DJ MAGNIT REPORTS 4.1% LFL SALES GROWTH AND 7.0% EBITDA MARGIN IN 1Q 2021
MAGNIT PJSC (MGNT)
MAGNIT REPORTS 4.1% LFL SALES GROWTH AND 7.0% EBITDA MARGIN IN 1Q 2021
29-Apr-2021 / 09:59 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.
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Magnit Reports 4.1% LFL Sales Growth and 7.0% EBITDA margin in 1Q 2021
Krasnodar, Russia (April 29, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers,
announces its 1Q 2021 operating and unaudited financial results.
1Q 2021 Key Operating and Financial Highlights
- Total revenue increased by 5.8% y-o-y (or by 7.1% adjusted for leap-year effect) to RUB 397.9
billion;
- Net retail sales reached RUB 387.9 billion representing 6.3% y-o-y growth (or by 7.5% adjusted for
6.3% leap-year effect);
- LFL[1] sales growth stood at 4.1% driven by 14.9% average ticket growth and 9.4% traffic decline;
net retail
sales growth
- The Company opened 407 stores on gross basis (241 convenience stores, one supermarket and 165
drogeries). As part of the Company's ongoing efficiency improvement campaign, 71 stores were closed
resulting in a net store addition of 336 and the total store base as of March 31, 2021 of 21,900;
4.1% - Addition of selling space amounted to 109 thousand sq. m. bringing total selling space to 7,606
thousand sq. m. (representing 4.5% y-o-y growth);
lfl sales - The Company redesigned 100 stores (88 convenience stores and 12 supermarkets). As at March 31, 2021,
growth 73% of convenience stores, 32% of supermarkets and 57% of drogeries are either new or refurbished;
- Gross profit margin stood at 23.4% - an increase of 74 bps y-o-y on improved commercial terms, lower
shrinkage and favorable format mix partially offset by slightly higher supply chain costs as well as
ongoing investments into loyalty program;
- EBITDA was RUB 27.7 billion with a 7.0% margin - 91 bps y-o-y margin expansion on strong gross margin
7.0% dynamics and strict cost control;
- Net income increased by 158.8% y-o-y and stood at RUB 10.9 billion. Net income margin increased by
EBITDA margin 162 bps to 2.7%.
«
"The first quarter results were in line with our internal expectations. In January, February and
the first half of March, sales were exceptionally strong across all formats and channels despite
trading against a prior year base that included a spike in sales driven by consumer stockpiling
during the nationwide lockdown. LFL sales grew 4.1% in the first quarter of 2021, supported by
further improvements in mature stores. We continue to grow market share and gain customers from
competitors. Our confidence that these improvements are now baked in and permanent remains intact.
We are on track to deliver on our published plans.
Although the macro and consumer environment remain volatile, we continue to see a gradual
Jan Dunning improvement in profitability, delivering sustainable 7.0% EBITDA margin in 1Q 2021.
Magnit's President
and CEO We continue to be guided by our key priorities - improvements in our customer value proposition and
operating efficiency, smart returns-driven expansion and store redesign to deliver further
profitability gains. Development of the wider Magnit eco-system is progressing well with new
services available now via Magnit Pay. We have also expanded our e-commerce pilots and are pleased
with the first results.
Magnit's financial position remained very stable with further optimization of the working capital
cycle and low debt burden. Our strong capital discipline underpinned the recent Board decision to
pay a second tranche of dividends for the full year of 2020 in the amount of about RUB 25 billion."
