Official statement of Azerbaijan Supermarket LLC on financial condition

Azerbaijan Supermarket LLC made an official statement about the financial position of the company. A copy of the application is directed to the edition of In his statement, the company again made clarity into a situation around the current financial situation of Bravo supermarkets:

“in connection with the distribution of the media media information about the financial situation of Bravo, as a result of the publication of Azerbaijansupermarket LLC, the emission prospectus in order to issue bonds, we consider it necessary to inform the following.

Enterprises, the so-called, “modern retailers” requires investment for the expansion of retail chains and years of work to achieve positive results and profit. Each new store is necessary about 6-12 months after the opening to start receiving a monthly operating profit, and approximately 18-24 months to recoup all operating expenses from the beginning of the activity and exit in plus.

In order to recoup the investment in the store fully, it takes about 3-4 years since the start of the store’s activities. Thus, taking into account the need for permanent investments to expand the network and opening new markets (at the beginning of 2018, the Bravo network consisted of 7 stores and 20,000 square meters of the trading zone, today it is 71 market and 83,000 square meters, respectively), Negative profits in the period of growth is not a surprise for professional investors and analysts, but is perceived as a result of aggressive growth policies. The total market share of the “modern retailers” points in Azerbaijan lags behind international indicators in developed and developing countries. This, in turn, explains our strategy to expand the network and to the desire to preserve the BRAVO market share.

Over the past 3 years, we see the growth of operating profit (EBITDA) LLC “Azerbaijan Supermarket. And in 2019, and in 2020 we have reached a positive EBITDA indicator, where the figure is 5020 50% higher than in 2019.

Operating margin (EBITDA as a percentage of revenue) also increases over the years (20% growth in 2020 compared with 2019th). This result was possible due to the annual increase in gross margin and optimizing management costs with respect to sales due to scale savings achieved thanks to growth. We still have opportunities to increase the EBITDA margin (as a percentage), and we are in the process of implementing a number of initiatives to achieve our goals.