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.
=----------------------------------------------------------------------------------------------------------------------
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%
(MORE TO FOLLOW) Dow Jones Newswires
July 29, 2021 02:59 ET (06:59 GMT)
DJ Magnit reports 9.6% total sales growth, 5.2% LFL -2-
Supermarkets -6.5% 9.1% 2.0% 2.5% -1.8% 0.7%
Drogerie Stores -0.7% 6.2% 5.5% 5.5% -0.6% 4.9%
Trading Performance
4.6%
Total sales in 2Q 2021 grew by 9.6% y-o-y to RUB 424.3 billion. Net retail sales grew by 9.1% y-o-y,
LTM sales driven by a combination of 6.3% selling space growth and 5.2% LFL sales growth.
density[6]
improvement
y-o-y
Net retail sales growth continued to outpace selling space growth on further improvement of sales
densities. Overall sales densities in 2Q 2021 improved by 1.0% q-o-q and 4.6% y-o-y while in the
Company's main convenience store format these improved by 5.9% y-o-y.
LFL sales growth accelerated from 4.1% in the previous quarter to 5.2% in 2Q 2021 predominantly driven by
the strong performance of mature stores. 107 stores entered LFL in 2Q (including 41 convenience stores,
65 drogeries and 1 supermarket). Only 7% of Magnit's selling space is currently in the 'ramp-up' phase
with 93% already matured.
93% In the reported quarter the structure of LFL sales growth has changed compared to five previous
consecutive quarters. Strong LFL traffic growth driven by firstly inflow of new unique customers and then
of selling by rising visit frequency, became the main contributor. Magnit continued gaining customers from
space is traditional retail and other market players. This comparable performance peaked in end-March and started
already easing since April, resulting in 10.0% LFL traffic growth vs 9.4% decline in 1Q 2021.
matured
LFL average ticket decreased by 4.4% due to the strong comparable performance. The only contributor to
the reduction in average ticket was a reduction of the average number of items per basket as consumer
behavior started normalizing after abnormal patterns and strong forward buying during periods of
lockdown. After its peak in February, on-shelf price inflation corrected slightly and stabilised in the
second quarter. Ongoing trading up was another positive driver of the ticket growth. These effects were
observed in the beginning of the reported quarter with gradual normalization month-on-month, leading to
both positive LFL traffic and ticket development in June supported by trading up and healthy inflation.
10.0%
A decline in the overall average ticket in April-May was again a result of a strong performance during
lfl traffic the prior period, however from June growth returned combined with positive y-o-y growth of customer
growth in 2Q visits (see Appendix).
2021
Acceleration of revenue and LFL sales growth versus the previous quarter was delivered despite
promotional share as a % of sales remaining flat compared to the previous quarter and was up y-o-y due to
weaker comparatives, normalizing shopping patterns and efficient seasonal promotional campaigns supported
by favorable weather conditions and the timing of the domestic tourist season.
50 mln During the reported quarter the number of active loyalty card users exceeded 50 million. Company-wide,
the share of tickets using the loyalty card was 50% with sales penetration of 65%. The loyalty program
of loyalty continues to deliver positive cross-format gains with sustainable growth of customers visiting 2+ store
program formats (41% of Magnit customer base at the end of the reporting period).
active users
Store Network Development and Performance by Format
The convenience segment generated 78.4% of total net retail sales in the reported quarter. In 2Q 2021
78.4% Magnit accelerated its expansion program both q-o-q and y-o-y and opened (gross) 308 convenience
stores (94 in 2Q 2020). The Company continued its efficiency campaign and closed 58 convenience
of total net stores vs 107 store closures in 2Q 2020. As a result, Magnit added 250 stores (net) during the
retail sales reported quarter. The selling space growth of convenience stores accelerated to 6.4% y-o-y. Sales in
generated by the convenience format grew by 9.7% driven by LFL sales growth of 5.7% and selling space growth of
convenience 6.4%. LFL average ticket growth was negative and stood at -4.4% against strong comparatives. LFL
segment traffic increased 10.5%, overcompensating negative LFL average ticket growth.