»
25
RUB billion
Key Events in 1Q 2021 and after the Reported Period
total amount of
dividends - Magnit Board of Directors recommended the AGM to pay c. RUB 25 billion of dividends for the
recommended by the full year of 2020. Subject to shareholders' approval this tranche will be the second dividend
board to be paid payment for 2020 resulting in the total amount of dividends paid for 2020 of c. RUB 50 billion;
- Magnit presented its Corporate Strategy 2021-2025;
for 2020 - Magnit redeemed its RUB 10 billion exchanged-traded bonds of BO-003P-02 series;
- Magnit continued developing its hard discounter pilot and opened another 10 stores bringing the
total number of My Price stores to 33;
- Magnit started testing new format of small DIY stores - Magnit Master;
- A cooperation agreement with the Government of the Republic of Dagestan was signed following
Magnit's plans to open around 180 stores in the region in the next five years;
- Magnit became the first Russian retailer to enable its customers to pay for mobile, Internet
and TV services as well as to top up its transport cards via its app by adding new functions to
its Magnit Pay service;
- Magnit started implementing pay-with-a-glance technology in its stores;
- Magnit opened first dark stores in Moscow;
- Magnit opened new distribution center in Surgut;
- Magnit announced its plans to open a representative office in Uzbekistan to drive the
development of direct import from Middle East and Central Asia and to ramp up its export
33 operations;
- Magnit and eight largest FMCG producers are joining efforts to launch the 'United for a
hard disounters in Healthier Future' Initiative;
operation - Magnit published its second Sustainability Report.
1Q 2021 Operating Results
Retail Sales
1Q 2021 1Q 2020 Change Change, %
Total Net Retail Sales, million RUB 387,899 364,784 23,115 6.3%
Convenience Stores[2] 299,942 279,795 20,147 7.2%
Supermarkets[3] 50,115 50,963 -847 -1.7%
Drogerie Stores 35,011 31,406 3,605 11.5%
Other Formats[4] 2,831 2,621 210 8.0%
Number of Tickets, mln 1,103 1,195 -92 -7.7%
Convenience Stores 922 1,002 -80 -7.9%
Supermarkets 79 90 -11 -12.5%
Drogerie Stores 94 95 -1 -0.7%
Other Formats 8 8 -1 -8.0%
Average Ticket[5], RUB 352 305 46 15.2%
Convenience Stores 325 279 46 16.4%
Supermarkets 636 566 70 12.4%
Drogerie Stores 373 332 41 12.3%
Other Formats 357 305 52 17.2% Stores and Selling Space
1Q 2021 1Q 2020 Change Change, %
Number of Stores (EOP) 21,900 20,860 1,040 5.0%
Convenience Stores 15,098 14,594 504 3.5%
Supermarkets 471 472 -1 -0.2%
Drogerie Stores 6,331 5,794 537 9.3%
Store Openings (Gross) 407 321 86 26.8%
Convenience Stores 241 145 96 66.2%
Supermarkets 1 0 1 n/a
Drogerie Stores 165 176 -11 -6.3%
Store Closures 71 186 -115 -61.8%
Convenience Stores 54 173 -119 -68.8%
Supermarkets 0 1 -1 -100.0%
Drogerie Stores 17 12 5 41.7%
Store Openings (Net) 336 135 201 148.9%
Convenience Stores 187 -28 215 -767.9%
Supermarkets 1 -1 2 -200.0%
Drogerie Stores 148 164 -16 -9.8%
Total Selling Space (EOP), th. sq.m 7,606 7,277 329 4.5%
Convenience Stores 5,169 4,951 218 4.4%
Supermarkets 943 947 -4 -0.4%
Drogerie Stores 1,460 1,339 121 9.0%
Other formats 33 39 -6 -14.5%
Selling Space Addition (Net), th. sq.m 109 38 71 n/a
Convenience Stores 80 0 80 n/a
Supermarkets 2 -1 3 n/a
Drogerie Stores 32 36 -5 n/a
Other formats -4 3 -7 n/a 1Q 2021 LFL Results
LFL composition, % Average Ticket Traffic Sales
Total 14.9% -9.4% 4.1%
Convenience Stores 15.9% -9.5% 4.9%
Supermarkets 12.1% -11.4% -0.7%
Drogerie Stores 12.0% -6.9% 4.3% High Base and Leap-Year Effect
LFL Sales Growth Net Retail Sales Growth
(MORE TO FOLLOW) Dow Jones Newswires
April 29, 2021 03:00 ET (07:00 GMT)
DJ MAGNIT REPORTS 4.1% LFL SALES GROWTH AND 7.0% -2-
2.5 months 2021 (January 1st - March 14th, 2021) 7,3% 9.1%
0.5 months 2021 (March 15th - 31st, 2021) -7.7% -4.6%
1Q 2021 4.1% 6.3%
1Q 2021 adjusted for leap-year effect - 7.5%
1Q 2021 adjusted for leap-year and stockpiling effect 7.5% 10.9%
Trading Performance
5.3% Total sales in 1Q 2021 grew by 5.8% y-o-y to RUB 397.9 billion.
