but the Paris Agreement
goals to limit the global average temperature increase
within 2°C will be achieved.
• 4.0°C Scenario (SSP5–8.5)
This scenario assumes a global average temperature increase
by more than 4°C by 2100 due to a steady growth in GHG
emissions at the business-as-usual rates through 2100.
The world follows a traditional development trend: resource-
intensive growth with elevated material consumption. GHG
emissions continue to rise until 2100, with the share of fossil
fuels in the global energy mix remaining high.
Fix Price is planning to conduct a qualitative scenario analysis
of climate risks: short-term (to 2025), medium-term (to 2030)
and long-term (to 2050), in line with international frameworks
with a particular focus on the Company’s climate impact
under the 2.0°C Scenario (SSP2–4.5).
Drawing on its review of international and national practices,
Fix Price has identified a preliminary list of transition
and physical risks in line with TCFD requirements, which
will be analysed in detail in the future due to their potential
impact on the Company’s operations. An indicative list
of climate risks relevant to Fix Price is presented below.
80 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Transition Risks
Under TCFD recommendations, transition risks include risks
related to the transition to a low-carbon economy, which
may entail extensive changes in international and national
policies, as well as technology and market changes to address
mitigation and adaptation requirements related to global
climate change. A preliminary high-level analysis of climate
risks found that transition risks represent the most material
risks for the Company.
Regulatory Risks
1. The Federal Law on Limiting Greenhouse Gas Emissions
and the Risk of Direct GHG Emission Charges
The Federal Law No. 296FZ On Limiting Greenhouse Gas
Emissions published in 2021 requires mandatory disclosure
of GHG emissions: for companies whose direct emissions
are equivalent or exceed 150,000 tonnes of carbon dioxide
per year — starting 1 January 2023, and those with emissions
of 50,000 tonnes or more — starting 1 January 2024. This
is a framework law, which implies that it may be followed
by multiple regulations, clarifications and more stringent
requirements. For example, there is currently a draft
Federal Law On Amendments to the Code of Administrative
Offences of the Russian Federation which introduces a fine
for non-disclosure of GHG emissions.
Therefore, while the new law on limiting GHG emissions does
not currently apply to Fix Price — since the Company’s direct
emissions are well below the threshold set by the law — we
recognise that national regulation in this area will see further
updates in the future. The Company is taking steps to prepare
for these changes in advance as they may require extra costs,
and therefore intends to account for these risks as part of its
planning and budgeting processes, as well as to improve
its data collection and management system so as to adapt
to potential legislative changes as quickly as possible.
The Company also recognises the importance of annual
emissions monitoring and plans to assess the feasibility
of other activities to be carried out to further reduce
emissions from its operations.
2. Prohibition on the Use of Refrigerants with a High
Global Warming Potential (GWP)
By adopting the Kigali Amendment to the Montreal
Protocol, the Russian Federation has committed itself
to contributing to the climate change mitigation by gradually
curtailing the production, import and consumption
of hydrofluorocarbons (HFCs) contained in certain mixed
refrigerants, such as R404A. Fix Price’s current business
model does not envisage an extensive use of refrigeration
equipment due to the specifics of its product mix. However,
the Company’s analysis of data collected for emissions
calculations purposes revealed that Fix Price uses HFC
refrigerants which have a high global warming potential.
The Company is therefore aware that, going forward, it
must evaluate the feasibility of using in its operations more
refrigerants with a low global warming potential.
3. FCA’s Rules on Climate-Related Financial Disclosures
In 2021, the Financial Conduct Authority (FCA), the UK’s
financial market regulator, introduced requirements
for issuers to disclose climate-related information
in accordance with TCFD recommendations or to explain
why they do not disclose such information. The introduction
of these requirements by the UK market regulator highlights
the risk of international and national stock exchange
regulators introducing and tightening requirements around
the mandatory climate-related disclosures and the quality
of their content, which may entail additional costs associated
with the preparation and improvement of published
information.
Changes in Stakeholder Behaviour
Changes in consumer preferences, such as increased demand
for low-carbon-footprint products and consumers becoming
more environmentally conscious in general, may require us
to adjust our product range, which will drive the associated
costs up. The Company regularly monitors consumer
preferences, which allows us to promptly take appropriate
measures should the likelihood of this risk increase
significantly.
In addition, as the climate agenda progresses, investors
pay more attention to ESG and climate-related disclosures.
The low level of transparency in the Company’s public
non-financial data may not align with investor preferences.
Given the current macroeconomic situation, the likelihood
of this risk occurring is limited. However, the Company
continues to focus on improving the quality of its disclosures
and promoting the sustainability agenda in general, as well
to monitor the level of this risk. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
81
Under TCFD recommendations, transition risks include risks
related to the transition to a low-carbon economy, which
may entail extensive changes in international and national
policies, as well as technology and market changes to address
mitigation and adaptation requirements related to global
climate change. A preliminary high-level analysis of climate
risks found that transition risks represent the most material
risks for the Company.
Regulatory Risks
1. The Federal Law on Limiting Greenhouse Gas Emissions
and the Risk of Direct GHG Emission Charges
The Federal Law No. 296FZ On Limiting Greenhouse Gas
Emissions published in 2021 requires mandatory disclosure
of GHG emissions: for companies whose direct emissions
are equivalent or exceed 150,000 tonnes of carbon dioxide
per year — starting 1 January 2023, and those with emissions
of 50,000 tonnes or more — starting 1 January 2024. This
is a framework law, which implies that it may be followed
by multiple regulations, clarifications and more stringent
requirements. For example, there is currently a draft
Federal Law On Amendments to the Code of Administrative
Offences of the Russian Federation which introduces a fine
for non-disclosure of GHG emissions.
Therefore, while the new law on limiting GHG emissions does
not currently apply to Fix Price — since the Company’s direct
emissions are well below the threshold set by the law — we
recognise that national regulation in this area will see further
updates in the future. The Company is taking steps to prepare
for these changes in advance as they may require extra costs,
and therefore intends to account for these risks as part of its
planning and budgeting processes, as well as to improve
its data collection and management system so as to adapt
to potential legislative changes as quickly as possible.
The Company also recognises the importance of annual
emissions monitoring and plans to assess the feasibility
of other activities to be carried out to further reduce
emissions from its operations.
2. Prohibition on the Use of Refrigerants with a High
Global Warming Potential (GWP)
By adopting the Kigali Amendment to the Montreal
Protocol, the Russian Federation has committed itself
to contributing to the climate change mitigation by gradually
curtailing the production, import and consumption
of hydrofluorocarbons (HFCs) contained in certain mixed
refrigerants, such as R404A. Fix Price’s current business
model does not envisage an extensive use of refrigeration
equipment due to the specifics of its product mix. However,
the Company’s analysis of data collected for emissions
calculations purposes revealed that Fix Price uses HFC
refrigerants which have a high global warming potential.
The Company is therefore aware that, going forward, it
must evaluate the feasibility of using in its operations more
refrigerants with a low global warming potential.
3. FCA’s Rules on Climate-Related Financial Disclosures
In 2021, the Financial Conduct Authority (FCA), the UK’s
financial market regulator, introduced requirements
for issuers to disclose climate-related information
in accordance with TCFD recommendations or to explain
why they do not disclose such information. The introduction
of these requirements by the UK market regulator highlights
the risk of international and national stock exchange
regulators introducing and tightening requirements around
the mandatory climate-related disclosures and the quality
of their content, which may entail additional costs associated
with the preparation and improvement of published
information.
Changes in Stakeholder Behaviour
Changes in consumer preferences, such as increased demand
for low-carbon-footprint products and consumers becoming
more environmentally conscious in general, may require us
to adjust our product range, which will drive the associated
costs up. The Company regularly monitors consumer
preferences, which allows us to promptly take appropriate
measures should the likelihood of this risk increase
significantly.
In addition, as the climate agenda progresses, investors
pay more attention to ESG and climate-related disclosures.
The low level of transparency in the Company’s public
non-financial data may not align with investor preferences.
Given the current macroeconomic situation, the likelihood
of this risk occurring is limited. However, the Company
continues to focus on improving the quality of its disclosures
and promoting the sustainability agenda in general, as well
to monitor the level of this risk. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
81
Physical Risks
The TCFD framework also identifies a separate category
of physical risks associated with climate change. These
risks can be caused both by one-off unpredictable weather
and climate-related events and by long-term shifts in basic
climate patterns.
Changes in Extreme High Temperatures
The peak summertime temperatures across the Company’s
operating regions are trending upwards. As the number
of extreme weather events in Russia increases, extraordinarily
hot days (with temperatures above +35 °C) and heat waves
(prolonged periods of high temperatures) are expected
to become more frequent. Fix Price is aware of the need to take
this risk into account in the long term due to the potential
increase in spending on climatic equipment (air conditioners
and refrigerators), so the Company intends to pay extra
attention to monitoring and improving the resource
efficiency of its cooling systems. Conscious of the Kigali
Amendment, Fix Price is evaluating the possibility of increasing
the share of low-GWP equipment. In addition, with extreme
temperatures rising and lasting longer, the risks of adverse
impact on employee health increase. Fix Price recognises
the need for more accurate risk assessment to enable
better budgeting of spending on workplace climate control
and protection of employee health, should this risk be deemed
material.
Changes in Precipitation Regime
This risk lies in changes in the precipitation regime
typical for each region: deviations from climatic norms
in the volume and intensity of precipitation. The risk is
associated with an increase in wintertime precipitation
and the subsequent melting of snow accumulated during
this season, which can cause more pronounced spring flood
peaks.
Increased precipitation during the cold season can
cause supply chain disruptions due to the limited
availability of transport routes. Fix Price understands
the importance of addressing this risk, so in the future
we will conduct a qualitative assessment of the impact
of this risk on the business to develop strategies to monitor
and manage it.
Risk of Extreme Weather Events
Climate change can also drive an increase in the number
of extreme and particularly dangerous weather and climate
events, such as fires, floods, hurricanes, etc. The increased
frequency of such events can also have a negative impact
on supply chain stability and asset integrity.
Metrics
The Company is strongly focused on improving its
processes for collecting and recording data to measure
GHG emissions and energy efficiency, as these metrics
unlock a better understanding of the extent and nature
of the Company’s climate impact, as well as a clear
vision of further steps towards developing an effective
and actionable strategy.
In 2021, the Company measured its GHG emissions
for 2020 and 2021 for the first time in line with the GHG
Protocol Corporate Accounting and Reporting Standard
(Revised Edition).
The Company continued and enhanced its efforts
to measure its GHG emissions in 2022, thus, building
up the amount of historical data to assess changes
and strengthening the foundation for forecasting
and goal setting in terms of managing its climate impact
going forward. The calculation included emissions
from the Company’s facilities (stores, DCs, warehouse
for our online store, and offices) located in the Russian
Federation, excluding franchise stores.
82 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
The TCFD framework also identifies a separate category
of physical risks associated with climate change. These
risks can be caused both by one-off unpredictable weather
and climate-related events and by long-term shifts in basic
climate patterns.
Changes in Extreme High Temperatures
The peak summertime temperatures across the Company’s
operating regions are trending upwards. As the number
of extreme weather events in Russia increases, extraordinarily
hot days (with temperatures above +35 °C) and heat waves
(prolonged periods of high temperatures) are expected
to become more frequent. Fix Price is aware of the need to take
this risk into account in the long term due to the potential
increase in spending on climatic equipment (air conditioners
and refrigerators), so the Company intends to pay extra
attention to monitoring and improving the resource
efficiency of its cooling systems. Conscious of the Kigali
Amendment, Fix Price is evaluating the possibility of increasing
the share of low-GWP equipment. In addition, with extreme
temperatures rising and lasting longer, the risks of adverse
impact on employee health increase. Fix Price recognises
the need for more accurate risk assessment to enable
better budgeting of spending on workplace climate control
and protection of employee health, should this risk be deemed
material.
Changes in Precipitation Regime
This risk lies in changes in the precipitation regime
typical for each region: deviations from climatic norms
in the volume and intensity of precipitation. The risk is
associated with an increase in wintertime precipitation
and the subsequent melting of snow accumulated during
this season, which can cause more pronounced spring flood
peaks.
Increased precipitation during the cold season can
cause supply chain disruptions due to the limited
availability of transport routes. Fix Price understands
the importance of addressing this risk, so in the future
we will conduct a qualitative assessment of the impact
of this risk on the business to develop strategies to monitor
and manage it.
Risk of Extreme Weather Events
Climate change can also drive an increase in the number
of extreme and particularly dangerous weather and climate
events, such as fires, floods, hurricanes, etc. The increased
frequency of such events can also have a negative impact
on supply chain stability and asset integrity.
Metrics
The Company is strongly focused on improving its
processes for collecting and recording data to measure
GHG emissions and energy efficiency, as these metrics
unlock a better understanding of the extent and nature
of the Company’s climate impact, as well as a clear
vision of further steps towards developing an effective
and actionable strategy.
In 2021, the Company measured its GHG emissions
for 2020 and 2021 for the first time in line with the GHG
Protocol Corporate Accounting and Reporting Standard
(Revised Edition).
The Company continued and enhanced its efforts
to measure its GHG emissions in 2022, thus, building
up the amount of historical data to assess changes
and strengthening the foundation for forecasting
and goal setting in terms of managing its climate impact
going forward. The calculation included emissions
from the Company’s facilities (stores, DCs, warehouse
for our online store, and offices) located in the Russian
Federation, excluding franchise stores.
