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MAGNIT PJSC (MGNT)
PJSC 'Magnit' Announces Positive Like-For-Like Sales and Almost 10% Sales
Growth in 4Q 2018
07-Feb-2019 / 10:00 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Press Release | Krasnodar | February 07, 2019
PJSC "Magnit" Announces Positive Like-For-Like Sales and Almost 10% Sales
Growth in 4Q 2018
Krasnodar, Russia (7 February, 2019): Magnit PJSC (MOEX and LSE: MGNT), one
of Russia's leading retailers announces its unaudited 4Q and FY 2018 results
prepared in accordance with IFRS1.
Revenue increased by 9.7% from 302 billion RUR in 4Q 2017 to 332 billion RUR
in 4Q 2018 on the back of significant LFL sales improvement to 0.6% compared
to -2.0% in the previous quarter. This was the first quarter in 2 years with
positive LFL sales as a result of improved CVP, changes in category
management and increased availability on the shelf. LFL sales growth in the
key format turned positive to 0.3% as average ticket growth outweighed still
negative traffic. This was mainly driven by sound positive assortment mix
and inflation. The best performance was demonstrated by "Magnit Cosmetic"
stores - LFL sales growth reached 6.5% in 4Q 2018 on the back of 4.9% LFL
average ticket growth and 1.5% traffic growth. Magnit supermarkets' LFL
sales growth remained negative although improved from -1.6% in 3Q 2018 to
-0.7% in 4Q.
During 2018 Magnit added (net) 2,049 stores (1,302 convenience stores, 731
drogerie stores and 16 supermarkets). The total store base as of December
31, 2018 reached 18,399 stores. Addition of selling space in 2018 was 669
thousand sq. m. compared to 687 thousand sq. m. in 2017. The new CVP for the
convenience format has been finalized and new stores will be opened under
this new CVP with improved layout. The quality of new store openings has
improved which supported sales density growth. We have redesigned 462 stores
in 4Q 2018. As a result, we fulfilled the guidance for the year 2018.
EBITDA in 4Q 2018 increased by 4.3% y-o-y on the back of EBITDA margin of
7.0%. EBITDA result was driven by the gross profit dynamics, increase of the
lease expense due to the higher share of leased stores. Negative impact was
partially offset by the improvement of payroll expenses through productivity
increase in stores and energy consumption measures resulting in utilities
costs reduction.
Net Income in 4Q 2018 increased by 7.1% from 7.9 billion RUB in 4Q 2017 to
8.4 billion RUB in 4Q 2018. EBITDA margin contraction was almost neutralized
due to improvement of interest expenses as a result of improvements of terms
in the debt portfolio. Net Income Margin in 4Q 2018 was 2.5%.
Olga Naumova, Magnit's Chief Executive Officer, commented:
**********************************************************
"We are proud to report positive like-for-like sales growth in the 4th
quarter for the first time in 2 years. We are delighted that customers have
reacted fast to the transformation we started six months ago, helping to
grow sales almost 10% in the 4th quarter.
With these positive trends and our completed management team we feel very
confident about 2019".
4Q 2018
Monthly
Operating
Metrics:
October Y-o-Y, November Y-o-Y, December Y-o-Y, %
% %
New Store 243 n/a 335 n/a 379 n/a
Openings
(NET)
Convenience 133 n/a 219 n/a 262 n/a
stores
Supermarkets2 2 n/a 0 n/a 8 n/a
Drogerie 108 n/a 116 n/a 109 n/a
Stores
Number of 17,685 n/a 18,020 n/a 18 399 n/a
Stores (EOP)
Convenience 12,946 n/a 13,165 n/a 13 427 n/a
stores
Supermarkets 459 n/a 459 n/a 467 n/a
Drogerie 4,280 n/a 4,396 n/a 4,505 n/a
Stores
New Selling 79 n/a 114 n/a 139 n/a
Space, th.
sq. m.