LTM sales Net retail sales in 1Q 2021 grew by 6.3% y-o-y (or 7.5% y-o-y adjusted for the leap-year effect) driven
density[6] by a combination of 4.5% selling space growth and 4.1% LFL sales growth.
improvement
y-o-y
Net retail sales growth continued to outpace selling space growth on further improvement of sales
densities. Overall sales densities in 1Q 2021 improved by 0.5% q-o-q and 5.3% y-o-y while in the
Company's main convenience store format these improved by 7.0% y-o-y.
High base effect due to the beginning of the pandemic in the middle of March 2020 had a significant
impact on the dynamics within the reported quarter. March last year was the strongest month with the
record high double-digit LFL sales growth due to stockpiling effect. As a result, net retail sales
growth during first 2.5 months[7] reached 9.1% while starting from the 15th of March, sales growth
started to decelerate and stood at -4.6% for the rest of the month bringing the 1Q average to 6.3%.
All regions showed solid positive LFL sales growth with Siberian, Caucasian and Central regions
delivering the strongest results.
LFL sales growth continued accelerating during first 2.5 months of the reported quarter and reached 7.3%
being almost in line with previous quarter average. High base effect of last year resulted in
deterioration of LFL sales growth starting from the week of March 15th to -7.7% for the rest of the
month.
Mature stores continued to be the main driver of the Company's strong LFL performance with 288 stores
entering LFL panel in 1Q (incl. 116 convenience stores and 172 drogeries). Only 5.9% of Magnit's selling
94% space is currently in the ramp-up phase with 94.1% already matured.
of selling
space is
already As in the previous quarters, average ticket was the main driver of LFL sales growth. This reflects
matured continued trend of lower frequency of visits overcompensated by strong basket growth driven by increased
spending per visit.
LFL average ticket growth in 1Q 2021 was 14.9% predominantly due to growing number of articles per
basket, continued 'trading up' purchases and on-shelf price inflation. 'Trading up' effect was driven by
ongoing assortment improvements and inflow of more affluent customers from other chains. Shelf price
inflation peaked in February and started decelerating since March.
14.9% LFL traffic growth in 1Q 2021 declined to -9.4% driven by the high base of the previous year (4.0% in 1Q
2020). Already in January and February 2020 (pre-COVID months) LFL traffic demonstrated solid growth on
lfl average positive response of customers to operational improvements and initiatives and then accelerated further
ticket growth driven by increased frequency of visits during stockpiling in March.
in 1Q 2021
1Q results came without any acceleration of promo intensity. Promo share as a % of sales went down vs
previous quarter and remained flat y-o-y on the back of more normal shopping patterns and different
marketing tactics leading to a shift from "bulk" to personalized actions. Despite lower promo intensity
q-o-q, sales growth continued accelerating during first 2.5 months of the reported quarter.
Fresh fruits and vegetables remained the fastest growing category on continuous improvements of
assortment and on-shelf availability.
46 mln Magnit's cross-format loyalty program continued to gain popularity among customers during the period -
the number of active loyalty card users exceeded 46 million. Company-wide, the share of tickets using
of loyalty the loyalty card was 54% with penetration in sales of 68%. The loyalty program continues to deliver
program active positive cross-format gains with sustainable growth of customers visiting 2+ store formats (42% of
users Magnit customer base at the end of the reporting period).
