DJ Magnit reports 9.6% total sales growth, 5.2% LFL sales growth and 7.1% EBITDA margin in 2Q 2021
MAGNIT PJSC (MGNT)
Magnit reports 9.6% total sales growth, 5.2% LFL sales growth and 7.1% EBITDA margin in 2Q 2021
29-Jul-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 9.6% total sales growth, 5.2% LFL Sales Growth and 7.1% EBITDA margin in 2Q 2021
Krasnodar, Russia (July 29, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers,
announces its 2Q and 1H 2021 operational and unaudited financial results.
2Q 2021 Key Operational and Financial Highlights
- Total revenue increased by 9.6% y-o-y to RUB 424.3 billion;
9.6% - Net retail sales reached RUB 413.7 billion increasing 9.1% y-o-y;
- LFL[1] sales growth of 5.2% driven by 10.0% traffic growth and 4.4% reduction in average ticket;
TOTAL REVENUE
growth
- The Company opened 519 stores on gross basis (308 convenience stores, one supermarket and 210
drogeries). As part of the Company's ongoing efficiency improvement campaign, 75 stores were closed
5.2% resulting in a net store addition of 444. As of June 30, 2021 the total store base was 22,344;
- Selling space increase of 142 thousand sq. m. bringing total selling space to 7,748 thousand sq. m.
lfl sales (6.3% y-o-y growth);
growth - The Company redesigned 143 stores (131 convenience stores and 12 supermarkets). As at June 30, 2021,
74% of convenience stores, 34% of supermarkets and 59% of drogeries are either new or refurbished;
- Gross profit increased by 5.5% y-o-y to RUB 99.5 billion with a margin of 23.4% as a result of better
promo margin, lower shrinkage and favorable format mix partially offset by slightly higher supply
chain costs and promotional share;
7.1% - EBITDA was RUB 30.3 billion with a 7.1% margin driven by gross margin dynamics and strict cost
control;
EBITDA margin - Net income of RUB 12.1 billion with a margin of 2.8%.
"Despite the strong comparable performance last year we delivered a very good set of results for the
« second quarter. Sales growth accelerated across all formats, underpinned by further growth in LFL sales
and rapid expansion. I am pleased to see mature stores as a key driver of these improvements.
Consumer behavior and shopping patterns are now normalizing. Since June we have seen healthy LFL
performances, with positive ticket and traffic development. Magnit continues gaining market share, and
our engagement with existing customers is positive, reflected by increased frequency, increased spend per
visit and 'trading up' behaviours.
In delivering a 7.1% EBITDA margin with sustainable q-o-q improvement we are on track to perform in line
with our strategy both this year and beyond, having already made excellent progress as evidenced by
Jan Dunning improvements across margin and working capital cycle as well as very comfortable levels of leverage
already achieved.
Magnit's
President
and CEO Continuous improvement of sales densities, sustainable margins, better cash generation and flexible
financial position allowed us to speed up organic expansion and take advantage of a unique and
value-accretive M&A opportunity through the acquisition of Dixy. This is a strategically important
transaction for Magnit that dramatically changes our market positioning. Integration of such large
business and extraction of synergies will, of course, take time and effort, however, our ambitious
long-term targets remain unchanged and may be achieved even a bit earlier".
»
50
RUB billion
total amount
of dividends
announced
for 2020
Key events in 2Q 2021 and after the Reported Period
- Magnit completed its strategic acquisition of the DIXY retail chain comprising 2,477 stores in Russia
significantly strengthening competitive positions in the Moscow and St. Petersburg markets;
- A new Board of Directors consisting of nine members, including five independent non-executive
directors, were elected at the Company's AGM. For the fourth consecutive year Charles Ryan was
elected a Chairman of the Board of Directors;
- The Board called an EGM with a view to increasing the size of the Board of Directors from 9 to 11
members;
- Magnit announced FY 2020 dividends of c. RUB 25 billion or RUB 245.31 per one ordinary share bringing
the total dividend payment to RUB 50 billion (RUB 490.62 per ordinary share), which is 61% higher
than in the previous year;
- Two issues of the exchange-traded bonds in a value of RUB 10 billion each with an interest rate of
7.05% per annum were placed on MoEx. Analytical Credit Rating Agency ACRA assigned credit rating AA
(RU) to each bond issue;
- Magnit increased its discounter pilot to 76 stores and reported 20-30% LFL sales growth across
discounter stores converted from convenience stores;
- Magnit continued developing its super app and became the first retailer in Russia to introduce a
Credit Broker online service;
- Magnit launched its own delivery service from Magnit Cosmetic stores and superstores across numerous
regions;
- Magnit and Wildberries launched express delivery partnership.