82 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
Here and below, purchased and generated electricity and heat
2 In 2020, the Company did not generate any electricity
3 GHG emissions for 2020-2021 were recalculated following the refinement of the data collection and calculation methodology. In 2022, the calculation
methodology was also refined due to the unavailability of previously used coefficients
Electricity consumption, 1 kWh
2020 2021 2022
Purchased electricity 105,012,744 121,492,384 132,971,001
Generated electricity 2 0 48,138 102,655
Heat consumption, GCal
2020 2021 2022
Purchased heat 145,526 179,462 212,451
Generated heat 789 1,220 1,589
Scope 1, 2 and 3 GHG Emissions
The Company continued to measure its GHG emissions
in 2022, thus expanding the amount of historical data, which
allows us to assess changes in emissions and strengthen
the foundation for expanding and enhancing our climate
impact management efforts going forward.
GHG emissions (Scope 1, 2 and 3), 3 tCO 2
-eq.
2020 2021 2022
Total GHG emissions (Scope 1 and 2) 91,841 109,907 121,007
Total GHG emissions (Scope 1, 2 and 3) 2,183,473 2,523,197 2,880,643
Direct GHG emissions (Scope 1) 3,080 3,299 2,606
Energy indirect GHG emissions (Scope 2) 88,761 106,608 118,401
Other indirect GHG emissions (Scope 3) 2,091,632 2,413,290 2,759,636
Energy Consumption and Efficiency
We recognise the need to improve energy efficiency, as these
measures are essential to mitigating climate change.
The Company consistently improves its energy efficiency
and optimises its resource consumption by installing
energy-saving equipment at new facilities and carrying out
scheduled equipment upgrades at the existing ones. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
83
2 In 2020, the Company did not generate any electricity
3 GHG emissions for 2020-2021 were recalculated following the refinement of the data collection and calculation methodology. In 2022, the calculation
methodology was also refined due to the unavailability of previously used coefficients
Electricity consumption, 1 kWh
2020 2021 2022
Purchased electricity 105,012,744 121,492,384 132,971,001
Generated electricity 2 0 48,138 102,655
Heat consumption, GCal
2020 2021 2022
Purchased heat 145,526 179,462 212,451
Generated heat 789 1,220 1,589
Scope 1, 2 and 3 GHG Emissions
The Company continued to measure its GHG emissions
in 2022, thus expanding the amount of historical data, which
allows us to assess changes in emissions and strengthen
the foundation for expanding and enhancing our climate
impact management efforts going forward.
GHG emissions (Scope 1, 2 and 3), 3 tCO 2
-eq.
2020 2021 2022
Total GHG emissions (Scope 1 and 2) 91,841 109,907 121,007
Total GHG emissions (Scope 1, 2 and 3) 2,183,473 2,523,197 2,880,643
Direct GHG emissions (Scope 1) 3,080 3,299 2,606
Energy indirect GHG emissions (Scope 2) 88,761 106,608 118,401
Other indirect GHG emissions (Scope 3) 2,091,632 2,413,290 2,759,636
Energy Consumption and Efficiency
We recognise the need to improve energy efficiency, as these
measures are essential to mitigating climate change.
The Company consistently improves its energy efficiency
and optimises its resource consumption by installing
energy-saving equipment at new facilities and carrying out
scheduled equipment upgrades at the existing ones. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
83
In 2022, total GHG emissions (Scope 1 and 2) increased by 10%
driven by higher indirect emissions amid business expansion
and a comparable increase in energy consumption. That
said, the volume of direct emissions decreased by 21% after
the calculation methodology was refined. In addition, Fix
Price’s vehicle fleet was disbanded in August 2022 and the
transportation services became fully outsourced.
Other indirect emissions (Scope 3) increased
by 14% on the back of growth in the volume of goods
purchased for sale in stores, as well as the refinement
GHG emissions (Scope 3) by category, 1 tCO2-eq.
2020 2021 2022
GHG emissions (Scope 3) 2,091,632 2,413,290 2,759,636
Category 1: Purchased Goods and Services 1,067,685 1,255,548 1,628,588
Category 2: Capital Goods 27,040 35,948 42,758
Category 3: Fuel- and Energy-Related Activities 15,232 23,605 25,947
Category 4: Upstream Transportation and Distribution 63,797 68,165 61,626
Category 5: Waste Generated in Operations 65,030 57,648 66,043
Category 6: Business Travel 469 936 998
Category 7: Employee Commuting 13,164 13,711 17,946
Category 9: Downstream Transportation and Distribution 90 199 606
Category 11: Use of Sold Products 738,904 848,733 792,851
Category 12: End-of-Life Treatment of Sold Products 100,222 108,798 122,274
1 The breakdown only covers Scope 3 categories included in the calculation. Other categories were excluded from the calculation as irrelevant for the Company
of the calculation methodology and improvements in the data
collection and processing, which enabled the expansion
of the list of categories included in the calculation.
The Company continues to consistently improve its climate-
related data collection and processing amid robust business
growth and works continuously to enhance energy efficiency
through appropriate energy-saving measures and regular
analyses of opportunities to further optimise resource
intensity at new and existing facilities. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
84
driven by higher indirect emissions amid business expansion
and a comparable increase in energy consumption. That
said, the volume of direct emissions decreased by 21% after
the calculation methodology was refined. In addition, Fix
Price’s vehicle fleet was disbanded in August 2022 and the
transportation services became fully outsourced.
Other indirect emissions (Scope 3) increased
by 14% on the back of growth in the volume of goods
purchased for sale in stores, as well as the refinement
GHG emissions (Scope 3) by category, 1 tCO2-eq.
2020 2021 2022
GHG emissions (Scope 3) 2,091,632 2,413,290 2,759,636
Category 1: Purchased Goods and Services 1,067,685 1,255,548 1,628,588
Category 2: Capital Goods 27,040 35,948 42,758
Category 3: Fuel- and Energy-Related Activities 15,232 23,605 25,947
Category 4: Upstream Transportation and Distribution 63,797 68,165 61,626
Category 5: Waste Generated in Operations 65,030 57,648 66,043
Category 6: Business Travel 469 936 998
Category 7: Employee Commuting 13,164 13,711 17,946
Category 9: Downstream Transportation and Distribution 90 199 606
Category 11: Use of Sold Products 738,904 848,733 792,851
Category 12: End-of-Life Treatment of Sold Products 100,222 108,798 122,274
1 The breakdown only covers Scope 3 categories included in the calculation. Other categories were excluded from the calculation as irrelevant for the Company
of the calculation methodology and improvements in the data
collection and processing, which enabled the expansion
of the list of categories included in the calculation.
The Company continues to consistently improve its climate-
related data collection and processing amid robust business
growth and works continuously to enhance energy efficiency
through appropriate energy-saving measures and regular
analyses of opportunities to further optimise resource
intensity at new and existing facilities. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
84
CORPORATE
GOVERNANCE
Fix Price Group PLC commands an efficient corporate governance framework
and continues to enhance it in accordance with the best international practices.
The Company ensures the protection of shareholders’ and other stakeholders’ rights About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
GOVERNANCE
Fix Price Group PLC commands an efficient corporate governance framework
and continues to enhance it in accordance with the best international practices.
The Company ensures the protection of shareholders’ and other stakeholders’ rights About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Regulations
In February 2022, the Company`s Board of Directors decided
to change the Company’s jurisdiction of incorporation
from the British Virgin Islands to the Republic of Cyprus
and later at the EGM 1 the shareholders approved
the redomiciliation.
On 17 May 2022, the Company was permanently registered
with the Registrar of Companies of the Republic of Cyprus.
Following the redomiciliation, the Company merged
with its Cyprus subsidiary, Kolmaz Holdings Ltd. (“Kolmaz”),
as a result of which the Company became the surviving entity.
The redomiciliation was carried out to simplify the Group’s
holding structure.
Corporate governance of Fix Price Group PLC is regulated
by the Memorandum and Articles of Association (“M&AA”)
and by the requirements of Cyprus Companies Law (Cap 113).
The Company’s GDRs are admitted to the Official List
of the London Stock Exchange (“LSE”), but the Company is not
subject to the provisions of the U.K. Corporate Governance Code.
Under Russian law and the Moscow Exchange rules
and regulations, admission to trading of GDRs of the Company
on the Moscow Exchange does not impose any additional
corporate governance requirements, as its GDRs are listed
on the LSE.
The Company’s activities, including those of the Board
of Directors, are governed by the M&AA. Board committees
are governed by the Terms of Reference approved by the Board
of Directors.
The key policies governing the activities of the Group are listed
on the right hand side.
Policy Description
Share Dealing Policy Establishes the principles, systems and controls for prevention of Trading
based on Insider Information by Insiders and/or PCAs (each as defined
in Article 2 of the Policy) in order to ensure compliance to the applicable
regulatory rules and to protect the public image of the Company
Inside Information and Disclosure Policy Ensures that the Group complies with all applicable rules and regulations
(including the MAR 2 and the Russian Insider Information Law) in relation
to the identification, control and disclosure of inside information
Environmental, Health & Safety Policy Ensures the health and safety of personnel and consumers and aims
to minimise the impact of the Group’s business on the environment.
The Group has committed to implementing initiatives for energy efficiency,
including the reduction of its carbon footprint and waste, improved
recycling and the regular monitoring of its environmental, health and safety
performance
Modern Anti-Slavery and Human Trafficking Policy Establishes monitoring to ensure that slavery, including forced and child
labour, and human trafficking are excluded from the Group’s operations
and supply chain. It requires suppliers to comply with this policy, which
is periodically evaluated. It also ensures that suppliers do not engage
in any manufacturing, marketing or selling of counterfeit products
to the Group
Anti-Money Laundering Policy Ensures that the Group has systems and procedures to prevent money
laundering, including by setting relevant guidelines to raise awareness
internally, implementing transaction monitoring programmes
and promoting a zero-tolerance culture towards illegal activities
Anti-Bribery and Corruption Policy Ensures that the Group’s personnel comply with applicable anti-corruption
laws, rules and regulations; Pursuant to this policy, the Group has
committed to conducting business in an ethical manner and has developed
and maintains procedures to mitigate bribery and corruption risks
Business Ethics Policy (Code of Conduct) Ensures that the Group’s business is conducted in a consistently legal
and ethical manner and promotes compliance with applicable governmental
laws, rules and regulations. It establishes a framework for ensuring diversity
and zero tolerance to discrimination, commits to acting in accordance
with international human and labour rights standards. It also ensures that
the information in relation to the Group published in public communications
is complete, fair, accurate, timely and comprehensive
1 Extraordinary General Meeting of Shareholders
2 Market Abuse Regulation
86 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
In February 2022, the Company`s Board of Directors decided
to change the Company’s jurisdiction of incorporation
from the British Virgin Islands to the Republic of Cyprus
and later at the EGM 1 the shareholders approved
the redomiciliation.
On 17 May 2022, the Company was permanently registered
with the Registrar of Companies of the Republic of Cyprus.
Following the redomiciliation, the Company merged
with its Cyprus subsidiary, Kolmaz Holdings Ltd. (“Kolmaz”),
as a result of which the Company became the surviving entity.
The redomiciliation was carried out to simplify the Group’s
holding structure.
Corporate governance of Fix Price Group PLC is regulated
by the Memorandum and Articles of Association (“M&AA”)
and by the requirements of Cyprus Companies Law (Cap 113).
The Company’s GDRs are admitted to the Official List
of the London Stock Exchange (“LSE”), but the Company is not
subject to the provisions of the U.K. Corporate Governance Code.
Under Russian law and the Moscow Exchange rules
and regulations, admission to trading of GDRs of the Company
on the Moscow Exchange does not impose any additional
corporate governance requirements, as its GDRs are listed
on the LSE.
The Company’s activities, including those of the Board
of Directors, are governed by the M&AA. Board committees
are governed by the Terms of Reference approved by the Board
of Directors.
The key policies governing the activities of the Group are listed
on the right hand side.
Policy Description
Share Dealing Policy Establishes the principles, systems and controls for prevention of Trading
based on Insider Information by Insiders and/or PCAs (each as defined
in Article 2 of the Policy) in order to ensure compliance to the applicable
regulatory rules and to protect the public image of the Company
Inside Information and Disclosure Policy Ensures that the Group complies with all applicable rules and regulations
(including the MAR 2 and the Russian Insider Information Law) in relation
to the identification, control and disclosure of inside information
Environmental, Health & Safety Policy Ensures the health and safety of personnel and consumers and aims
to minimise the impact of the Group’s business on the environment.