Supermarkets generated 12.5% of the Group's net retail sales in the reported quarter. During 2Q 2021
12.5% the Company opened one supermarket and closed three stores. Redesign program is gaining traction with
24 supermarkets being refurbished in 1H 2021 vs 5 in 1H 2020. The pace of redesign in the 2H 2021 is
of total net expected to remain intact. Selling space across this format remained almost flat y-o-y. LFL sales
retail sales growth reached 2.0% vs -0.7% in the previous quarter, driven by strong LFL traffic recovery to 9.1%.
generated by As a result, net retail sales growth of supermarkets improved to 3.0% in the reported quarter.
supermarkets
The share of drogerie format as a proportion of the total net retail sales increased to 8.5% in the
8.5% reported quarter vs 8.1% a year ago. During 2Q 2021 Magnit opened (net) 196 cosmetics stores and
added 40 thousand sq. m. of selling space, delivering a 11.2% y-o-y increase in selling space, the
of total net highest across all formats. Driven by this increase in selling space and LFL sales growth of 5.5%,
retail sales sales grew 14.1% representing again the strongest performance across all Magnit's store formats. LFL
generated by average ticket growth was slightly negative at -0.7% well compensated by 6.2% LFL traffic growth.
drogerie
During 2Q 2021 Magnit continued its renovation program and redesigned 131 convenience stores and 12
supermarkets resulting in the combined share of refurbished and new stores at: 74% for convenience
stores, 34% for supermarkets and 59% for the drogerie format.
E-commerce
Magnit has been testing e-commerce services since the second half of 2020. The Company currently runs
a number of online delivery projects, both independently and in cooperation with partners (express
delivery, regular delivery, e-pharma, cosmetics and partnerships).
Magnit fulfils around 15,000 orders a day. The run rate for Magnit's online channel stands at RUB 7.6
billion based on the last week of June.
7.6 Average ticket for Magnit's own delivery service is c. RUB 1,200 including VAT which is approx. 3.4
times higher than in the convenience stores (RUB 353 including VAT in 2Q 2021). This is mostly due to
RUB billion a larger number of items per basket.
annual GMV
runrate
Magnit's e-commerce services today cover over 2,000 stores in 62 regions and 106 cities, with 61% of
the current revenue generated outside Moscow and St. Petersburg. By the end of 2021, the Company
plans to have over 4,000 stores across all formats covered by e-commerce services including Magnit's
own delivery and partnerships in more than 50 regions across Russia. Financial Results for 2Q and 1H 2021 (IAS 17)
RUB mln 2Q 2021 2Q 2020 Change 1H 2021 1H 2020 Change
Total Revenue 424,341 387,323 9.6% 822,230 763,361 7.7%
Retail 413,693 379,174 9.1% 801,592 743,959 7.7%
Wholesale 10,648 8,149 30.7% 20,638 19,403 6.4%
Gross Profit 99,501 94,337 5.5% 192,571 179,522 7.3%
Gross Margin, % 23.4% 24.4% -91 bps 23.4% 23.5% -10 bps
SG&A, % of Sales -20.4% -20.4% -2 bps -20.4% -20.5% 4 bps
EBITDA pre LTI[7] 30,600 30,482 0.4% 58,603 53,570 9.4%
EBITDA Margin pre LTI, % 7.2% 7.9% -66 bps 7.1% 7.0% 11 bps
EBITDA 30,250 30,476 -0.7% 57,928 53,220 8.8%
EBITDA Margin, % 7.1% 7.9% -74 bps 7.0% 7.0% 7 bps
EBIT 17,739 18,676 -5.0% 34,695 30,137 15.1%
EBIT Margin, % 4.2% 4.8% -64 bps 4.2% 3.9% 27 bps
Net Finance Costs -2,790 -3,497 -20.2% -5,371 -7,274 -26.2%
FX Gain/ (Loss) 634 1,005 -36.9% 444 -824 -153.9%
Profit before Tax 15,583 16,185 -3.7% 29,768 22,039 35.1%
Taxes -3,509 -3,342 5.0% -6,820 -4,995 36.5%
Net Income 12,073 12,843 -6.0% 22,948 17,044 34.6%
Net Income Margin, % 2.8% 3.3% -47 bps 2.8% 2.2% 56 bps
For 2Q and 1H 2021 financial results in accordance with IFRS 16 - see Appendix
23.4%
Gross margin
in 2Q 2021
Total revenue in 2Q 2021 increased by 9.6% driven by net retail sales growth by 9.1% and wholesale
revenue increase by 30.7%. Wholesale operations accounted for 2.5% of total sales on the back of recovery
of HORECA consumption.