Store Network Development and Performance by Format
The convenience segment generated 77.3% of total net retail sales in the reported quarter. In 1Q 2021
Magnit accelerated its expansion program y-o-y and opened (gross) 241 convenience stores (145 in 1Q
77.3% 2020). The Company continued its efficiency campaign and closed 54 convenience stores vs 173 store
closures in 1Q 2020. As a result, Magnit added 187 stores (net) during the reported quarter, bringing
of total net the total number of convenience stores to 15,098. The selling space growth of convenience stores was
retail sales 4.4% y-o-y resulting in the total selling space of this format of 5,169 thousand sq. m. as of March
generated by 31, 2021. Sales in the convenience format grew by 7.2% driven by LFL sales growth of 4.9%. LFL traffic
convenience growth decelerated to -9.5% on high base effect. LFL average ticket growth remained strong and stood
segment at 15.9% overcompensating negative LFL traffic growth.
The share of supermarkets was 12.9% of the Group's net retail sales in the reported quarter. During 1Q
2021 the Company opened one supermarket resulting in the total number of supermarkets of 471. Selling
space across this format decreased by 0.4% y-o-y as 6 supermarkets were closed during last four
quarters and stood at 943 thousand sq. m. This resulted in net sales growth of -1.7%. During first 2.5
12.9% months of the reported quarter, supermarkets delivered strong trading in a positive zone with
acceleration vs previous quarter. However, the last two weeks of March distorted the quarter
of total net performance as supermarkets had the highest base effect due to stockpiling last year which, to a great
retail sales extent, happened in the large formats. LFL traffic was flat q-o-q and stood at -11.4% while LFL
generated by average ticket growth decelerated to 12.1% which was not enough to compensate negative LFL traffic. As
supermarkets a result, LFL sales growth in supermarkets stood at -0.7%.
The share of drogerie format as a proportion of the total net retail sales increased to 9.0% in the
reported quarter vs 8.6% a year ago. During 1Q 2021 Magnit opened (net) 148 cosmetics stores and added
32 thousand sq. m. of selling space delivering a 9.0% y-o-y increase in selling space, the highest
9.0% across all formats. Driven by this increase in selling space and LFL sales growth of 4.3%, sales grew
11.5% representing again the strongest performance among all Magnit's store formats. LFL traffic
of total net growth was negative of -6.9% well compensated by strong 12.0% LFL average ticket growth.
retail sales
generated by
drogerie
During 1Q 2021 Magnit continued its renovation program and redesigned 88 convenience stores and 12
supermarkets resulting in the combined share of refurbished and new stores at: 73% for convenience
stores, 32% for supermarkets and 57% for the drogerie format.
E-commerce
Magnit began testing e-commerce services in the second half of 2020. In total, Magnit currently runs
seven online delivery projects, both independently and in cooperation with partners.
Magnit fulfils around 9,500 orders a day. The run rate for Magnit's online channel stands at RUB 4.1
billion based on the last week of March.
Among all these pilots, convenience store-based express delivery has the highest sales and shows the
best growth dynamics.
4.1
RUB billion Average ticket for Magnit's own delivery service is c. RUB 1,400 which is approx. 3.8 times higher
than in the convenience stores (RUB 372 in 1Q 2021). This is mostly due to a larger number of items
annual GMV per basket.