The Group has committed to implementing initiatives for energy efficiency,
including the reduction of its carbon footprint and waste, improved
recycling and the regular monitoring of its environmental, health and safety
performance
Modern Anti-Slavery and Human Trafficking Policy Establishes monitoring to ensure that slavery, including forced and child
labour, and human trafficking are excluded from the Group’s operations
and supply chain. It requires suppliers to comply with this policy, which
is periodically evaluated. It also ensures that suppliers do not engage
in any manufacturing, marketing or selling of counterfeit products
to the Group
Anti-Money Laundering Policy Ensures that the Group has systems and procedures to prevent money
laundering, including by setting relevant guidelines to raise awareness
internally, implementing transaction monitoring programmes
and promoting a zero-tolerance culture towards illegal activities
Anti-Bribery and Corruption Policy Ensures that the Group’s personnel comply with applicable anti-corruption
laws, rules and regulations; Pursuant to this policy, the Group has
committed to conducting business in an ethical manner and has developed
and maintains procedures to mitigate bribery and corruption risks
Business Ethics Policy (Code of Conduct) Ensures that the Group’s business is conducted in a consistently legal
and ethical manner and promotes compliance with applicable governmental
laws, rules and regulations. It establishes a framework for ensuring diversity
and zero tolerance to discrimination, commits to acting in accordance
with international human and labour rights standards. It also ensures that
the information in relation to the Group published in public communications
is complete, fair, accurate, timely and comprehensive
1 Extraordinary General Meeting of Shareholders
2 Market Abuse Regulation
86 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Corporate Governance Structure
THE GROUP
CONTINUALLY
ENHANCES ITS
CORPORATE
GOVERNANCE
PRACTICES
Corporate governance system of Fix Price Group PLC complies with the requirements of the Financial Conduct Authority
and Cypriot law, as well as international best practices. The Group continually enhances its corporate governance practices.
The highest corporate body of Fix Price Group PLC is the General Meeting of Shareholders.
The Board of Directors is elected by the shareholders and reports to them. The Board of Directors conducts strategic management
of the Group and supervises the Group’s executive team.
The Group’s executive team, led by the Chief Executive Officer, manages day-to-day operations of the Group and implements tasks
assigned by the shareholders and the Board of Directors.
General Meeting of Shareholders
Board of Directors
ESG
Committee
Nomination
and Remuneration
Committee
Strategy
Committee
Audit
Committee
Chief Executive
Officer
Management
Election, appointment by Accountability to
87 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
THE GROUP
CONTINUALLY
ENHANCES ITS
CORPORATE
GOVERNANCE
PRACTICES
Corporate governance system of Fix Price Group PLC complies with the requirements of the Financial Conduct Authority
and Cypriot law, as well as international best practices. The Group continually enhances its corporate governance practices.
The highest corporate body of Fix Price Group PLC is the General Meeting of Shareholders.
The Board of Directors is elected by the shareholders and reports to them. The Board of Directors conducts strategic management
of the Group and supervises the Group’s executive team.
The Group’s executive team, led by the Chief Executive Officer, manages day-to-day operations of the Group and implements tasks
assigned by the shareholders and the Board of Directors.
General Meeting of Shareholders
Board of Directors
ESG
Committee
Nomination
and Remuneration
Committee
Strategy
Committee
Audit
Committee
Chief Executive
Officer
Management
Election, appointment by Accountability to
87 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
General Meeting
of Shareholders
All Annual General Meetings are conducted in accordance
with Cypriot legislation. Shareholders in a general meeting
are entitled to appoint and remove directors of the Company.
Shareholders of Fix Price Group PLC may significantly affect
the Company’s business by participating in the General
Meeting of Shareholders.
The key capabilities of the General Meeting of Shareholders
include:
• alteration of the Memorandum and Articles of Association;
• mergers, consolidations, arrangements, amalgamations,
and schemes of reconstruction;
• re-domiciliation of the Company;
• creation of a new class of shares and variation of class rights;
• acquisition by the Company of its own shares under certain
conditions specified in the law or the Articles;
• reduction of share capital and any share premium account
of the Company in any way; extinguishment or reduction
of the liability on any of the Company’s shares in respect
of share capital not paid up; cancelation of any paid-up share
capital which is lost or unrepresented by available assets;
and payment of any paid-up share capital which is in excess
of the Company’s requirements subject to the court
confirming the reduction;
• approval by a special resolution of assignment of office
made under any agreement entered into between any
person and the Company for empowering a director or
manager of the Company to assign their office to another
person;
• winding up of the Company by the court;
• voluntary winding up of the Company;
• consideration of, inter alia, the financial statements,
approval of dividend payments (provided such dividend
payments are proposed by the directors), and appointment
and remuneration of auditors;
• other matters prescribed by the Cyprus Companies Law
(Cap 113) and the M&AA.
Board
of Directors
The Board of Directors supervises and controls
the management and operations of the Company and may
exercise all powers of the Company in doing so, except
to the extent that any such power is required or reserved
by the Cyprus Companies Law (Cap 113) or the M&AA
to be exercised by the shareholders.
The Board of Directors has an Audit Committee, a Nomination
and Remuneration Committee, a Strategy Committee
and an ESG Committee. The сommittees are comprised
of directors with the relevant professional experience
and expertise. When electing members and chairpersons
of the committees, education and professional training
of the candidates and their expertise within the сommittee’s
area of activity are considered.
Board Committees
Audit Committee
The Audit Committee assists the Board of Directors
with the review of the Group’s internal and external audit
activities: internal control systems, compliance with financial
reporting requirements, and the scope, results and cost
effectiveness of the external audit.
Nomination and Remuneration
Committee
The Nomination and Remuneration Committee makes
recommendations to the Board of Directors regarding
the appointment of new directors, helps identify, interview
and select candidates with suitable experience and assesses
the independence of such candidates. The сommittee
reviews senior management appointments, company-wide
succession planning and other human resources-related
matters.
It also assists the Board of Directors in relation
to remuneration, including reviewing the Group’s overall
compensation policy, making proposals to the Board
of Directors as to the remuneration of the directors
of the Company and of the Group’s senior management.
Strategy Committee
The Strategy Committee assists the Board of Directors
with the analysis and monitoring of the strategic
management issues, including the consideration of mergers
and acquisitions opportunities and large investment projects.
ESG Committee
The ESG Committee assists the Board in supervising
sustainability issues. The committee is in charge of
managing ESG factors at a strategic level. It oversees
the implementation of Fix Price’s sustainability agenda
and its integration into the Company’s business processes.
88 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
of Shareholders
All Annual General Meetings are conducted in accordance
with Cypriot legislation. Shareholders in a general meeting
are entitled to appoint and remove directors of the Company.
Shareholders of Fix Price Group PLC may significantly affect
the Company’s business by participating in the General
Meeting of Shareholders.
The key capabilities of the General Meeting of Shareholders
include:
• alteration of the Memorandum and Articles of Association;
• mergers, consolidations, arrangements, amalgamations,
and schemes of reconstruction;
• re-domiciliation of the Company;
• creation of a new class of shares and variation of class rights;
• acquisition by the Company of its own shares under certain
conditions specified in the law or the Articles;
• reduction of share capital and any share premium account
of the Company in any way; extinguishment or reduction
of the liability on any of the Company’s shares in respect
of share capital not paid up; cancelation of any paid-up share
capital which is lost or unrepresented by available assets;
and payment of any paid-up share capital which is in excess
of the Company’s requirements subject to the court
confirming the reduction;
• approval by a special resolution of assignment of office
made under any agreement entered into between any
person and the Company for empowering a director or
manager of the Company to assign their office to another
person;
• winding up of the Company by the court;
• voluntary winding up of the Company;
• consideration of, inter alia, the financial statements,
approval of dividend payments (provided such dividend
payments are proposed by the directors), and appointment
and remuneration of auditors;
• other matters prescribed by the Cyprus Companies Law
(Cap 113) and the M&AA.
Board
of Directors
The Board of Directors supervises and controls
the management and operations of the Company and may
exercise all powers of the Company in doing so, except
to the extent that any such power is required or reserved
by the Cyprus Companies Law (Cap 113) or the M&AA
to be exercised by the shareholders.
The Board of Directors has an Audit Committee, a Nomination
and Remuneration Committee, a Strategy Committee
and an ESG Committee. The сommittees are comprised
of directors with the relevant professional experience
and expertise. When electing members and chairpersons
of the committees, education and professional training
of the candidates and their expertise within the сommittee’s
area of activity are considered.
Board Committees
Audit Committee
The Audit Committee assists the Board of Directors
with the review of the Group’s internal and external audit
activities: internal control systems, compliance with financial
reporting requirements, and the scope, results and cost
effectiveness of the external audit.
Nomination and Remuneration
Committee
The Nomination and Remuneration Committee makes
recommendations to the Board of Directors regarding
the appointment of new directors, helps identify, interview
and select candidates with suitable experience and assesses
the independence of such candidates. The сommittee
reviews senior management appointments, company-wide
succession planning and other human resources-related
matters.
It also assists the Board of Directors in relation
to remuneration, including reviewing the Group’s overall
compensation policy, making proposals to the Board
of Directors as to the remuneration of the directors
of the Company and of the Group’s senior management.
Strategy Committee
The Strategy Committee assists the Board of Directors
with the analysis and monitoring of the strategic
management issues, including the consideration of mergers
and acquisitions opportunities and large investment projects.
ESG Committee
The ESG Committee assists the Board in supervising
sustainability issues. The committee is in charge of
managing ESG factors at a strategic level. It oversees
the implementation of Fix Price’s sustainability agenda
and its integration into the Company’s business processes.
88 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Management
Fix Price’s management team has vast experience in retail
industry. All of our managers are qualified to effectively
govern our operations, as well as to protect the best
interests of our shareholders, consumers and a wider range
of stakeholders. The Board of Directors regularly assesses
performance of the management team and makes necessary
adjustments.
Internal Control
The key objectives of the project are:
to revise the architecture of the business processes,
taking into account the Russian and international
best practices
to ameliorate the integrated platform for all initiatives
to modify the Company’s activities, primarily
to devise interaction between the business processes
in a single system
to develop an up-to-date regulatory framework
for the business processes, the risk management
and the internal control
to build up a tool for accumulating knowledge
on maintaining and bettering the business processes
to implement regular audits of the business
processes to identify areas of issues and process
growth fields
to launch an on-going analysis and testing
of the control procedures, including risks
and deviations in the business process indicators
A unified business process management system,
inclusive of risks and control procedures, allows:
to broaden transparency, manageability
and controllability of the Company’s activities
at all levels
to determine and eliminate challenging areas
of the business processes, and thus to bring down
processes costs
to carry out regular activities in order to manage
operational risks through continuous training,
optimisation of business processes and upgrades
of software products
to involve the Company’s employees in the active
development of the process approach, taking
into account risks and control procedures,
as well as in further streamlining of the business
processes themselves
The Company has already updated the Internal Control Policy
and the Risk Management Policy, featuring the new approach
to integrating the business process management, the internal
control and the risk management systems.
Integration of the Process
Management, the Internal Control
System and the Risk Management
System
Business growth and rapid change required a review
of the management approach to the business processes
and their interaction with the internal control system
and the risk management system.
To streamline the business processes and boost performance
while maintaining quality and costs at the same level,
we launched the “Processes Help” project in 2022.
The project introduced a systematic and integrated
approach to the business process management that factors
in risks and control procedures. The integrated model
of the Company will set up an environment for change
and enhancement of its activities. The model will allow
for auditing the business processes and evaluating
the efficiency of the internal control system.
89 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price’s management team has vast experience in retail
industry. All of our managers are qualified to effectively
govern our operations, as well as to protect the best
interests of our shareholders, consumers and a wider range
of stakeholders. The Board of Directors regularly assesses
performance of the management team and makes necessary
adjustments.
Internal Control
The key objectives of the project are:
to revise the architecture of the business processes,
taking into account the Russian and international
best practices
to ameliorate the integrated platform for all initiatives
to modify the Company’s activities, primarily
to devise interaction between the business processes
in a single system
to develop an up-to-date regulatory framework
for the business processes, the risk management
and the internal control
to build up a tool for accumulating knowledge
on maintaining and bettering the business processes
to implement regular audits of the business
processes to identify areas of issues and process
growth fields
to launch an on-going analysis and testing
of the control procedures, including risks
and deviations in the business process indicators
A unified business process management system,
inclusive of risks and control procedures, allows:
to broaden transparency, manageability
and controllability of the Company’s activities
at all levels
to determine and eliminate challenging areas
of the business processes, and thus to bring down
processes costs
to carry out regular activities in order to manage
operational risks through continuous training,
optimisation of business processes and upgrades
of software products
to involve the Company’s employees in the active
development of the process approach, taking
into account risks and control procedures,
as well as in further streamlining of the business
processes themselves
The Company has already updated the Internal Control Policy
and the Risk Management Policy, featuring the new approach
to integrating the business process management, the internal
control and the risk management systems.
Integration of the Process
Management, the Internal Control
System and the Risk Management
System
Business growth and rapid change required a review
of the management approach to the business processes
and their interaction with the internal control system
and the risk management system.
To streamline the business processes and boost performance
while maintaining quality and costs at the same level,
we launched the “Processes Help” project in 2022.
The project introduced a systematic and integrated
approach to the business process management that factors
in risks and control procedures. The integrated model
of the Company will set up an environment for change
and enhancement of its activities. The model will allow
for auditing the business processes and evaluating
the efficiency of the internal control system.
89 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
AO Business Solutions and Technologies (TIN 7703097990),
legal address: 5 Lesnaya St., Moscow, 125047,
Russia, a member of the Self-regulatory Organization
of the Auditors Association “the Commonwealth”
(AAC SRO). AO Business Solutions and Technologies
is included in the control copy of the register of auditors
and audit organisations with the registration number
ORNZ 12006020384, and was approved as the auditor
of the Company’s consolidated financial statements prepared
in accordance with the International Financial Reporting
Standards. AO Business Solutions and Technologies
was registered in accordance with the legislation
of the Russian Federation on 30 October 1992 by the Moscow
Registration Chamber.