Gross Profit in 2Q 2021 increased by 5.5% y-o-y to RUB 99.5 billion with a margin of 23.4% as a result of
better promotional margin, lower shrinkage and favorable format mix. This was partially offset by
slightly higher supply chain costs and higher penetration of Magnit's loyalty program. Format mix
positively impacted gross margin, with the share of Magnit's high-margin drogerie business growing to
(MORE TO FOLLOW) Dow Jones Newswires
July 29, 2021 02:59 ET (06:59 GMT)
DJ Magnit reports 9.6% total sales growth, 5.2% LFL -3-
8.5% in 2Q 2021 partly offset by the increase of wholesale operations. Promotional intensity was slightly
higher y-o-y due to weal comparatives and normalizing shopping patterns, with different consumption
26 bps trends (including forward buying of dry food) in the same quarter of the last year. This resulted in a
gross profit margin reduction of 91 bps y-o-y, reflecting a strong comparative performance during the
y-o-y prior year, and one-off effects of the last year comparable period.
reduction of
shrinkage
Supply chain costs grew y-o-y due to a continued increase of on-shelf availability and higher
transportation costs driven by the increase in container shipping tariffs in the international and
domestic markets.
Alongside the growing share of fresh products and overall improvement of on-shelf availability, shrinkage
as a proportion of sales decreased further by 26 bps y-o-y. This was driven by ongoing optimization of
supply chain processes, renegotiation of quality standards with suppliers and other initiatives.
SG&A costs were controlled and remained almost flat y-o-y as a percent of sales (20.4%). This was
achieved as a result of lower rent costs and depreciation, partially offset by higher marketing costs and
negatively impacted by stores in the 'ramp up' phase.
Advertising expenses increased by 26 bps y-o-y on higher marketing activities including digital marketing
and loyalty campaigns.
Rental costs as a percent of sales decreased by 15 bps y-o-y driven by higher sales density, improved
lease terms with landlords and the closing of inefficient stores. This was achieved despite the increased
share of leased selling space to 78.7% in 2Q 2021 vs 77.4% a year ago.
Despite the acceleration in store openings (which started in 4Q last year) and their 'ramp-up' period,
depreciation as a percent of sales reduced by 10 bps y-o-y as most of the newly opened stores were
leased.
Personnel costs as a percent of sales decreased by 7 bps y-o-y thanks to continued productivity
improvements and on-going automation of business processes.
Repair and maintenance costs as a percent of sales increased by 6 bps y-o-y driven by acceleration of the
store refurbishment program (143 stores were refurbished in 2Q 2021 vs 19 in 2Q 2020)
Other costs including utilities, packaging and raw materials, bank and tax expenses remained broadly flat
as a percent of sales y-o-y.
As a result, EBITDA was RUB 30.3 billion with a 7.1% margin, driven by 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 7.2%. EBITDA margin for the 1H 2021 was 7.0% with y-o-y improvement of 7 bps.
The Company increased its total debt by 97.3 billion in the reported quarter by means of long-term bank
loans and bond issuance to finance accelerated expansion and the upcoming acquisition of the Dixy retail
chain. This increase happened during the period of growing market rates. As a result, average cost of
debt increased to 6.4% (12 bps y-o-y or 49 bps q-o-q). Higher cost of debt and total amount of borrowings
7.1% were netted by the increase in interest income. This led to the decrease of net finance costs in 2Q 2021
by 20.2% (or 25 bps) y-o-y to RUB 2.8 billion. The Company's debt profile improved further through an
ebitda margin increased share of long-term borrowings and record long debt maturity of 24 months (vs 21 months a
in 2Q 2021 quarter ago).
In 2Q 2021 the Company reported FX gain in the amount of RUB 0.6 billion related to direct import
operations.
Income tax in 2Q 2021 was RUB 3.5 billion. Effective tax rate stood at 22.5%.
As a result, net income in 2Q 2021 decreased by 6.0% y-o-y and stood at RUB 12.1 billion. Net income
margin decreased by 47 bps y-o-y to 2.8%. Net income for 1H 2021 grew by 34.6% with a margin improvement
of 56 bps to 2.8%.
2.8%
Net income
margin
in 2Q 2021 Financial Position Highlights (IFRS 16)
RUB mln 30.06.2021 31.12.2020 30.06.2020
Inventories 199,744 205,949 219,236
Trade and other receivables 12,329 8,564 9,949
Cash and cash equivalents 129,370 44,700 21,149
Long-term borrowings 222,930 147,695 117,389
Trade and other payables 165,973 184,325 138,461
Short-term borrowings and short-term portion of long-term borrowings 42,560 18,392 91,204
Despite ongoing improvement to on-shelf availability, the 38 bps increase of share of drogerie format as
a percent of net retail sales, supplier inflation and total sales growth of 9.6%, inventories decreased
11.2 by RUB 19.5 billion vs June 30, 2020 and stood at 199.7 billion. This was driven by a number of projects
launched in 2020 including the reduction of slow-moving items, assortment harmonization and IT solutions
DAYS aimed at better on-shelf availability and promotion forecasting.
y-o-y
optimisation
of Trade and other payables grew by RUB 27.5 billion vs June 30, 2020 and stood at RUB 166.0 billion driven
inventories by higher sales and increased payment days. Accounts receivables increased by RUB 2.4 billion vs June 30,
[8] 2020 and stood at RUB 12.4 billion due to higher sales and improved commercial terms with suppliers.