runrate
Magnit's e-commerce services today cover over 1,300 stores in 58 regions and 94 cities, with around
60% of the current revenue generated outside Moscow and Saint-Petersburg. During 2021, the Company
plans to expand online delivery adding at least 1,500 convenience, drogerie and large-format stores in
more than 50 regions across Russia. 1Q 2021 Monthly Operating Results
January Change February Change March Change
Total net retail sales, RUB million 124,429 10.7% 124,693 7.4% 138,777 1.8%
Convenience Stores 96,819 11.1% 95,892 8.6% 107,231 2.8%
Supermarkets 15,957 3.7% 16,364 -1.4% 17,795 -6.2%
Drogerie Stores 10,700 17.3% 11,526 11.1% 12,785 7.3%
Other formats 953 33.1% 912 10.8% 966 -10.7%
Number of tickets, million 357 -7.3% 345 -10.4% 401 -5.6%
Convenience Stores 300 -7.8% 287 -10.6% 335 -5.6%
(MORE TO FOLLOW) Dow Jones Newswires
April 29, 2021 03:00 ET (07:00 GMT)
DJ MAGNIT REPORTS 4.1% LFL SALES GROWTH AND 7.0% -3-
Supermarkets 25 -12.8% 25 -15.2% 29 -9.7%
Drogerie Stores 30 2.3% 30 -3.1% 35 -1.1%
Other formats 2.6 8.3% 2.5 -8.1% 2.6 -20.1%
Average ticket[8], RUB 348 19.5% 362 19.8% 346 7.9%
Convenience Stores 323 20.5% 334 21.5% 320 8.9%
Supermarkets 626 18.9% 661 16.2% 623 3.8%
Drogerie Stores 362 14.7% 386 14.7% 370 8.5%
Other formats 354 23.2% 358 19.9% 360 11.3%
Number of Stores (EOP) 21,660 n/a 21,729 n/a 21,900 n/a
Convenience Stores 14,969 n/a 14,997 n/a 15,098 n/a
Supermarkets 470 n/a 471 n/a 471 n/a
Drogerie Stores 6,221 n/a 6,261 n/a 6,331 n/a
Store Openings (Gross) 106 n/a 90 n/a 211 n/a
Convenience Stores 66 n/a 45 n/a 130 n/a
Supermarkets 0 n/a 1 n/a 0 n/a
Drogerie Stores 40 n/a 44 n/a 81 n/a
Store Closures 10 n/a 21 n/a 40 n/a
Convenience Stores 8 n/a 17 n/a 29 n/a
Supermarkets 0 n/a 0 n/a 0 n/a
Drogerie Stores 2 n/a 4 n/a 11 n/a
Store Openings (Net) 96 n/a 69 n/a 171 n/a
Convenience Stores 58 n/a 28 n/a 101 n/a
Supermarkets 0 n/a 1 n/a 0 n/a
Drogerie Stores 38 n/a 40 n/a 70 n/a
Total Selling Space (EOP), th. sq. m. 7,528 3.8% 7,550 4.0% 7,606 4.5%
Convenience Stores 5,115 3.2% 5,127 3.5% 5,169 4.4%
Supermarkets 941 -0.6% 943 -0.4% 943 -0.4%
Drogerie Stores 1,437 9.6% 1,445 9.5% 1,460 9.0%
Other formats 36 -2.8% 35 -7.7% 33 -14.5%
Selling Space Added (Net), th. sq. m. 31.7 n/a 21.7 n/a 55.8 n/a
Convenience Stores 25.4 n/a 12.2 n/a 41.9 n/a
Supermarkets 0.0 n/a 2.0 n/a 0.0 n/a
Drogerie Stores 8.1 n/a 8.0 n/a 15.5 n/a
Other formats -1.8 n/a -0.4 n/a -1.6 n/a
Strong sales momentum continued since the start of 2021 with January delivering solid LFL sales growth in
line with 4Q 2020 average. Sales growth also remained double-digit (10.7%).
10.7% In February strong trend continued with further acceleration of LFL sales above January and above 4Q 2020
average. Net retail sales growth in February was 7.4%. Adjusted for the leap-year effect, net retail
sales growth sales growth in February would be 11.3%. January and February 2021 came on a much stronger base with
in january mid-single digit LFL sales growth in the same months last year.
2021
During first two weeks of March, LFL sales growth demonstrated further acceleration vs previous months.