The Board of Directors approved the Company’s external
auditor to provide:
• an independent audit of the consolidated financial
statements of the Group prepared according
to the International Financial Reporting Standards
for the year ending 31 December 2022; and
• an independent review of the interim consolidated financial
information of the Group for the six months ending
30 June 2022.
The total remuneration paid in 2022 for the audit and non-
audit services to AO Business Solutions and Technologies
amounted to RUB 36 million.
External Audit Risk Management
General Information
In 2022, Fix Price continued to develop its risk management
practices as an integral corporate function.
Participants in the risk management process identify, assess
and mitigate risks, and minimise negative implications
should they materialise, which all ensure business stability
and continuity.
The effectiveness of risk management is improved
by engaging a wide range of participants, from managers
to line staff. To this end, we promote a risk culture, regularly
train employees and run standardised stages of the PDCA 1
cycle.
An independent diagnostic run in late 2021–early 2022 found
that Fix Price’s risk management system was consistent
with good corporate practices.
Risk management at Fix Price focuses on the following:
• identifying and systematically analysing risks
to the Company;
• considering material risks when making management
decisions as a matter of course;
• assigning risk management responsibilities;
• developing measures and plans to respond to material risks;
• monitoring risks and the effectiveness of risk management;
• building risk management expertise.
Risk Management Structure
and Areas of Responsibility
Risk management
supervision
Set up
and maintenance
of an effective risk
management system
Risk
Management Policy
implementation, risks
updates, business units
coordination in activities
related to risk
management
Ensuring the risk
management system runs
smoothly within their area
of responsibility
Audit Committee
of the Board
of Directors
CEO and
top managers
Risk management
unit
Units and project
teams; business units
(coordinators: analysts,
methodologists, technologists)
1 The PDCA (Plan-Do-Check-Act) / Deming cycle is a decision-making methodology and algorithm for managing processes and achieving objectives
90 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
legal address: 5 Lesnaya St., Moscow, 125047,
Russia, a member of the Self-regulatory Organization
of the Auditors Association “the Commonwealth”
(AAC SRO). AO Business Solutions and Technologies
is included in the control copy of the register of auditors
and audit organisations with the registration number
ORNZ 12006020384, and was approved as the auditor
of the Company’s consolidated financial statements prepared
in accordance with the International Financial Reporting
Standards. AO Business Solutions and Technologies
was registered in accordance with the legislation
of the Russian Federation on 30 October 1992 by the Moscow
Registration Chamber.
The Board of Directors approved the Company’s external
auditor to provide:
• an independent audit of the consolidated financial
statements of the Group prepared according
to the International Financial Reporting Standards
for the year ending 31 December 2022; and
• an independent review of the interim consolidated financial
information of the Group for the six months ending
30 June 2022.
The total remuneration paid in 2022 for the audit and non-
audit services to AO Business Solutions and Technologies
amounted to RUB 36 million.
External Audit Risk Management
General Information
In 2022, Fix Price continued to develop its risk management
practices as an integral corporate function.
Participants in the risk management process identify, assess
and mitigate risks, and minimise negative implications
should they materialise, which all ensure business stability
and continuity.
The effectiveness of risk management is improved
by engaging a wide range of participants, from managers
to line staff. To this end, we promote a risk culture, regularly
train employees and run standardised stages of the PDCA 1
cycle.
An independent diagnostic run in late 2021–early 2022 found
that Fix Price’s risk management system was consistent
with good corporate practices.
Risk management at Fix Price focuses on the following:
• identifying and systematically analysing risks
to the Company;
• considering material risks when making management
decisions as a matter of course;
• assigning risk management responsibilities;
• developing measures and plans to respond to material risks;
• monitoring risks and the effectiveness of risk management;
• building risk management expertise.
Risk Management Structure
and Areas of Responsibility
Risk management
supervision
Set up
and maintenance
of an effective risk
management system
Risk
Management Policy
implementation, risks
updates, business units
coordination in activities
related to risk
management
Ensuring the risk
management system runs
smoothly within their area
of responsibility
Audit Committee
of the Board
of Directors
CEO and
top managers
Risk management
unit
Units and project
teams; business units
(coordinators: analysts,
methodologists, technologists)
1 The PDCA (Plan-Do-Check-Act) / Deming cycle is a decision-making methodology and algorithm for managing processes and achieving objectives
90 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
The Board of Directors (via the Audit Committee) determines
the underlying principles and approaches that drive the risk
management system and evaluates its effectiveness.
The CEO and top managers set up and maintain
an effective risk management system, assign authority,
duties and responsibilities for specific risk management
procedures to unit heads, approve requirements for reporting
forms, review key risks and make relevant decisions,
and promote a risk-management culture.
The risk management unit facilitates the risk management
process at the Company in several ways. It implements
the Risk Management Policy within its remit; requests risk
updates; coordinates activities of the units, project teams
and business units related to identifying and assessing
risks and developing risk management measures; provides
relevant methodological support; prepares materials for top
managers and the Board of Directors; and promotes a risk
culture at the Company.
Unit heads, project teams and business units ensure the risk
management system runs smoothly within their area
of responsibility. In particular, they identify and assess risks,
develop relevant measures and ensure their implementation,
including the implementation of control procedures.
They appoint coordinators or authorised representatives
who oversee the day-to-day management of the process
and, if necessary, escalate to the risk management unit.
Key Activities in 2022
In 2022, we continued to integrate the principles of risk-based
management into the Company’s practices.
In the first half of the year, we reviewed the results
of a risk management diagnostic conducted
in late 2021 and early 2022 by a Big Four management
consulting firm. The assessment was conducted using
the contractor’s model based on best practices in Russian
and international retail companies. The diagnostic gauged
the system’s current maturity level and yielded initiatives
and recommendations for future development.
Fix Price launched a global training session for its employees
covering basic risk management concepts and integrated
risk management systems. We have added risk courses
to the mandatory onboarding training programme for new
hires and run them on a quarterly basis. We have also
made course recordings available to watch for all Fix Price
employees.
We continued to develop communication channels to keep
employees informed about risks. In addition to the corporate
intranet, we set up a Telegram account to expand the target
audience to include store and distribution centre employees.
Plans for 2023
In 2023, Fix Price intends to integrate risk management
system activities with regular internal control system
procedures to build an integrated risk management
and internal control system (RMICS). We plan a risk
reassessment cycle following an updated methodology
and using new templates to consolidate the risk register.
In addition, we will regularly monitor the geopolitical
and sanctions environment to identify and assess risks
and mitigate them accordingly.
IN 2022, WE
CONTINUED TO
INTEGRATE THE
PRINCIPLES OF
RISK-BASED
MANAGEMENT INTO
THE COMPANY’S
PRACTICES
91 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
the underlying principles and approaches that drive the risk
management system and evaluates its effectiveness.
The CEO and top managers set up and maintain
an effective risk management system, assign authority,
duties and responsibilities for specific risk management
procedures to unit heads, approve requirements for reporting
forms, review key risks and make relevant decisions,
and promote a risk-management culture.
The risk management unit facilitates the risk management
process at the Company in several ways. It implements
the Risk Management Policy within its remit; requests risk
updates; coordinates activities of the units, project teams
and business units related to identifying and assessing
risks and developing risk management measures; provides
relevant methodological support; prepares materials for top
managers and the Board of Directors; and promotes a risk
culture at the Company.
Unit heads, project teams and business units ensure the risk
management system runs smoothly within their area
of responsibility. In particular, they identify and assess risks,
develop relevant measures and ensure their implementation,
including the implementation of control procedures.
They appoint coordinators or authorised representatives
who oversee the day-to-day management of the process
and, if necessary, escalate to the risk management unit.
Key Activities in 2022
In 2022, we continued to integrate the principles of risk-based
management into the Company’s practices.
In the first half of the year, we reviewed the results
of a risk management diagnostic conducted
in late 2021 and early 2022 by a Big Four management
consulting firm. The assessment was conducted using
the contractor’s model based on best practices in Russian
and international retail companies. The diagnostic gauged
the system’s current maturity level and yielded initiatives
and recommendations for future development.
Fix Price launched a global training session for its employees
covering basic risk management concepts and integrated
risk management systems. We have added risk courses
to the mandatory onboarding training programme for new
hires and run them on a quarterly basis. We have also
made course recordings available to watch for all Fix Price
employees.
We continued to develop communication channels to keep
employees informed about risks. In addition to the corporate
intranet, we set up a Telegram account to expand the target
audience to include store and distribution centre employees.
Plans for 2023
In 2023, Fix Price intends to integrate risk management
system activities with regular internal control system
procedures to build an integrated risk management
and internal control system (RMICS). We plan a risk
reassessment cycle following an updated methodology
and using new templates to consolidate the risk register.
In addition, we will regularly monitor the geopolitical
and sanctions environment to identify and assess risks
and mitigate them accordingly.
IN 2022, WE
CONTINUED TO
INTEGRATE THE
PRINCIPLES OF
RISK-BASED
MANAGEMENT INTO
THE COMPANY’S
PRACTICES
91 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Key Risks and Mitigants
Fix Price distinguishes between:
Impact
Probability
1
1
Very unlikely
Very
low
2
Unlikely
Low
3
Possible
High
4
Likely
Very
high
5
Highly likely
S-06 ↔ O-11 ↔
O-03 ↔
S-02 ↔
S-07 ↔
O-05 ↔ S-01 ↔
O-17 ↑
O-13 ↔
O-14 ↔
R-15 ↔
O-12 ↔
O-08 ↔
S-16 ↓
F-10 ↓
R-04 ↑
2
3
4
5
S R F O strategic risks operational risks financial risks regulatory risks
92 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Fix Price distinguishes between:
Impact
Probability
1
1
Very unlikely
Very
low
2
Unlikely
Low
3
Possible
High
4
Likely
Very
high
5
Highly likely
S-06 ↔ O-11 ↔
O-03 ↔
S-02 ↔
S-07 ↔
O-05 ↔ S-01 ↔
O-17 ↑
O-13 ↔
O-14 ↔
R-15 ↔
O-12 ↔
O-08 ↔
S-16 ↓
F-10 ↓
R-04 ↑
2
3
4
5
S R F O strategic risks operational risks financial risks regulatory risks
92 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Type
Risk
Level / Change
Mitigation
S-02 Risk of pressure
on gross margin
High / stable Expanding the Russian supplier base (having a duplicate
contract with a second Russian supplier for each item
to ensure uninterrupted supply in an emergency); ensuring
product rotation and running deeper assortment and COGS
analysis; increasing the number of freight forwarders;
switching supplies to lower cost options
S-06 Risk of construction
and installation
contractors refusing
to perform work
on agreed terms
Low / stable Ensuring that construction and installation contracts
are signed with multiple contractors; finding new contractors,
conducting tenders to revise costs
S-07 Staff outsourcing
risk
High / stable Reducing the share of outsourcing; switching counterparties
in the event that they fail to provide the Company
with a sufficient number of employees in a timely manner
and at competitive rates
S-01 Reputation risk Low / stable Streamlining the activities of the Ethics Committee; tracking
the hotline’s performance; complying with the Code
of Business Ethics; developing the Group’s corporate culture
O-03 Risk of supply chain
disruptions
Medium /
stable
Reducing the share of imports in purchases; identifying
alternative ways to ship goods from China (rail, sea, road);
identifying alternatives/replacements from Russian suppliers;
increasing the number of freight forwarders to transport
goods; switching supplies to lower cost shipping lines
O-08 Risk of higher
employee turnover
High / stable Analysing the labour market; revising salaries or benefits
to drive competitiveness
O-12 Information
security risk
High / stable Applying security systems and tools to counter cyber attacks
(DDoS protection solutions, antiviruses, WAF, NGFW, etc.);
developing and introducing information security regulations;
ensuring employment contracts for Group employees are
aligned with up-to-date information security regulations;
investigating any violations of information security rules
and regulations by Group employees; training relevant
employees to monitor compliance with information security
procedures
O-13 Risk of IT system
failure
Medium /
stable
Redistributing the IT system load to other systems; forecasting
the growing load on systems; upgrading the server fleet
in due course; using a testing landscape for fine-tuning;
building up a stock of backup telecommunications
equipment; embedding a fail-safe connection circuit across
all key facilities (offices, data centres, distribution centres);
providing redundant communication channels across key
facilities (offices, data centres, distribution centres)
Type Risk Level / Change Mitigation
O-05 Risk of trade
restrictions in
the wake of the
COVID-19 pandemic
Low / stable Closely monitoring changes to the Essentials List; rapidly
updating the product range subject to possible restrictions;
developing alternative sales channels (online, click & collect,
etc.)