Convenience 51 n/a 85 n/a 104 n/a
stores
Supermarkets 2 n/a 0 n/a 9 n/a
Drogerie 26 n/a 29 n/a 26 n/a
Stores
Total Selling 6,171 9.4% 6,285 10.5% 6,424 11.6%
Space (EOP),
th. sq. m.
Convenience 4,255 9.2% 4,340 10.7% 4,444 12.3%
stores
Supermarkets 933 2.5% 933 2.1% 942 1.2%
Drogerie 982 17.4% 1,011 18.6% 1,038 19.8%
Stores
Number of 369 8.8% 355 5.1% 389 3.6%
Customers,
million
Convenience 312 8.6% 301 4.8% 323 3.5%
stores
Supermarkets 33 4.6% 32 3.9% 36 (2.1)%
Drogerie 24 16.9% 23 11.5% 29 13.9%
Stores
Retail 99,823 9.4% 100,828 9.8% 126,206 8.7%
Sales3,
million RUR
Convenience 75,498 9.9% 76,678 10.1% 92,347 10.0%
stores
Supermarkets 16,580 2.7% 16,759 6.0% 22,887 (0.9)%
Drogerie 7,745 20.4% 7,391 16.0% 10,972 21.6%
Stores
4Q and 12M
2018 Key
Operating
Metrics:
4Q 2018 4Q 2017 Y-o-Y, % 12M 2018 12M 2017 Y-o-Y, %
New Store 957 653 n/a 2,049 2,291 n/a
Openings
(NET)
Convenience 614 382 n/a 1,302 1,604 n/a
stores
Supermarkets 10 19 n/a 16 20 n/a
Drogerie 333 252 n/a 731 667 n/a
Stores
Number of 18,399 16,350 n/a 18,399 16,350 n/a
Stores (EOP)
Convenience 13,427 12,125 n/a 13,427 12,125 n/a
stores
Supermarkets 467 451 n/a 467 451 n/a
Drogerie 4,505 3,774 n/a 4,505 3,774 n/a
Stores
New Selling 332 192 n/a 669 687 n/a
Space, th.
sq. m.
Convenience 239 117 n/a 486 506 n/a
stores
Supermarkets 11 28 n/a 11 34 n/a
Drogerie 81 47 n/a 171 147 n/a
Stores
Total 6,424 5,755 11.6% 6,424 5,755 11.6%
Selling
Space (EOP),
th. sq. m.
Convenience 4,444 3,958 12.3% 4,444 3,958 12.3%
stores
Supermarkets 942 931 1.2% 942 931 1.2%
Drogerie 1,038 866 19.8% 1,038 866 19.8%
Stores
Number of 1,113 1,052 5.8% 4,370 4,040 8.2%
Customers,
million
Convenience 935 886 5.6% 3,690 3,404 8.4%
stores
Supermarkets 101 99 1.9% 395 383 3.1%
Drogerie 77 67 14.1% 285 254 12.2%
Stores
LFL Results:
************
4Q 2018 - 4Q 20174
Formats Average Ticket Traffic Sales
Convenience stores 3.9% (3.5%) 0.3%
Supermarkets 1.1% (1.8%) (0.7%)
Drogerie Stores 4.9% 1.5% 6.5%
Total 3.7% (3.0%) 0.6%
12? 2018 - 12? 20174
Formats Average Ticket Traffic Sales
Convenience stores 0.0% (2.8%) (2.8%)
Supermarkets (2.0%) (1.3%) (3.3%)
Drogerie Stores 4.1% (1.1%) 3.0%
Total 0.1% (2.6%) (2.5%)
4Q and 12M 2018 Key Financial Results, million RUR
**************************************************
4Q 4Q 2017 Growth Rate 12M 2018 12M Growth
2018 2017 Rate
Net sales 331,64 302,329 9.7% 1,237,01 1,143, 8.2%
1 5 314
Convenience 244,52 222,320 10.0% 917,853 846,11 8.5%
stores 3 3
Supermarkets 56,226 55,044 2.1% 207,434 206,21 0.6%
4
Drogerie 26,108 21,830 19.6% 91,563 78,786 16.2%
Stores
Wholesale 4,784 3,135 52.6% 20,164 12,201 65.3%
Gross Profit5 78,654 72,853 8.0% 296,457 289,49 2.4%
8
Gross Margin, 23.7% 24.1% n/a 24.0% 25.3% n/a
%
EBITDAR 36,141 33,923 6.5% 141,036 136,96 3.0%
7
EBITDAR 10.9% 11.2% n/a 11.4% 12.0% n/a
Margin, %