Starting from March 15th, sales dynamics was hit by the high base effect. As a result, net retail sales
growth in March decelerated to 1.8% driven by negative LFL sales growth offset by 4.5% selling space
growth. Financial Results for 1Q 2021
IAS 17 IFRS 16
RUB mln 1Q 2021 1Q 2020 Change 1Q 2021 1Q 2020 Change
Total Revenue 397,889 376,038 5.8% 397,889 376,038 5.8%
Retail 387,899 364,784 6.3% 387,899 364,784 6.3%
Wholesale 9,990 11,254 -11.2% 9,990 11,254 -11.2%
Gross Profit 93,070 85,185 9.3% 93,073 85,185 9.3%
Gross Margin, % 23.4% 22.7% 74 bps 23.4% 22.7% 74 bps
SG&A, % of Sales -20.5% -20.6% 10 bps -19.0% -19.2% 15 bps
EBITDA pre LTI[9] 28,003 23,088 21.3% 45,452 40,056 13.5%
EBITDA Margin pre LTI, % 7.0% 6.1% 90 bps 11.4% 10.7% 77 bps
EBITDA 27,678 22,744 21.7% 45,127 39,712 13.6%
EBITDA Margin, % 7.0% 6.0% 91 bps 11.3% 10.6% 78 bps
EBIT 16,956 11,461 48.0% 23,160 17,407 33.0%
EBIT Margin, % 4.3% 3.0% 121 bps 5.8% 4.6% 119 bps
Net Finance Costs -2,581 -3,777 -31.7% -10,164 -11,876 -14.4%
FX Gain/ (Loss) -190 -1,830 -89.6% -211 -2,017 -89.5%
Profit before Tax 14,186 5,854 142.3% 12,785 3,514 263.8%
Taxes -3,311 -1,653 100.3% -3,031 -1,185 155.9%
Net Income 10,875 4,201 158.8% 9,753 2,329 318.7%
Net Income Margin, % 2.7% 1.1% 162 bps 2.5% 0.6% 183 bps
23.4%
Gross margin
in 1Q 2021
Total revenue in 1Q 2021 increased by 5.8% to RUB 397.9 billion. Net retail sales in 1Q 2021 grew by 6.3%
y-o-y to RUB 387.9 billion.
Wholesale revenue in 1Q 2021 decreased by 11.2% y-o-y to RUB 10.0 billion with 2.5% proportion of total
sales.
61 bps
y-o-y Gross Profit in 1Q 2021 increased by 9.3% to RUB 93.1 billion with a margin increase of 74 bps y-o-y to
reduction of 23.4% as a result of improved commercial terms, lower shrinkage and favorable format mix. This was
shrinkage partially offset by slightly higher supply chain costs as well as ongoing investments into Magnit's
loyalty program with higher penetration. Format mix had a positive impact on gross margin, with the share
of high-margin drogerie business growing from 8.6% in 1Q 2020 to 9.0% in 1Q 2021 and the share of lower
margin wholesale segment decreasing as a percent of sales y-o-y. Promo intensity was flat y-o-y with some
seasonal reduction compared to the previous quarter.
Supply chain costs increased y-o-y due to continuous increase of on-shelf availability and higher
transportation costs. Growth of transportation tariffs in China impacted domestic transportation tariffs.
Alongside with the growing share of fresh products and overall improvement of on-shelf availability
shrinkage as a proportion of sales decreased further by 61 bps y-o-y driven by ongoing optimization of
supply chain processes, renegotiation of quality standards with suppliers and other initiatives.
SG&A costs improved by 10 bps to 20.5% as a percent of sales. This was achieved as a result of lower
depreciation and rent costs as well as positive operating leverage effect partially offset by negative
effect coming from stores in the ramp up phase, higher packaging, raw materials and marketing costs.
Personnel costs as a percent of sales increased by 3 bps y-o-y on the back of acceleration in store
openings started in 4Q and their ramp-up period offset by growing productivity and retention rate. Staff
turnover continued to improve during the period driven by on-going automation of business processes.
Rental costs as a percent of sales decreased by 6 bps y-o-y driven by higher sales density, improved
lease terms with landlords and closing of inefficient stores. This was achieved despite the increased
share of leased selling space to 78.3% in 1Q 2021 vs 77.3% a year ago.
