OREANDA-NEWS. April 27, 2011. OJSC Rosinter Restaurants Holding (Rosinter), the leading casual dining restaurants chain in Russia and CIS (RTS and MICEX ticker: ROST), announced its financial results for FY2010 prepared in accordance with IFRS. The Company’s audited consolidated financial statements for the period are posted on our web page at www.rosinter.com, reported the press-centre of Rosinter.

2010 HIGHLIGHTS
Consolidated net revenue increased by 16.9% to RUB 9,746 mln in 2010 as compared to RUB 8,340 mln in 2009

Gross profit increased by 12.6% and amounted to RUB 2,341 mln, for a gross margin of 24.0%

Operating profit amounted to RUB 635 mln, for an operating margin of 6.5% as compared to 4.0% in 2009

EBITDA amounted to RUB 1,038 mln, for an EBITDA margin of 10.7% as compared to 8.9% in 2009

Net profit amounted to RUB 258 mln, for a net profit margin of 2.6% as compared to net losses in 2009

Gross debt decreased by 38.1% to RUB 1,361 mln and its long-term component increased to 79.7% as at December 31, 2010 from 46.9% as at December 31, 2009

Net debt decreased by 45.1% to RUB 1,145 mln, leading to a Net debt/EBITDA of 1.1x as at December 31, 2010 in comparison with 2.97x as at December 31, 2009

 Sergey Beshev, President and CEO, commented:
“In 2010 Rosinter has shown improvements in many areas. We demonstrated solid sales growth, improved operating efficiency, delivered positive bottom-line results, implemented several strategic organizational projects and expanded our restaurant network. This was a year of recovery when we concentrated on creating good platform for future development and providing high quality operations. This recovery was unevenly distributed between regions because we still did not act in fully post-crisis environment.

Throughout the year our sales were steadily growing driven by recovery in like-for-like revenues and the increasing contribution of restaurants opened since the second half of 2008. It is important to note that the growth of sales in comparable stores was driven predominantly by the increasing guests flow. Last year reconfirmed our leading market position and high guest loyalty and this allowed us not only to recover part of 2009’s sales decline, but also to increase our market share both in Moscow and in Russia overall. Sales in comparable stores increased in 2010 by 6.9% which still leaves substantial room for a rebound after a 15.4% drop in 2009. Overall in 2010, our consolidated revenue increased by 16.9% as compared to 2009.

Sales recovery and improvements in operating efficiency allowed us to reach positive bottom-line results. Net profit for 2010 amounted to 258 million rubles and EBITDA amounted to 1,038 million rubles for a margin of 10.7%. In 2010 our operating profit margin increased to 6.5% which was positively contributed by the dynamics of SG&A expenses. Last year we optimized internal processes and implemented new organization structure that better fits the needs of revitalized development and also is more cost-efficient. At the same time, we were running the process of realigning our legal structure. We reduced the number of legal entities and this brought positive influence on the effective tax rate and transactional costs.

2010 was a turnaround year in terms of corporate development. Starting second half of 2010, following a successful SPO, we increased the pace of new openings and built a pipeline for future rollout. Our new corporate development process delivered good results with 16 gross new restaurants opening. We widened our presence in transportation hubs by expanding our corporate network in Sheremetevo airport Terminal D and opening two new restaurants in Borispol airport, Kiev. Also last year we completed the acquisition of an independent restaurant company in Poland adding a new T.G.I. Friday’s outlet to our network and opening the way for further and faster expansion in the country.

In 2010 we ran a very strict new sites section process which targeted only prime locations with high expected profitability, while simultaneously optimizing our corporate portfolio by a timely exit from non-core and low-performing locations. Although the restaurant portfolio optimization process had some negative impact in overall store-count, it made a positive impact on shareholders’ value given its effects on the company’s consolidated financial results.

In addition during last year we expanded our franchise chain by 18 restaurants and reconfirmed the high degree of franchise partners’ confidence and satisfaction with our business model. By year end, the total number of franchise stores reached 113 which constitutes over 30% of the network.

In 2010, we successfully completed our secondary public offering of shares and attracted additional capital. Our shareholders gave yet another confirmation of the continuing confidence in our company. The funds received during the SPO were generally used to reduce and restructure our debt.

Last year brought to Rosinter and its trade marks new acknowledgements. The company was granted with the East Capital award for the highest growth of sales, assets and profits in 2009-2010, Rosinter received national “Golden Brand” award for successful development of franchising, and also we were granted with the “Best treasury and cash-management” award from the “Finance Director” magazine. Our brand “Planet Sushi” has received national “Golden Mark” award, and our T.G.I. Friday’s restaurants were honored for the highest growth of guest evaluation (GEM) in Europe.

In 2010 we initiated the process of revitalizing our core brands “IL Patio” and “Planet Sushi” which we plan to complete in autumn 2011. We think that this will not only allow us to refresh the interior of our restaurants, but also will bring greater value for same money for our guests.

Going forward we see that the sales recovery trends continue and so far in 2011 we see our guest flow increasing. In 2011 we are acting in tight environment and our operating performance will be influenced by external factors, including new social tax rates, wages inflation and food inflation, but we stay cautiously optimistic about full year results. This year our efforts will be focused on providing even better guest experience and further optimization of operating processes. We will continue our strategy of selecting top-quality locations for corporate development while keeping up our high pace of franchise expansion with wide geographical coverage.

In 2011 Rosinter celebrates its 20th anniversary and I would like to thank all our team, shareholders and partners for the continuing confidence in us which has played an important role in the success of our business in the past and going forward.”