EBITDA6 23,219 22,253 4.3% 89,827 91,644 (2.0%)
Adjusted 23,219 22,253 4.3% 91,326 91,644 (0.3%)
EBITDA
EBITDA 7.0% 7.4% n/a 7.3% 8.0% n/a
Margin, %
Adjusted 7.0% 7.4% n/a 7.4% 8.0% n/a
EBITDA
Margin, %
EBIT 13,810 13,433 2.8% 53,366 57,928 (7.9%)
EBIT Margin, 4.2% 4.4% n/a 4.3% 5.1% n/a
%
Profit before 10,873 10,300 5.6% 43,025 45,424 (5.3%)
tax
Taxes (2,444 (2,432) 0.5% (9,213) (9,885 (6.8%)
) )
Net Income 8,429 7,867 7.1% 33,812 35,539 (4.9%)
Net Income 2.5% 2.6% n/a 2.7% 3.1% n/a
Margin, %
Key Financial Position Statements as of 31.12.2018, million RUR
***************************************************************
12M 2018 12M 2017
Non-current assets 383,301 336,786
Inventories 187,828 162,205
Cash and cash equivalents 26,748 18,337
Other current assets 13,470 8,997
Assets 611,347 526,325
Equity 253,652 259,307
Long-term borrowings 93,764 86,338
Other long-term liabilities 28,923 22,622
Trade and other payables 130,624 99,142
Short-term borrowings and short-term 70,827 40,122
portion of long-term borrowings
Other short-term liabilities 33,556 18,793
Equity and liabilities 611,347 526,325
Net debt / Adjusted EBITDA 1.5 1.2
Notes:
******
1. This announcement contains inside information which is disclosed in
accordance with the Market Abuse Regulation which came into effect on 3 July
2016.
2. Please note that there may be small variations in calculation of totals,
subtotals and/ or percentage change due to rounding of decimals.
For further information, please contact:
****************************************
Dmitry Kovalenko
Director for Investor Relations
Email: kovalenko_dv3@magnit.ru [1]
Office: +7-861-277-45-54, 210-9810 x 46082
Media Inquiries
Media Relations Department Email: press@magnit.ru [2]
Note to editors:
****************
Public Joint Stock Company "Magnit" is one of Russia's leading retailers.
Founded in 1994, the company is headquartered in the southern Russian city
of Krasnodar. As of December 31, 2018, Magnit operated 37 distribution
centers and 18,399 stores (13,427 convenience, 467 supermarkets and 4,505
drogerie stores) in 2,976 cities and towns throughout 7 federal regions of
the Russian Federation.
In accordance with the unaudited IFRS management accounts for 2018, Magnit
had revenues of RUB 1,237 billion and an EBITDA of RUB 90 billion. Magnit's
local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on
the London Stock Exchange (LSE: MGNT) and it has a credit rating from
Standard & Poor's of BB.
ISIN: US55953Q2021
Category Code: MSCU
TIDM: MGNT
LEI Code: 2534009KKPTVL99W2Y12
OAM Categories: 2.2. Inside information
Sequence No.: 7401
EQS News ID: 773487
End of Announcement EQS News Service
1: mailto:Email:%20kovalenko_dv3@magnit.ru
2: mailto:press@magnit.ru
(END) Dow Jones Newswires
February 07, 2019 02:00 ET (07:00 GMT)
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