76
hard
disounters in
operation
2Q and 1H 2021 Operating Results
Retail Sales
2Q 2021 2Q 2020 Change Change, % 1H 2021 1H 2020 Change Change, %
Total Net Retail Sales, million RUB 413,693 379,174 34,519 9.1% 801,592 743,959 57,634 7.7%
Convenience Stores[2] 324,476 295,796 28,680 9.7% 624,418 575,591 48,827 8.5%
Supermarkets[3] 51,513 49,992 1,521 3.0% 101,628 100,955 673 0.7%
Drogerie Stores 35,240 30,876 4,365 14.1% 70,252 62,282 7,970 12.8%
Other Formats[4] 2,464 2,511 -47 -1.9% 5,295 5,131 163 3.2%
Number of Tickets, mln 1,243 1,092 151 13.8% 2,346 2,287 59 2.6%
Convenience Stores 1,051 920 132 14.3% 1,974 1,922 52 2.7%
Supermarkets 86 78 8 10.0% 164 168 -3 -2.0%
Drogerie Stores 99 87 12 14.4% 193 181 12 6.5%
Other Formats 7 7 -1 -10.6% 14 16 -1 -9.3%
Average Ticket[5], RUB 333 347 -14 -4.2% 342 325 16 5.0%
Convenience Stores 309 322 -13 -4.0% 316 300 17 5.6%
Supermarkets 602 643 -41 -6.4% 618 602 17 2.8%
Drogerie Stores 356 356 -1 -0.2% 364 344 20 5.9%
Other Formats 356 326 30 9.2% 357 315 42 13.3% Stores and Selling Space
2Q 2021 2Q 2020 Change Change, % 1H 2021 1H 2020 Change Change, %
Number of Stores (EOP) 22,344 20,894 1,450 6.9% 22,344 20,894 1,450 6.9%
Convenience Stores 15,348 14,581 767 5.3% 15,348 14,581 767 5.3%
Supermarkets 469 472 -3 -0.6% 469 472 -3 -0.6%
Drogerie Stores 6,527 5,841 686 11.7% 6,527 5,841 686 11.7%
Store Openings (Net) 444 34 410 n/a 780 169 611 361.5%
Convenience Stores 250 -13 263 n/a 437 -41 478 n/a
Supermarkets -2 0 -2 n/a -1 -1 0 0.0%
Drogerie Stores 196 47 149 317.0% 344 211 133 63.0%
Total Selling Space (EOP), th. sq.m 7,748 7,290 458 6.3% 7,748 7,290 458 6.3%
Convenience Stores 5,275 4,956 320 6.4% 5,275 4,956 320 6.4%
Supermarkets 943 944 -1 -0.1% 943 944 -1 -0.1%
Drogerie Stores 1,500 1,350 151 11.2% 1,500 1,350 151 11.2%
Other formats 30 41 -11 -26.9% 30 41 -11 -26.9%
Selling Space Addition (Net), th. sq.m 142 14 129 n/a 252 52 200 n/a
Convenience Stores 106 4 102 n/a 186 4 182 n/a
Supermarkets -1 -3 3 n/a 1 -5 6 n/a
Drogerie Stores 40 11 29 n/a 72 47 25 n/a
Other formats -4 2 -5 n/a -8 5 -13 n/a 2Q and 1H 2021 LFL Results
2Q 2021 1H 2021
Average Ticket Traffic Sales Average Ticket Traffic Sales
Total -4.4% 10.0% 5.2% 4.7% 0.0% 4.7%
Convenience Stores -4.4% 10.5% 5.7% 5.1% 0.2% 5.3%
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