Debt Composition and Leverage
June 30, 2021 March 31, 2021 December 31, 2020 June 30, 2020
IAS 17
Total Debt, RUB billion 265.5 168.2 166.1 208.6
Long-Term Debt 222.9 144.0 147.7 117.4
Short-Term Debt 42.6 24.2 18.4 91.2
Net Debt, RUB billion 136.1 161.7 121.4 187.4
Net Debt/EBITDA 1.2x 1.4? 1.1? 2.0?
IFRS 16
Net Debt, RUB billion 498.9 522.8 479.0 538.8
Net Debt/EBITDA 2.7x 2.8x 2.7x 3.3
Gross Debt increased by 57.8% within the reported quarter on the back of additional borrowings to finance
accelerated expansion and the acquisition of the Dixy retail chain and reached RUB 265.5 billion as at
June 30, 2021. Cash position substantially increased to RUB 129.4 billion as at June 30, 2021 compared to
RUB 6.6 billion as at March 31, 2021. As a result, Net Debt decreased by 15.8% q-o-q to RUB 136.1 billion
as at June 30, 2021.
1.2x
net debt/ The Company's debt is fully RUB denominated, matching revenue structure. The Net Debt to EBITDA ratio was
ebitda 1.2x as at June 30, 2021 vs 1.4x as at March 31, 2021.
as of June
30, 2021
(IAS 17) Capex in 2Q 2021 more than tripled y-o-y and stood at RUB 17.2 billion. This was driven by the
acceleration of expansion program (519 store openings on gross basis in 2Q 2021 vs 177 in 2Q 2020). Total
capital expenditures for the first six months of 2021 stood at RUB 25.6 billion vs RUB 12.3 billion in 1H
2020 (up 2.0x y-o-y). Capex is expected to increase further in the second half of the year in line with
the calendarization of the store opening and redesign process with the latter accelerating further in the
second half of the year.
DIXY Acquisition
On July 22, 2021 Magnit completed the acquisition of DIXY retail chain with 2,477 stores in Russia (2,438
convenience stores under the DIXY brand and 39 superstores under the Megamart brand). The majority of the
convenience stores are located in Moscow and the Moscow region (1,319 outlets) and in St. Petersburg and
the Leningrad region (438 outlets). As part of the transaction Magnit has also acquired five distribution
centers and a fleet of approx. 700 trucks. The purchase price at closing amounted to Rub 87.6 bn.
The acquisition of the DIXY retail business is expected to significantly strengthen Magnit's competitive
2,477 position in the Russian food retail sector. Strong exposure to the strategically important Moscow and
St.Petersburg regions will lead to a sharp increase in the Company's market positions in both capitals,
stores added including more than two-fold market share growth in both Moscow and St.Petersburg. Strong physical
after dixy presence in Moscow and St.Petersburg will provide substantial support to further development of Magnit's
acquisition e-grocery initiatives. Potential synergies in procurement, category management and various business
processes are expected to benefit the Company's customers and provide value accretion for its
shareholders.
The transaction has been approved by Magnit's Board of Directors on May 18, 2021[9]. Russia's Federal
Antimonopoly Service announced its clearance to the transaction on July 15, 2021.
(MORE TO FOLLOW) Dow Jones Newswires
July 29, 2021 02:59 ET (06:59 GMT)
DJ Magnit reports 9.6% total sales growth, 5.2% LFL -4-
More information is available at https://www.magnit.com/en/media/press-releases/magnit-completes-acqusition-of-dixy/ FY 2021 Guidance
Magnit confirms its full year store opening, redesign and capex guidance published on February
4th, 2021.
2,000 In 2021 Magnit plans to open around 2,000 stores of different format on a gross basis as part
of its organic expansion and redesign about 700 stores. Capital expenditures is expected to be
stores on gross basis approximately RUB 60-65 billion[10].
to be opened by magnit
organically in 2021 Based on further detailed analysis of the performance of newly acquired Dixy stores, respective
instruction of the Federal Antimonopoly Service[11] and overlap with existing network, the
Company may potentially take a decision to slightly adjust its organic store opening program in
the respective regions. It is expected that any adjustment will not lead to material impact on
the Company's development plans.