О-11 Risks of non-
compliance with the
requirements of the
risk management
and internal control
system
Low / stable Enhancing the design of internal controls to improve
productivity; automating controls; reviewing and establishing
workable standards for controls
О-14 Asset integrity risk
(stores, distribution
centres, offices)
Medium /
stable
Entering into scheduled maintenance contracts; taking out
inventory insurance
F-10 Currency risk Medium /
declining
Hedging the currency risk with derivatives; reducing
the number of contracts exposed to currency risks; setting
upper and lower bounds for exchange differences in contracts
with contractors/suppliers
R-15 Fraud
and corruption risk
Medium /
stable
Updating anti-corruption procedure rules and the Regulations
on Tender Procedures; including anti-corruption clauses
in contracts for the purchase of goods or services; conducting
audits to identify potential cases of corruption by Group
employees or suppliers of goods or services
R-04 Risk of changes
in the local
legislation related
to the product
range or pricing
restrictions
High /
growing
Local sourcing; supplier rotation; negotiating engagement
terms
S-16 Sanctions risks High / new
(declining)
Communicating with account managers of partner banks
to ensure uninterrupted and full service delivery; making a list
of business-critical equipment for stores, distribution centres
and offices; building up reserves; tracking balances
O-17 Marketing risks Medium / new
(growing)
Opting for more cost-effective marketing activities;
implementing SMM in-house within payroll costs to showcase
the Company’s product range; balancing the budget
and marketing mix when selecting the method and channel
to communicate with the target audience; establishing
our unique selling proposition (USP) through product/price
combination and through product category image-building
communications
93 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
S-02 Risk of pressure
on gross margin
High / stable Expanding the Russian supplier base (having a duplicate
contract with a second Russian supplier for each item
to ensure uninterrupted supply in an emergency); ensuring
product rotation and running deeper assortment and COGS
analysis; increasing the number of freight forwarders;
switching supplies to lower cost options
S-06 Risk of construction
and installation
contractors refusing
to perform work
on agreed terms
Low / stable Ensuring that construction and installation contracts
are signed with multiple contractors; finding new contractors,
conducting tenders to revise costs
S-07 Staff outsourcing
risk
High / stable Reducing the share of outsourcing; switching counterparties
in the event that they fail to provide the Company
with a sufficient number of employees in a timely manner
and at competitive rates
S-01 Reputation risk Low / stable Streamlining the activities of the Ethics Committee; tracking
the hotline’s performance; complying with the Code
of Business Ethics; developing the Group’s corporate culture
O-03 Risk of supply chain
disruptions
Medium /
stable
Reducing the share of imports in purchases; identifying
alternative ways to ship goods from China (rail, sea, road);
identifying alternatives/replacements from Russian suppliers;
increasing the number of freight forwarders to transport
goods; switching supplies to lower cost shipping lines
O-08 Risk of higher
employee turnover
High / stable Analysing the labour market; revising salaries or benefits
to drive competitiveness
O-12 Information
security risk
High / stable Applying security systems and tools to counter cyber attacks
(DDoS protection solutions, antiviruses, WAF, NGFW, etc.);
developing and introducing information security regulations;
ensuring employment contracts for Group employees are
aligned with up-to-date information security regulations;
investigating any violations of information security rules
and regulations by Group employees; training relevant
employees to monitor compliance with information security
procedures
O-13 Risk of IT system
failure
Medium /
stable
Redistributing the IT system load to other systems; forecasting
the growing load on systems; upgrading the server fleet
in due course; using a testing landscape for fine-tuning;
building up a stock of backup telecommunications
equipment; embedding a fail-safe connection circuit across
all key facilities (offices, data centres, distribution centres);
providing redundant communication channels across key
facilities (offices, data centres, distribution centres)
Type Risk Level / Change Mitigation
O-05 Risk of trade
restrictions in
the wake of the
COVID-19 pandemic
Low / stable Closely monitoring changes to the Essentials List; rapidly
updating the product range subject to possible restrictions;
developing alternative sales channels (online, click & collect,
etc.)
О-11 Risks of non-
compliance with the
requirements of the
risk management
and internal control
system
Low / stable Enhancing the design of internal controls to improve
productivity; automating controls; reviewing and establishing
workable standards for controls
О-14 Asset integrity risk
(stores, distribution
centres, offices)
Medium /
stable
Entering into scheduled maintenance contracts; taking out
inventory insurance
F-10 Currency risk Medium /
declining
Hedging the currency risk with derivatives; reducing
the number of contracts exposed to currency risks; setting
upper and lower bounds for exchange differences in contracts
with contractors/suppliers
R-15 Fraud
and corruption risk
Medium /
stable
Updating anti-corruption procedure rules and the Regulations
on Tender Procedures; including anti-corruption clauses
in contracts for the purchase of goods or services; conducting
audits to identify potential cases of corruption by Group
employees or suppliers of goods or services
R-04 Risk of changes
in the local
legislation related
to the product
range or pricing
restrictions
High /
growing
Local sourcing; supplier rotation; negotiating engagement
terms
S-16 Sanctions risks High / new
(declining)
Communicating with account managers of partner banks
to ensure uninterrupted and full service delivery; making a list
of business-critical equipment for stores, distribution centres
and offices; building up reserves; tracking balances
O-17 Marketing risks Medium / new
(growing)
Opting for more cost-effective marketing activities;
implementing SMM in-house within payroll costs to showcase
the Company’s product range; balancing the budget
and marketing mix when selecting the method and channel
to communicate with the target audience; establishing
our unique selling proposition (USP) through product/price
combination and through product category image-building
communications
93 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Risks that Materialised in 2022
As the impact of the COVID-19 pandemic on supply chains and consumer mobility was gradually fading, a new significant risk factor emerged: geopolitical tensions, resulting in sanctions
and the transformation of Russia’s economy. In 2022, key functions were affected by a number of risk events due to external factors.
Event Response measures
Assortment management
Many manufacturers of consumer goods leaving the Russian market or reducing the available product range Searching for substitute products or alternative suppliers
Continued zero-COVID policy in China, international (primarily maritime) transport operators announcing
the suspension of operations in Russia in March
Giving suppliers longer order lead times (earlier booking), searching for new freight forwarders and flexibly
planning performance metrics amid changing costs and the time of delivery to Russia
Many partner banks added to various financial sanctions lists, hence more complicated transactions under
contracts with foreign suppliers
Opening correspondent accounts with banks in other countries, including branches and subsidiaries in various
jurisdictions, and using alternative currencies for settlement
Adverse impact of the adopted Resolution No. 713 of the Council of Ministers of the Republic of Belarus
On the Price Regulation System, dated 19 October 2022
Developing and introducing new price points, promptly replenishing stocks at distribution centres and only
affording shelf space to targeted SKUs
Supply chain
International container lines suspending operations in Russia and with Russian customers Identifying contract opportunities and signing contracts with alternative operators
Overloaded seaports in China and low throughput capacity at Russia’s active seaports Leveraging multimodal transportation; flexibly combining multiple modes of transport: by sea, rail and road;
early demand planning; and enabling just-in-time delivery
Significant increase in standard container shipping costs Regularly meeting and negotiating with suppliers
Limited labour availability for transportation (drivers) and warehousing due to seasonality and other factors Reviewing employment terms and expanding the list of recruitment channels
Lack of handling equipment that meets certain specifications in the market Limited reliance on used equipment and sourcing from other countries
More complicated procedures for obtaining product permits and certifications Facilitating interactions between the manufacturer, the courier service (in the absence of international service
operators) and certification laboratories
Marketing management
A mismatch in timing between the publication of marketing communications and the actual on-shelf
availability for some SKUs
Shifting the focus of marketing communications from product details to the image
Legal restrictions on using certain communication and promotion channels in Russia Using available communication channels relevant to the target audience
Changes in legislation related to advertising on the internet Adjusting business processes related to drafting and publishing promotional messages and adding provisions
in line with the regulatory requirements
Surging service provider costs Streamlining the marketing and advertising tactics on a regular basis without compromising their effectiveness
94 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
As the impact of the COVID-19 pandemic on supply chains and consumer mobility was gradually fading, a new significant risk factor emerged: geopolitical tensions, resulting in sanctions
and the transformation of Russia’s economy. In 2022, key functions were affected by a number of risk events due to external factors.
Event Response measures
Assortment management
Many manufacturers of consumer goods leaving the Russian market or reducing the available product range Searching for substitute products or alternative suppliers
Continued zero-COVID policy in China, international (primarily maritime) transport operators announcing
the suspension of operations in Russia in March
Giving suppliers longer order lead times (earlier booking), searching for new freight forwarders and flexibly
planning performance metrics amid changing costs and the time of delivery to Russia
Many partner banks added to various financial sanctions lists, hence more complicated transactions under
contracts with foreign suppliers
Opening correspondent accounts with banks in other countries, including branches and subsidiaries in various
jurisdictions, and using alternative currencies for settlement
Adverse impact of the adopted Resolution No. 713 of the Council of Ministers of the Republic of Belarus
On the Price Regulation System, dated 19 October 2022
Developing and introducing new price points, promptly replenishing stocks at distribution centres and only
affording shelf space to targeted SKUs
Supply chain
International container lines suspending operations in Russia and with Russian customers Identifying contract opportunities and signing contracts with alternative operators
Overloaded seaports in China and low throughput capacity at Russia’s active seaports Leveraging multimodal transportation; flexibly combining multiple modes of transport: by sea, rail and road;
early demand planning; and enabling just-in-time delivery
Significant increase in standard container shipping costs Regularly meeting and negotiating with suppliers
Limited labour availability for transportation (drivers) and warehousing due to seasonality and other factors Reviewing employment terms and expanding the list of recruitment channels
Lack of handling equipment that meets certain specifications in the market Limited reliance on used equipment and sourcing from other countries
More complicated procedures for obtaining product permits and certifications Facilitating interactions between the manufacturer, the courier service (in the absence of international service
operators) and certification laboratories
Marketing management
A mismatch in timing between the publication of marketing communications and the actual on-shelf
availability for some SKUs
Shifting the focus of marketing communications from product details to the image
Legal restrictions on using certain communication and promotion channels in Russia Using available communication channels relevant to the target audience
Changes in legislation related to advertising on the internet Adjusting business processes related to drafting and publishing promotional messages and adding provisions
in line with the regulatory requirements
Surging service provider costs Streamlining the marketing and advertising tactics on a regular basis without compromising their effectiveness
94 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
1
Global Reporting Initiative
2 Sustainability Accounting Standards Board
Sustainability Risks
In November 2021, the Board of Directors of Fix Price set
up a Sustainability Committee. The first sustainability report
prepared in accordance with GRI 1 and SASB 2 standards was
published in summer 2022.
At present, the Company does not perform separate ESG risk
assessments, but the current registry contains the following
sustainability-related risk areas:
• personnel management;
• employee training and development;
• occupational safety;
• product quality;
• compliance;
• internal controls;
• information security;
• anti-corruption efforts.
As climate change becomes an increasingly urgent issue,
this year we publish our first disclosure on the Company’s
climate impact guided by TCFD recommendations. For more
details, see the dedicated section on page 79 . Fix Price plans
to identify climate risks and add them into the risk register
and the risk map in future reporting periods.
Ethics
and Anticorruption
Fix Price Group PLC is committed to conducting business
in an ethical manner. The Company has an Anti-Bribery
and Corruption Policy that provides a set of principles,
procedures and specific measures aimed at preventing
and eradicating corrupt practices, minimising the causes
and conditions that generate corruption and forming
anti-corruption mindsets among the Group’s employees
with respect to any manifestation of unfair behaviour.
In order to combat corruption, the Group performs
the following activities:
• safeguarding against corruption, including by identifying
and subsequently eliminating causes of corruption,
and training Group employees;
• detecting, preventing and impending corruption-related
offences, and exposing and investigating these offences
in accordance with the Company’s policy and other
regulations;
• minimising and/or eliminating of the consequences
of corruption-related offences for the Group.
The Company’s CEO is responsible for the implementation
of anticorruption measures.
The Company conducts anti-corruption webinars
for employees and provides access to anti-corruption video
resources.
All employees agree to abide by the Group’s Anti-
Corruption Policy and anti-corruption agreements
are signed by Group suppliers, contractors and partners.
Complaints on ethical issues, conflicts of interest, suspected corruption and other suspicious activities
can be emailed to Fix Price’s Ethics Committee: kommitet_po_etike@fix-price.ru
95 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
2 Sustainability Accounting Standards Board
Sustainability Risks
In November 2021, the Board of Directors of Fix Price set
up a Sustainability Committee. The first sustainability report
prepared in accordance with GRI 1 and SASB 2 standards was
published in summer 2022.
At present, the Company does not perform separate ESG risk
assessments, but the current registry contains the following
sustainability-related risk areas:
• personnel management;
• employee training and development;
• occupational safety;
• product quality;
• compliance;
• internal controls;
• information security;
• anti-corruption efforts.
As climate change becomes an increasingly urgent issue,
this year we publish our first disclosure on the Company’s
climate impact guided by TCFD recommendations. For more
details, see the dedicated section on page 79 . Fix Price plans
to identify climate risks and add them into the risk register
and the risk map in future reporting periods.
Ethics
and Anticorruption
Fix Price Group PLC is committed to conducting business
in an ethical manner. The Company has an Anti-Bribery
and Corruption Policy that provides a set of principles,
procedures and specific measures aimed at preventing
and eradicating corrupt practices, minimising the causes
and conditions that generate corruption and forming
anti-corruption mindsets among the Group’s employees
with respect to any manifestation of unfair behaviour.
In order to combat corruption, the Group performs
the following activities:
• safeguarding against corruption, including by identifying
and subsequently eliminating causes of corruption,
and training Group employees;
• detecting, preventing and impending corruption-related
offences, and exposing and investigating these offences
in accordance with the Company’s policy and other
regulations;
• minimising and/or eliminating of the consequences
of corruption-related offences for the Group.