Depreciation as a percent of sales reduced by 31 bps y-o-y as most of the newly opened stores were leased
while the number of store refurbishments in the reported quarter decreased by more than twice (288 store
were refurbished in 1Q 2020 vs 100 in 1Q 2021).
Advertising expenses increased by 9 bps y-o-y on higher marketing activities including loyalty campaigns
and digital marketing.
Packaging and raw materials expenses increased by 12 bps y-o-y reflecting the ongoing provision of means
of sanitary protection to customers and employees during the COVID-19 pandemic.
Other costs including utilities, repair and maintenance, bank and tax expenses remained broadly flat as a
percent of sales y-o-y.
Total costs incurred as a result of the Company's response to COVID-19 in 1Q 2021 amounted to
approximately RUB 0.3 billion and consisted mainly of personal protection means and safety procedures
(reflected in other operating expenses).
As a result, EBITDA was RUB 27.7 billion with a 7.0% margin - 91 bps y-o-y expansion - due to strong
gross margin dynamics and strict cost control. LTI expenses in the reported period stood at 0.08% of
sales - as a result EBITDA margin pre-LTI was in line with the reported EBITDA margin of 7.0%.
Net finance costs in 1Q 2021 decreased by 31.7% y-o-y (or 36 bps) to RUB 2.6 billion due to the lower
cost of debt and total amount of borrowings. As a result of continued focus on financial efficiencies,
the cost of debt further reduced to the historical low level of 5.9% (89 bps y-o-y or 18 bps q-o-q). This
has also led to further improvement of the debt profile with increased share of long-term borrowings to
98% and debt maturity of 21 months.
7.0%
(MORE TO FOLLOW) Dow Jones Newswires
April 29, 2021 03:00 ET (07:00 GMT)
DJ MAGNIT REPORTS 4.1% LFL SALES GROWTH AND 7.0% -4-
ebitda margin In 1Q 2021 the Company reported FX loss in the amount of RUB 0.2 billion related to direct import
in 1Q 2021 operations.
Income tax in 1Q 2021 was RUB 3.3 billion. Effective tax rate has normalized to 23.3%.
As a result, net income in 1Q 2021 increased by 158.8% y-o-y and stood at RUB 10.9 billion. Net income
margin increased by 162 bps y-o-y to 2.7%.
2.7%
Net income
margin
in 1Q 2021 Financial Position Highlights (IFRS 16)
RUB mln 31.03.2021 31.12.2020 31.03.2020
Inventories 211,241 205,949 223,434
Trade and other receivables 12,171 8,564 12,533
Cash and cash equivalents 6,575 44,700 26,645
Long-term borrowings 144,022 147,695 87,493
Trade and other payables 138,260 161,072 143,353
Short-term borrowings and short-term portion of long-term borrowings 24,205 18,392 131,397
Despite ongoing improvement to on-shelf availability, the increased share of drogerie format by 42 bps
as a percent of net retail sales, supplier inflation and total sales growth of 5.8%, inventories
decreased by RUB 12.2 billion vs March 31, 2020 and stood at 211.2 billion. This was driven by a number
7.6 of projects launched in 2020 including reduction of slow-moving items, assortment harmonization and IT
solutions aimed at better on-shelf availability and promo forecasting.
DAYS
y-o-y
optimisation Trade and other payables reduced by RUB 5.1 billion vs March 31, 2020 and stood at RUB 138.3 billion due
of inventories to inventory reduction vs previous year, while payment days increased. This was partially offset by
[10] slight improvement of accounts receivables by 2.9% to RUB 12.2 billion as a result of ongoing
optimization initiatives including weekly tracking of overdue debts and clearing activities as well as
launch of electronic document flow with suppliers.
Debt Composition and Leverage
March 31, 2021 December 31, 2020 March 31, 2020
IAS 17
Total Debt, RUB billion 168.2 166.1 218.9
Long-Term Debt 144.0 147.7 87.5
Short-Term Debt 24.2 18.4 131.4
Net Debt, RUB billion 161.7 121.4 192.2
Net Debt/EBITDA 1.4? 1.1? 2.2?
IFRS 16
Net Debt, RUB billion 522.8 479.0 549.8
Net Debt/EBITDA 2.8x 2.7x 3.6x
Gross Debt remained almost flat vs December 31, 2020. Following dividend payment for 9M 2020 in the
reported quarter cash position stood at RUB 6.6 billion. As a result, Net Debt increased by 33.2% to RUB
161.7 billion.
1.4x
The Company's debt is fully RUB denominated matching revenue structure. 98% of debt portfolio was
net debt/ long-term with 21 months maturity. The Net Debt to EBITDA ratio was 1.4x as at March 31, 2021 vs 1.1x as
ebitda at December 31, 2020.
as of March
31, 2021 (IAS
17)
Capex in 1Q 2021 increased by 15.9% to RUB 8.3 billion. This was driven by acceleration of expansion
program (407 store openings on gross basis in 1Q 2021 vs 321 in 1Q 2020). Capex is expected to pick up in
the next periods in line with the calendarization of the store opening and redesign process.
FY 2021 Guidance
Magnit confirms its full year store opening, redesign and capex guidance published on February 4th, 2021.
In 2021 Magnit plans to open around 2,000 stores of different format on gross basis as part of its organic expansion and redesign about 700 stores. Capital expenditures are expected in the amount of RUB 60-65 billion.
Note: 1. This announcement contains inside information disclosed in accordance with the Market Abuse Regulation effective
from July 3, 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
dmitry_kovalenko@magnit.ru
Office: +7 (861) 210 4880
Dina Chistyak
Director for Investor Relations
dina_chistyak@magnit.ru
Office: +7 (861) 210 9810 x 15101
Media Inquiries Twitter
press@magnit.ru @MagnitIR
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 March 31, 2021, Magnit operated 39
distribution centers and 21,900 stores (15,098 convenience, 471 supermarkets and 6,331 drogerie stores)
in 3,770 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the audited IFRS 16 results for FY 2020, Magnit had revenues of RUB 1,553.8 billion
and an EBITDA of RUB 178.2 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.
Forward-looking statements
This document contains or may contain forward-looking statements that may or may not prove accurate. For
example, statements regarding expected sales growth rate and/or store openings are forward-looking
statements. Forward-looking statements involve known and unknown risks, uncertainties and other important
factors that could cause actual results to differ materially from what is expressed or implied by the
statements. Any forward-looking statement is based on information available to Magnit as of the date of
the statement. All written or oral forward-looking statements attributable to Magnit are qualified by
this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement
to reflect any change in circumstances. -----------------------------------------------------------------------------------------------------------------------
[1] LFL calculation base includes stores, which have been operating for 12 months since its first day of sales. LFL sales growth and average ticket growth are calculated based on sales turnover including VAT.
[2] Convenience Stores include convenience stores and small pilots such as Magnit City and My Price
[3] Supermarkets include Magnit Family supermarkets and Magnit Extra superstores
[4] Other Formats include pharmacies and stores located at Russian Post offices
[5] Excluding VAT
[6] Net retail sales of the last four quarters divided by the average selling space at the end of the last five quarters
[7] Period of 1st January - 14th March 2021 compared to the same period of 2020
[8] Excluding VAT
[9] LTI - Long-Term Incentive Program
[10] Inventory turnover days = ((inventories as of 31.12.2020 + inventories as of 31.03.2021)/2/cost of goods sold for 1Q 2021) x 90 -----------------------------------------------------------------------------------------------------------------------
ISIN: US55953Q2021 Category Code: MSCU TIDM: MGNT LEI Code: 2534009KKPTVL99W2Y12 OAM Categories: 2.2. Inside information Sequence No.: 101864 EQS News ID: 1190292 End of Announcement EQS News Service =------------------------------------------------------------------------------------ Image link: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1190292&application_name=news
(END) Dow Jones Newswires
April 29, 2021 03:00 ET (07:00 GMT)
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