The Company’s CEO is responsible for the implementation
of anticorruption measures.
The Company conducts anti-corruption webinars
for employees and provides access to anti-corruption video
resources.
All employees agree to abide by the Group’s Anti-
Corruption Policy and anti-corruption agreements
are signed by Group suppliers, contractors and partners.
Complaints on ethical issues, conflicts of interest, suspected corruption and other suspicious activities
can be emailed to Fix Price’s Ethics Committee: kommitet_po_etike@fix-price.ru
95 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Information Disclosure
The following documents are published on the official
website of the Company:
• Memorandum and Articles of Association
of Fix Price Group PLC;
• internal policies;
• other required information.
In 2021, the Company launched its corporate website which
provides a regularly updated investor calendar, a press
releases page, dividend history, key performance indicators,
contact details and other useful information.
Fix Price continued to develop its compliance function
in 2022. We improved access to the anti-corruption hotline,
so all stakeholders can easily use it via the corporate website.
In addition, the Company discloses information
on the LSE Company’s page
and via the Interfax disclosure server
Results Of The Year
Ethics and corruption hotline: fix-price.com
In 2022, we surveyed 11.5 thous. employees on ethics
and compliance issues. During the survey, we reminded them
that there are channels available for submitting complaints
and that we continue to abide by the current Business Ethics
Policy. The survey results revealed opportunities for further
improvement.
In 2022, we launched a mandatory training programme
for office employees, which included modules on anti-
corruption and business ethics.
The Company updated its Business Ethics Policy (Code
of Conduct) to fully align it with our mission, values and
principles of doing business.
We conducted a course “Rules of Business Conduct” for store
employees on the FP School platform, where we elaborated
on ethical business communication with customers
and colleagues.
In 2022, the number of complaints about corruption increased
due to expanded coverage of the Ethics and Compliance
Committee activities and due to the set up of the hotline.
The number of complaints grew from the side of employees,
contractors and customers.
The geography of complaints also expanded among
the Russian Federation regions, in Belarus and Kazakhstan.
We investigate all complaints, and if violations are confirmed,
we enforce disciplinary measures against those persons who
were found at fault. To prevent similar incidents in the future,
we fine-tune internal control processes and update the rules
and procedures.
WE SURVEYED
~11,500
EMPLOYEES
ON ETHICS
AND COMPLIANCE
ISSUES IN 2022
96 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
The following documents are published on the official
website of the Company:
• Memorandum and Articles of Association
of Fix Price Group PLC;
• internal policies;
• other required information.
In 2021, the Company launched its corporate website which
provides a regularly updated investor calendar, a press
releases page, dividend history, key performance indicators,
contact details and other useful information.
Fix Price continued to develop its compliance function
in 2022. We improved access to the anti-corruption hotline,
so all stakeholders can easily use it via the corporate website.
In addition, the Company discloses information
on the LSE Company’s page
and via the Interfax disclosure server
Results Of The Year
Ethics and corruption hotline: fix-price.com
In 2022, we surveyed 11.5 thous. employees on ethics
and compliance issues. During the survey, we reminded them
that there are channels available for submitting complaints
and that we continue to abide by the current Business Ethics
Policy. The survey results revealed opportunities for further
improvement.
In 2022, we launched a mandatory training programme
for office employees, which included modules on anti-
corruption and business ethics.
The Company updated its Business Ethics Policy (Code
of Conduct) to fully align it with our mission, values and
principles of doing business.
We conducted a course “Rules of Business Conduct” for store
employees on the FP School platform, where we elaborated
on ethical business communication with customers
and colleagues.
In 2022, the number of complaints about corruption increased
due to expanded coverage of the Ethics and Compliance
Committee activities and due to the set up of the hotline.
The number of complaints grew from the side of employees,
contractors and customers.
The geography of complaints also expanded among
the Russian Federation regions, in Belarus and Kazakhstan.
We investigate all complaints, and if violations are confirmed,
we enforce disciplinary measures against those persons who
were found at fault. To prevent similar incidents in the future,
we fine-tune internal control processes and update the rules
and procedures.
WE SURVEYED
~11,500
EMPLOYEES
ON ETHICS
AND COMPLIANCE
ISSUES IN 2022
96 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Shareholder and Investor Engagement
Shareholder Capital
Following the successful IPO of Fix Price, its Global
Depositary Receipts (“GDRs”) were introduced to the London
Stock Exchange and the Moscow Exchange (ticker: FIXP)
on 10 March 2021. Each GDR corresponds to one ordinary
share. The Company’s share capital currently comprises
850,000,000 ordinary shares.
Shareholding structure as at the end of 2022, %
There were no significant changes in the shareholding
structure in 2022.
Investor Interaction
Fix Price is committed to ensuring high level of
information transparency. This means we are open, honest
and straightforward with information about our Company
and our activities. We work hard to earn and maintain trust
with our stakeholders.
This reporting year proved to be a challenging time in almost
every sector. But despite dramatic and rapid changes,
we continued to follow our usual disclosure approach in line
with the best practices. We continued to publish quarterly
reports, as well as financial and operational results, and
maintain an open dialogue with investors and market
participants.
Fix Price strives to attract new and retain existing investors.
We always stay in touch with our investors through a variety
of channels, including public materials, mailings, conference
calls and personal engagement, as well as other online and
offline opportunities.
Dividends
On 16 September 2022, the Board of Directors temporarily
suspended the Group’s Dividend Policy. The Company
stresses its commitment to paying dividends once
the situation stabilises. We will provide an update
to the market on future dividend pay-outs in due course.
Investor Calendar
2022
24 January Q4 and FY 2021 Operating
results Virtual
28 February FY 2021 Financial results Virtual
27 April Q1 2022 Operating Results Virtual
27 July Q2 and H1 2022 Operating
Results Virtual
19 September Q2 and H1 2022 Financial
Results Virtual
27 October Q3 and 9M 2022 Operating
and Financial Results Virtual
2023
26 January Q4 and FY 2022 Operating
results Virtual
27 February FY 2022 Financial results Virtual
27 April Q1 2023 Operating
and Financial Results Virtual
71.2
26.9
1.8
Free-float
Management
Treasury shares
0.1
Entities, controlled
by the founders
97 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Shareholder Capital
Following the successful IPO of Fix Price, its Global
Depositary Receipts (“GDRs”) were introduced to the London
Stock Exchange and the Moscow Exchange (ticker: FIXP)
on 10 March 2021. Each GDR corresponds to one ordinary
share. The Company’s share capital currently comprises
850,000,000 ordinary shares.
Shareholding structure as at the end of 2022, %
There were no significant changes in the shareholding
structure in 2022.
Investor Interaction
Fix Price is committed to ensuring high level of
information transparency. This means we are open, honest
and straightforward with information about our Company
and our activities. We work hard to earn and maintain trust
with our stakeholders.
This reporting year proved to be a challenging time in almost
every sector. But despite dramatic and rapid changes,
we continued to follow our usual disclosure approach in line
with the best practices. We continued to publish quarterly
reports, as well as financial and operational results, and
maintain an open dialogue with investors and market
participants.
Fix Price strives to attract new and retain existing investors.
We always stay in touch with our investors through a variety
of channels, including public materials, mailings, conference
calls and personal engagement, as well as other online and
offline opportunities.
Dividends
On 16 September 2022, the Board of Directors temporarily
suspended the Group’s Dividend Policy. The Company
stresses its commitment to paying dividends once
the situation stabilises. We will provide an update
to the market on future dividend pay-outs in due course.
Investor Calendar
2022
24 January Q4 and FY 2021 Operating
results Virtual
28 February FY 2021 Financial results Virtual
27 April Q1 2022 Operating Results Virtual
27 July Q2 and H1 2022 Operating
Results Virtual
19 September Q2 and H1 2022 Financial
Results Virtual
27 October Q3 and 9M 2022 Operating
and Financial Results Virtual
2023
26 January Q4 and FY 2022 Operating
results Virtual
27 February FY 2022 Financial results Virtual
27 April Q1 2023 Operating
and Financial Results Virtual
71.2
26.9
1.8
Free-float
Management
Treasury shares
0.1
Entities, controlled
by the founders
97 About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
APPENDICES
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
Statement of management’s responsibilities
for the preparation and approval of the consolidated financial
statements for the year ended 31 December 2022
Management is responsible for the preparation
of the consolidated financial statements
of Fix Price Group PLC (hereinafter, the “Company”)
and its subsidiaries (hereinafter, the “Group”) that present
fairly the consolidated financial position of the Group
as at 31 December 2022 and the consolidated results
of its operations, cash flows and changes in equity
for the year then ended, in compliance with International
Financial Reporting Standards (hereinafter, “IFRS”) as issued
by the International Accounting Standards Board (“IASB”).
In preparing the consolidated financial
statements, management is responsible for:
• Properly selecting and applying accounting policies;
• Presenting information, including accounting
policies, in a manner that provides relevant, reliable,
comparable and understandable information;
Dmitry Kirsanov
Chief Executive Officer
Anton Makhnev
Chief Financial Officer
• Providing additional disclosures when compliance
with the specific requirements in IFRS
are insufficient to enable users to understand
the impact of particular transactions, other events
and conditions on the Group’s consolidated financial
position and financial performance; and
• Making an assessment of the Group’s ability
to continue as a going concern.
Management is also responsible for:
• Designing, implementing and maintaining
an effective and sound system of internal
controls throughout the Group;
• Maintaining adequate accounting records that
are sufficient to show and explain the Group’s transactions
and disclose with reasonable accuracy at any time
the consolidated financial position of the Group,
and which enable them to ensure that the consolidated
financial statements of the Group comply with IFRS;
• Maintaining statutory accounting records in compliance
with local legislation and accounting standards
of jurisdictions in which the Group operates;
• Taking such steps as are reasonably available to them
to safeguard the assets of the Group; and
• Detecting and preventing fraud and other irregularities.
The consolidated financial statements of the Group
for the year ended 31 December 2022 were approved
by management of the Company on behalf of the Board
of Directors of the Company on 24 February 2023.
On behalf of management: About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
99
for the preparation and approval of the consolidated financial
statements for the year ended 31 December 2022
Management is responsible for the preparation
of the consolidated financial statements
of Fix Price Group PLC (hereinafter, the “Company”)
and its subsidiaries (hereinafter, the “Group”) that present
fairly the consolidated financial position of the Group
as at 31 December 2022 and the consolidated results
of its operations, cash flows and changes in equity
for the year then ended, in compliance with International
Financial Reporting Standards (hereinafter, “IFRS”) as issued
by the International Accounting Standards Board (“IASB”).
In preparing the consolidated financial
statements, management is responsible for:
• Properly selecting and applying accounting policies;
• Presenting information, including accounting
policies, in a manner that provides relevant, reliable,
comparable and understandable information;
Dmitry Kirsanov
Chief Executive Officer
Anton Makhnev
Chief Financial Officer
• Providing additional disclosures when compliance
with the specific requirements in IFRS
are insufficient to enable users to understand
the impact of particular transactions, other events
and conditions on the Group’s consolidated financial
position and financial performance; and
• Making an assessment of the Group’s ability
to continue as a going concern.
Management is also responsible for:
• Designing, implementing and maintaining
an effective and sound system of internal
controls throughout the Group;
• Maintaining adequate accounting records that
are sufficient to show and explain the Group’s transactions
and disclose with reasonable accuracy at any time
the consolidated financial position of the Group,
and which enable them to ensure that the consolidated
financial statements of the Group comply with IFRS;
• Maintaining statutory accounting records in compliance
with local legislation and accounting standards
of jurisdictions in which the Group operates;
• Taking such steps as are reasonably available to them
to safeguard the assets of the Group; and
• Detecting and preventing fraud and other irregularities.
The consolidated financial statements of the Group
for the year ended 31 December 2022 were approved
by management of the Company on behalf of the Board
of Directors of the Company on 24 February 2023.
On behalf of management: About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
99
Independent auditor’s report
To the Shareholders of Fix Price Group PLC:
Opinion
We have audited the consolidated financial statements
of Fix Price Group PLC (hereinafter, the “Company”) and its
subsidiaries (hereinafter, the “Group”), which comprise
the consolidated statement of comprehensive income
for the year ended 31 December 2022, consolidated
statement of financial position as at 31 December 2022,
consolidated statement of cash flows and consolidated
statement of changes in equity for the year then ended,
and notes to the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial
statements present fairly, in all material respects,
the consolidated financial position of the Group as at 31
December 2022, and its consolidated financial performance
and its consolidated cash flows for the year then ended
in accordance with International Financial Reporting
Standards (“IFRSs”) as issued by the International
Accounting Standards Board (thereafter “IASB”).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (“ISAs”). Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent
of the Group in accordance with the Auditor’s Independence
Rules and the Auditor’s Professional Ethics Code, that are
relevant to our audit of the financial statements in the Russian
Federation together with the ethical requirements
of the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants (the “IESBA
Code”), and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit
of the consolidated financial statements of the current
period. These matters were addressed in the context
of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
100
To the Shareholders of Fix Price Group PLC:
Opinion
We have audited the consolidated financial statements
of Fix Price Group PLC (hereinafter, the “Company”) and its
subsidiaries (hereinafter, the “Group”), which comprise
the consolidated statement of comprehensive income
for the year ended 31 December 2022, consolidated
statement of financial position as at 31 December 2022,
consolidated statement of cash flows and consolidated
statement of changes in equity for the year then ended,
and notes to the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial
statements present fairly, in all material respects,
the consolidated financial position of the Group as at 31
December 2022, and its consolidated financial performance
and its consolidated cash flows for the year then ended
in accordance with International Financial Reporting
Standards (“IFRSs”) as issued by the International
Accounting Standards Board (thereafter “IASB”).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (“ISAs”). Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent
of the Group in accordance with the Auditor’s Independence
Rules and the Auditor’s Professional Ethics Code, that are
relevant to our audit of the financial statements in the Russian
Federation together with the ethical requirements
of the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants (the “IESBA
Code”), and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit
of the consolidated financial statements of the current
period. These matters were addressed in the context
of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
100
Why the matter was determined to be a key audit matter
How the matter was addressed in the audit
Existence and completeness of inventories
As at 31 December 2022 and 2021 the inventories held by the Group comprise RUB 41,020 million
and RUB 40,566 million, respectively. The Group’s inventories consist of merchandise purchased and held
for resale and are carried at the lower of cost and net realisable value.
Existence and completeness of inventories were determined to be a key audit matter due to the magnitude
of the inventories’ balance, the high number of locations and sites where inventories are held at, variability of title
transfer terms in purchase agreements, and estimates, such as shrinkage allowance, made by management
in determining the carrying amount of inventories at reporting date.
The Group’s significant accounting policies are disclosed in Note 2, the key assumptions related to inventory
measurement are disclosed in Note 3, the inventories are disclosed in Note 14 and write-offs of merchandise
inventories relating to shrinkage and write-down to net realisable value are disclosed in Note 6.
Our audit procedures related to Existence and completeness of inventories included the following, among others:
• Obtaining an understanding, evaluating design and implementation and, where deemed appropriate, testing
the operating effectiveness of relevant controls relating to the inventory process including controls over
the Group’s inventory stock count procedure;
• Observing the inventory count process for a sample of stores and distribution centers during the year
and performing independent test counts for a sample of stock keeping units;
• Vouching inventory movements between stock count dates and reporting period end to supporting
documents for a sample of stock-keeping units;
• Challenging appropriateness of management’s estimate of shrinkage allowance, including developing
an independent estimate and assessing historical accuracy of management’s estimates;
• For inventories purchased close to year-end which are still on their way to the Group’s warehouses (“goods
in transit”) verifying that it was appropriate to recognise inventories at the reporting date and testing
completeness of inventory purchases booked close to year-end.
Uncertain tax treatments
As at 31 December 2022 and 2021 the Group’s balance of income tax payable comprised RUB 6,005 million
and RUB 5,087 million, respectively. The Group files income tax returns in several jurisdictions and is periodically
subject to tax audits in the ordinary course of business. Applicable tax laws and regulations in those jurisdictions,
including Russia where the Group’s main operating subsidiary is based off, are subject to differing interpretations
and the resolution of a final tax position can take several years.
The key audit matter is focused on the valuation and completeness of the income tax liabilities associated
with uncertain tax treatment and completeness and accuracy of the Group’s disclosure of tax-related contingent
liabilities. A significant degree of judgement is applied by management when assessing the Group’s tax
positions given the inherent uncertainty.
The Group’s income taxes are disclosed in Note 9 on and the Group’s contingent liabilities with regards
to taxation are disclosed in Note 23.
Our audit procedures related to uncertain tax treatments included the following, among others:
• Obtaining an understanding of the Group’s internal processes and controls in respect of management’s
assessment of income tax liabilities and contingent liabilities related to tax matters;
• In cooperation with our internal tax specialists, evaluating the tax positions taken by the Group’s management
and testing the valuation and completeness of uncertain tax liabilities, including an examination of available
documents on tax audits, analysis of tax legislation, recent court practice and other evidence;
• Testing the valuation of income tax provisions and accuracy of underlying schedules used to compute
the income tax liability and tax-related contingent liabilities, including, where deemed relevant, developing
an independent estimate;
• Checking the adequacy of the disclosures in the consolidated financial statements with the requirements
of accounting standards in respect of uncertain tax positions, income tax liabilities, contingent liabilities
and underlying key judgments and estimates. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
101
Existence and completeness of inventories
As at 31 December 2022 and 2021 the inventories held by the Group comprise RUB 41,020 million
and RUB 40,566 million, respectively. The Group’s inventories consist of merchandise purchased and held
for resale and are carried at the lower of cost and net realisable value.
Existence and completeness of inventories were determined to be a key audit matter due to the magnitude
of the inventories’ balance, the high number of locations and sites where inventories are held at, variability of title
transfer terms in purchase agreements, and estimates, such as shrinkage allowance, made by management
in determining the carrying amount of inventories at reporting date.
The Group’s significant accounting policies are disclosed in Note 2, the key assumptions related to inventory
measurement are disclosed in Note 3, the inventories are disclosed in Note 14 and write-offs of merchandise
inventories relating to shrinkage and write-down to net realisable value are disclosed in Note 6.
Our audit procedures related to Existence and completeness of inventories included the following, among others:
• Obtaining an understanding, evaluating design and implementation and, where deemed appropriate, testing
the operating effectiveness of relevant controls relating to the inventory process including controls over
the Group’s inventory stock count procedure;
• Observing the inventory count process for a sample of stores and distribution centers during the year
and performing independent test counts for a sample of stock keeping units;
• Vouching inventory movements between stock count dates and reporting period end to supporting
documents for a sample of stock-keeping units;
• Challenging appropriateness of management’s estimate of shrinkage allowance, including developing
an independent estimate and assessing historical accuracy of management’s estimates;
• For inventories purchased close to year-end which are still on their way to the Group’s warehouses (“goods
in transit”) verifying that it was appropriate to recognise inventories at the reporting date and testing
completeness of inventory purchases booked close to year-end.
Uncertain tax treatments
As at 31 December 2022 and 2021 the Group’s balance of income tax payable comprised RUB 6,005 million
and RUB 5,087 million, respectively. The Group files income tax returns in several jurisdictions and is periodically
subject to tax audits in the ordinary course of business. Applicable tax laws and regulations in those jurisdictions,
including Russia where the Group’s main operating subsidiary is based off, are subject to differing interpretations
and the resolution of a final tax position can take several years.
The key audit matter is focused on the valuation and completeness of the income tax liabilities associated
with uncertain tax treatment and completeness and accuracy of the Group’s disclosure of tax-related contingent
liabilities. A significant degree of judgement is applied by management when assessing the Group’s tax
positions given the inherent uncertainty.
The Group’s income taxes are disclosed in Note 9 on and the Group’s contingent liabilities with regards
to taxation are disclosed in Note 23.
Our audit procedures related to uncertain tax treatments included the following, among others:
• Obtaining an understanding of the Group’s internal processes and controls in respect of management’s
assessment of income tax liabilities and contingent liabilities related to tax matters;
• In cooperation with our internal tax specialists, evaluating the tax positions taken by the Group’s management
and testing the valuation and completeness of uncertain tax liabilities, including an examination of available
documents on tax audits, analysis of tax legislation, recent court practice and other evidence;
• Testing the valuation of income tax provisions and accuracy of underlying schedules used to compute
the income tax liability and tax-related contingent liabilities, including, where deemed relevant, developing
an independent estimate;
• Checking the adequacy of the disclosures in the consolidated financial statements with the requirements
of accounting standards in respect of uncertain tax positions, income tax liabilities, contingent liabilities
and underlying key judgments and estimates. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
101
Other Information
Management is responsible for the other information.
The other information comprises the information
included in the Annual report, but does not include
the consolidated financial statements and our auditor’s
report thereon. The Annual report is expected to be made
available to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements
does not cover the other information and we will not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information
presented by the Annual report when they become available
and, in doing so, consider whether the other information
is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated.
When we read the Annual report, if we conclude
that there is a material misstatement therein,
we are required to communicate the matter
to those charged with governance.
Responsibilities
of Management and Those
Charged with Governance
for the Consolidated
Financial Statements
Management is responsible for the preparation
and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such
internal control as management determines is
necessary to enable the preparation of consolidated
financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements,
management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless management
either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible
for overseeing the Group’s financial reporting process. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
102
Management is responsible for the other information.
The other information comprises the information
included in the Annual report, but does not include
the consolidated financial statements and our auditor’s
report thereon. The Annual report is expected to be made
available to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements
does not cover the other information and we will not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information
presented by the Annual report when they become available
and, in doing so, consider whether the other information
is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated.
When we read the Annual report, if we conclude
that there is a material misstatement therein,
we are required to communicate the matter
to those charged with governance.
Responsibilities
of Management and Those
Charged with Governance
for the Consolidated
Financial Statements
Management is responsible for the preparation
and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such
internal control as management determines is
necessary to enable the preparation of consolidated
financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements,
management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless management
either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible
for overseeing the Group’s financial reporting process. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
102
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a
whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a
material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the consolidated financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances, but
not for the purpose of expressing an opinion
on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the consolidated financial statements, including
the disclosures, and whether the consolidated financial
statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance
with a statement that we have complied with relevant
ethical requirements regarding independence, and
Vladimir Biryukov
(ORNZ No. 21906100113),
Engagement partner,
Acting based on the power of attorney issued by the General
Director on 6 July 2022 authorising to sign off the audit report
on behalf of AO “Business Solutions and Technologies”
(ORNZ No. 12006020384)
24 February 2023
to communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the consolidated financial
statements of the current period, and are therefore the key
audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences
of doing so would reasonably be expected to outweigh
the public interest benefits of such communication. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
103
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a
whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a
material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the consolidated financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances, but
not for the purpose of expressing an opinion
on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the consolidated financial statements, including
the disclosures, and whether the consolidated financial
statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance
with a statement that we have complied with relevant
ethical requirements regarding independence, and
Vladimir Biryukov
(ORNZ No. 21906100113),
Engagement partner,
Acting based on the power of attorney issued by the General
Director on 6 July 2022 authorising to sign off the audit report
on behalf of AO “Business Solutions and Technologies”
(ORNZ No. 12006020384)
24 February 2023
to communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the consolidated financial
statements of the current period, and are therefore the key
audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences
of doing so would reasonably be expected to outweigh
the public interest benefits of such communication. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
103
Consolidated Financial Statements
Consolidated statement of comprehensive income for the year ended 31 December 2022
(in millions of Russian Rubles, except earnings per share)
Notes 2022 2021
Revenue 5277,644
230,473
Cost of sales 6 (185,650 )
(157,073 )
Gross profit91,994
73,400
Selling, general and administrative expenses 7 (52,287 )
(41,991 )
Other operating income1,295
873
Share of profit of associates58
44
Operating profit41,060
32,326
Interest income328
131
Interest expense (3,329 )
(1,778 )
Foreign exchange loss, net (234 )
(83 )
Profit before tax37,825
30,596
Income tax expense 9 (16,414 )
(9,207 )
Profit for the year21,411
21,389
Notes 2022 2021
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Currency translation differences84
(13 )
Other comprehensive income/(loss) for the year84
(13 )
Total comprehensive income for the year21,495
21,376
Earnings per share
Weighted average number of ordinary shares outstanding 17849,581,739
850,000,000
Earnings per share, basic and diluted (in Russian Rubles per
share)25.20
25.20
The accompanying notes on pages 108-145 form an integral part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
104
Consolidated statement of comprehensive income for the year ended 31 December 2022
(in millions of Russian Rubles, except earnings per share)
Notes 2022 2021
Revenue 5
Cost of sales 6 (
Gross profit
Selling, general and administrative expenses 7 (
Other operating income
Share of profit of associates
Operating profit
Interest income
Interest expense (
Foreign exchange loss, net (
Profit before tax
Income tax expense 9 (
Profit for the year
Notes 2022 2021
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Currency translation differences
Other comprehensive income/(loss) for the year
Total comprehensive income for the year
Earnings per share
Weighted average number of ordinary shares outstanding 17
Earnings per share, basic and diluted (in Russian Rubles per
share)
The accompanying notes on pages 108-145 form an integral part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
104
Note
31 December 2022
31 December 2021
Assets
Non-current assets
Property, plant and equipment 1019,692
18,142
Goodwill179
198
Intangible assets 111,721
1,221
Capital advances 127,272
549
Right-of-use assets 1311,598
9,636
Investments in associates70
58
Total non-current assets40,532
29,804
Current assets
Inventories 1441,020
40,566
Right-of-use assets 131,790
1,718
Receivables and other current assets 152,531
1,843
Prepayments2,093
1,801
Value added tax receivable1,476
418
Cash and cash equivalents 1623,584
8,779
Total current assets72,494
55,125
Total assets113,026
84,929
Consolidated statement of financial position as at 31 December 2022
(in millions of Russian Rubles)
Note 31 December 2022 31 December 2021
Equity and liabilities
Equity
Share capital 171
1
Additional paid-in capital 17154
154
Retained earnings 1729,241
7,830
Treasury shares 17 (207 )
-
Currency translation reserve 1778
(6 )
Total equity29,267
7,979
Non-current liabilities
Loans and borrowings 194,352
-
Lease liabilities 204,615
3,765
Deferred tax liabilities 9421
533
Total non-current liabilities9,388
4,298
Current liabilities
Loans and borrowings 1917,576
21,523
Lease liabilities 207,997
6,971
Payables and other financial liabilities 2134,476
34,463
Advances received792
601
Income tax payable 96,005
5,087
Tax liabilities, other than income taxes5,523
2,372
Accrued expenses 222,002
1,635
Total current liabilities74,371
72,652
Total liabilities83,759
76,950
Total equity and liabilities113,026
84,929
The accompanying notes on pages 108-145 form an integral
part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
105
Assets
Non-current assets
Property, plant and equipment 10
Goodwill
Intangible assets 11
Capital advances 12
Right-of-use assets 13
Investments in associates
Total non-current assets
Current assets
Inventories 14
Right-of-use assets 13
Receivables and other current assets 15
Prepayments
Value added tax receivable
Cash and cash equivalents 16
Total current assets
Total assets
Consolidated statement of financial position as at 31 December 2022
(in millions of Russian Rubles)
Note 31 December 2022 31 December 2021
Equity and liabilities
Equity
Share capital 17
Additional paid-in capital 17
Retained earnings 17
Treasury shares 17 (
Currency translation reserve 17
Total equity
Non-current liabilities
Loans and borrowings 19
Lease liabilities 20
Deferred tax liabilities 9
Total non-current liabilities
Current liabilities
Loans and borrowings 19
Lease liabilities 20
Payables and other financial liabilities 21
Advances received
Income tax payable 9
Tax liabilities, other than income taxes
Accrued expenses 22
Total current liabilities
Total liabilities
Total equity and liabilities
The accompanying notes on pages 108-145 form an integral
part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
105
*
Non-cash transactions are disclosed in Note 17.
Consolidated statement of cash flows for the year ended 31 December 2022
(in millions of Russian Rubles)
Note 2022 2021
Cash flows from operating activities
Profit before tax37,825
30,596
Adjustments for:
Depreciation and amortisation 10,11,1313,138
11,829
Write-offs of merchandise inventories relating to shrinkage
and write-down to net realisable value 6,142,730
2,036
Change in allowance for expected credit losses19
8
Share of profit of associates (58 )
(44 )
Interest income (328 )
(131 )
Interest expense3,329
1,778
Foreign exchange loss, net234
83
Operating cash flows before changes in working capital56,889
46,155
Increase in inventories (3,363 )
(15,624 )
Increase in receivables and other financial assets (747 )
(978 )
Increase in prepayments (287 )
(1,499 )
(Increase)/Decrease in VAT receivable (1,058 )
97
Increase in payables and other financial liabilities12
7,518
Increase in advances received190
20
Increase in tax liabilities, other than income tax3,158
302
Increase in accrued expenses407
518
Net cash flows generated from operations55,201
36,509
Note 2022 2021
Interest paid (3,154 )
(1,907 )
Interest received302
131
Income tax paid (15,567 )
(9,396 )
Net cash flows from operating activities36,782
25,337
Cash flows from investing activities
Purchase of property, plant and equipment (11,210 )
(5,706 )
Purchase of intangible assets (805 )
(573 )
Proceeds from sale of property, plant and equipment90
60
Dividends received from associates45
60
Net cash flows used in investing activities (11,880 )
(6,159 )
Cash flows from financing activities
Proceeds from loans and borrowings 1930,260
25,500
Repayment of loans and borrowings 19 (30,150 )
(19,686 )
Lease payments (9,903 )
(9,197 )
Acquisition of treasury shares (207 )
-
Dividends paid *-
(33,446 )
Net cash flows used in financing activities (10,000 )
(36,829 )
Total cash from/(used in) operating, investing and financing activities14,902
(17,651 )
Effect of exchange rate fluctuations on cash and cash equivalents (97 )
55
Net increase/(decrease) in cash and cash equivalents14,805
(17,596 )
Cash and cash equivalents at the beginning of the year 168,779
26,375
Cash and cash equivalents at the end of the year 1623,584
8,779
The accompanying notes on pages 108-145 form an integral
part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
106
Non-cash transactions are disclosed in Note 17.
Consolidated statement of cash flows for the year ended 31 December 2022
(in millions of Russian Rubles)
Note 2022 2021
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation and amortisation 10,11,13
Write-offs of merchandise inventories relating to shrinkage
and write-down to net realisable value 6,14
Change in allowance for expected credit losses
Share of profit of associates (
Interest income (
Interest expense
Foreign exchange loss, net
Operating cash flows before changes in working capital
Increase in inventories (
Increase in receivables and other financial assets (
Increase in prepayments (
(Increase)/Decrease in VAT receivable (
Increase in payables and other financial liabilities
Increase in advances received
Increase in tax liabilities, other than income tax
Increase in accrued expenses
Net cash flows generated from operations
Note 2022 2021
Interest paid (
Interest received
Income tax paid (
Net cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment (
Purchase of intangible assets (
Proceeds from sale of property, plant and equipment
Dividends received from associates
Net cash flows used in investing activities (
Cash flows from financing activities
Proceeds from loans and borrowings 19
Repayment of loans and borrowings 19 (
Lease payments (
Acquisition of treasury shares (
Dividends paid *
Net cash flows used in financing activities (
Total cash from/(used in) operating, investing and financing activities
Effect of exchange rate fluctuations on cash and cash equivalents (
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year 16
Cash and cash equivalents at the end of the year 16
The accompanying notes on pages 108-145 form an integral
part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
106
Consolidated statement of changes in equity for the year ended 31 December 2022
(in millions of Russian Rubles)
Note Share
capital
Treasury
shares
Additional
paid-in capital
(Deficit) / Retained
earnings
Currency translation
reserve
Total (deficit)/
equity
At 1 January 20211
-
154
(3,771 )
7
(3,609 )
Profit for the year-
-
-
21,389
-
21,389
Other comprehensive income for the year-
-
-
-
(13 )
(13 )
Total comprehensive income for the year, net of tax-
-
-
21,389
(13 )
21,376
Dividends 17-
-
-
(9,788 )
-
(9,788 )
At 31 December 20211
-
154
7,830
(6 )
7,979
At 1 January 20221
-
154
7,830
(6 )
7,979
Profit for the year-
-
-
21,411
-
21,411
Other comprehensive loss for the year-
-
-
-
84
84
Total comprehensive income for the year, net of tax-
-
-
21,411
84
21,495
Dividends 17-
-
-
(5,800 )
-
(5,800 )
Cancelation of dividends 17-
-
-
5,800
-
5,800
Acquisition of treasury shares 17-
(207 )
-
-
-
(207 )
At 31 December 20221
(207 )
154
29,241
78
29,267
The accompanying notes on pages 108-145 form an integral part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
107
(in millions of Russian Rubles)
Note Share
capital
Treasury
shares
Additional
paid-in capital
(Deficit) / Retained
earnings
Currency translation
reserve
Total (deficit)/
equity
At 1 January 2021
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year, net of tax
Dividends 17
At 31 December 2021
At 1 January 2022
Profit for the year
Other comprehensive loss for the year
Total comprehensive income for the year, net of tax
Dividends 17
Cancelation of dividends 17
Acquisition of treasury shares 17
At 31 December 2022
The accompanying notes on pages 108-145 form an integral part of these consolidated financial statements About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
107
Notes to the consolidated financial statements
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
* About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
141
142
* Other related parties comprise immediate and indirect shareholders of the Company.
143
About the Report
The Annual Report of Fix Price Group PLC for 2022
(hereinafter also referred to as Fix Price, the Company
or the Group) has been prepared based on the information
available to Fix Price Group PLC and its subsidiaries
as of 31 December 2022, unless otherwise implied
by the meaning or content of the information provided. This
Annual Report is addressed to a wide range of stakeholders
and reflects the key performance results of Fix Price
for 2022 in such matters as strategic and corporate
governance as well as financial and operating results.
The Annual Report has been prepared in accordance
with the requirements of the applicable laws.
Disclaimer
This Annual Report contains forward-looking statements
that reflect expectations of the Company’s management.
The forward-looking statements are not based on actual
circumstances and include all statements concerning
the Company’s intentions, opinions, or current expectations
regarding its performance, financial position, liquidity, growth
prospects, strategy, and the industry in which Fix Price
Group PLC operates. By their nature, such forward-looking
statements are characterised by risks and uncertainties
since they relate to events and depend on circumstances
that may or may not occur in the future. Such terms as
“assume”, “believe”, “expect”, “predict”, “intend”, “plan”,
“project”, “consider” and “could” along with other similar
expressions as well as those used in the negative usually
indicate the predictive nature of a statement. These
assumptions contain risks and uncertainties that are
foreseen or not foreseen by the Company. Thus, future
performance may differ from current expectations, therefore
the recipients of the information presented in the Annual
Report should not base their assumptions solely on it.
In addition to official information on the activities
of Fix Price Group PLC, this Annual Report contains
information obtained from third parties and from sources
which Fix Price Group PLC finds to be reliable. However,
the Company does not guarantee the accuracy of this
information, as it may be abridged or incomplete.
Fix Price Group PLC offers no guarantees that the actual
results, scope, or indicators of its performance or the industry
in which the Company operates will correspond to the results,
scope, or performance indicators clearly expressed or implied
in any forward-looking statements contained in this Annual
Report or elsewhere. Fix Price Group PLC is not liable
for any losses that any person may incur due to the fact
that they relied on the forward-looking statements. Except
as expressly envisaged by applicable law, the Company
assumes no obligation to distribute or publish any updates
or changes to the forward-looking statements reflecting
any changes in expectations or new information as well
as subsequent events, conditions, or circumstances. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
144
The Annual Report of Fix Price Group PLC for 2022
(hereinafter also referred to as Fix Price, the Company
or the Group) has been prepared based on the information
available to Fix Price Group PLC and its subsidiaries
as of 31 December 2022, unless otherwise implied
by the meaning or content of the information provided. This
Annual Report is addressed to a wide range of stakeholders
and reflects the key performance results of Fix Price
for 2022 in such matters as strategic and corporate
governance as well as financial and operating results.
The Annual Report has been prepared in accordance
with the requirements of the applicable laws.
Disclaimer
This Annual Report contains forward-looking statements
that reflect expectations of the Company’s management.
The forward-looking statements are not based on actual
circumstances and include all statements concerning
the Company’s intentions, opinions, or current expectations
regarding its performance, financial position, liquidity, growth
prospects, strategy, and the industry in which Fix Price
Group PLC operates. By their nature, such forward-looking
statements are characterised by risks and uncertainties
since they relate to events and depend on circumstances
that may or may not occur in the future. Such terms as
“assume”, “believe”, “expect”, “predict”, “intend”, “plan”,
“project”, “consider” and “could” along with other similar
expressions as well as those used in the negative usually
indicate the predictive nature of a statement. These
assumptions contain risks and uncertainties that are
foreseen or not foreseen by the Company. Thus, future
performance may differ from current expectations, therefore
the recipients of the information presented in the Annual
Report should not base their assumptions solely on it.
In addition to official information on the activities
of Fix Price Group PLC, this Annual Report contains
information obtained from third parties and from sources
which Fix Price Group PLC finds to be reliable. However,
the Company does not guarantee the accuracy of this
information, as it may be abridged or incomplete.
Fix Price Group PLC offers no guarantees that the actual
results, scope, or indicators of its performance or the industry
in which the Company operates will correspond to the results,
scope, or performance indicators clearly expressed or implied
in any forward-looking statements contained in this Annual
Report or elsewhere. Fix Price Group PLC is not liable
for any losses that any person may incur due to the fact
that they relied on the forward-looking statements. Except
as expressly envisaged by applicable law, the Company
assumes no obligation to distribute or publish any updates
or changes to the forward-looking statements reflecting
any changes in expectations or new information as well
as subsequent events, conditions, or circumstances. About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
144
Management
Statement
of Responsibility
I hereby confirm that:
• the financial statements prepared in accordance with
the International Financial Reporting Standards represent
an accurate and fair reflection of the Company’s assets,
liabilities, financial position, profits, and losses as well as
those of its consolidated subsidiaries as a whole; and
• the management report includes a fair description
of the development and performance of business
operations and the Company’s position as well as that
of its consolidated subsidiaries as a whole along with a
description of the main risks and uncertainties they face.
Dmitry Kirsanov
Member of the Board of Directors and CEO
Contact Information
Address
Makariou III & Vyronos Street, P. Lordos Center
bld., Block B, 1st floor, Office 102,
3105 Limassol, Cyprus
Tel: +35799116460
Investor Relations
Elena Mironova
Head of Investor Relations
ir@fix-price.com About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
145
Statement
of Responsibility
I hereby confirm that:
• the financial statements prepared in accordance with
the International Financial Reporting Standards represent
an accurate and fair reflection of the Company’s assets,
liabilities, financial position, profits, and losses as well as
those of its consolidated subsidiaries as a whole; and
• the management report includes a fair description
of the development and performance of business
operations and the Company’s position as well as that
of its consolidated subsidiaries as a whole along with a
description of the main risks and uncertainties they face.
Dmitry Kirsanov
Member of the Board of Directors and CEO
Contact Information
Address
Makariou III & Vyronos Street, P. Lordos Center
bld., Block B, 1st floor, Office 102,
3105 Limassol, Cyprus
Tel: +35799116460
Investor Relations
Elena Mironova
Head of Investor Relations
ir@fix-price.com About the Company CEO Statement Strategic Report Business Overview Sustainability Corporate Governance Appendices
145