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:
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 June 30, 2021, Magnit operated 39
distribution centers and 22,344 stores (15,348 convenience, 469 supermarkets and 6,527 drogerie stores)
in 3,802 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the unaudited IFRS 16 management accounts results for 1H 2021, Magnit had revenues of
RUB 822.2 billion and an EBITDA of RUB 94.4 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.
APPENDIX 2Q and 1H 2021 Store Openings
2Q 2021 2Q 2020 Change Change, % 1H 2021 1H 2020 Change Change, % Store Openings (Gross) 519 177 342 193.2% 926 498 428 85.9% Convenience Stores 308 94 214 227.7% 549 239 310 129.7% Supermarkets 1 1 0 0.0% 2 1 1 100.0% Drogerie Stores 210 82 128 156.1% 375 258 117 45.3% Store Closures 75 143 -68 -47.6% 146 329 -183 -55.6% Convenience Stores 58 107 -49 -45.8% 112 280 -168 -60.0% Supermarkets 3 1 2 200.0% 3 2 1 50.0% Drogerie Stores 14 35 -21 -60.0% 31 47 -16 -34.0% 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%
2Q 2021 Monthly Operating Results
April Change May Change June Change Total net retail sales, RUB million 135,377 8.4% 139,472 9.3% 138,844 9.6% Convenience Stores 106,195 7.8% 109,283 10.1% 108,998 11.2% Supermarkets 17,315 4.1% 17,423 3.4% 16,774 1.6% Drogerie Stores 10,954 22.3% 11,972 12.7% 12,314 9.0% Other formats 913 5.1% 794 -3.0% 758 -8.1% Number of tickets, million 401 19.2% 421 14.4% 421 8.6% Convenience Stores 339 19.3% 356 15.1% 356 9.2% Supermarkets 28 18.0% 29 10.3% 28 2.8% Drogerie Stores 31 21.3% 34 12.9% 34 10.0% Other formats 2.4 -4.4% 2.2 -10.7% 2.1 -16.8% Average ticket[12], RUB 337 -9.1% 332 -4.4% 330 0.9% Convenience Stores 313 -9.6% 307 -4.4% 306 1.8% Supermarkets 613 -11.8% 601 -6.2% 593 -1.2% Drogerie Stores 351 0.8% 357 -0.2% 359 -0.9% Other formats 354 6.2% 353 9.3% 360 12.3% Number of Stores (EOP) 21,981 n/a 22,099 n/a 22,344 n/a Convenience Stores 15,159 n/a 15,218 n/a 15,348 n/a Supermarkets 469 n/a 469 n/a 469 n/a Drogerie Stores 6,353 n/a 6,412 n/a 6,527 n/a Store Openings (Gross) 107 n/a 141 n/a 271 n/a Convenience Stores 77 n/a 78 n/a 153 n/a Supermarkets 0 n/a 1 n/a 0 n/a Drogerie Stores 30 n/a 62 n/a 118 n/a Store Closures 26 n/a 23 n/a 26 n/a Convenience Stores 16 n/a 19 n/a 23 n/a Supermarkets 2 n/a 1 n/a 0 n/a Drogerie Stores 8 n/a 3 n/a 3 n/a Store Openings (Net) 81 n/a 118 n/a 245 n/a Convenience Stores 61 n/a 59 n/a 130 n/a Supermarkets -2 n/a 0 n/a 0 n/a Drogerie Stores 22 n/a 59 n/a 115 n/a Total Selling Space (EOP), th. sq. m. 7,631 4.7% 7,669 5.2% 7,748 6.3% Convenience Stores 5,194 4.8% 5,220 5.3% 5,275 6.4% Supermarkets 941 -0.2% 943 0.0% 943 -0.1% Drogerie Stores 1,465 9.0% 1,477 9.4% 1,500 11.2% Other formats 31 -23.2% 30 -26.4% 30 -26.9% Selling Space Added (Net), th. sq. m. 24.9 n/a 38.1 n/a 79.4 n/a Convenience Stores 24.8 n/a 25.5 n/a 55.9 n/a Supermarkets -2.1 n/a 1.6 n/a 0.0 n/a Drogerie Stores 4.9 n/a 12.0 n/a 23.5 n/a Other formats -2.8 n/a -0.9 n/a 0.0 n/a Financial Results for 2Q and 1H 2021 (IFRS 16) RUB mln 2Q 2021 2Q 2020 Change 1H 2021 1H 2020 Change Total Revenue 424,341 387,323 9.6% 822,230 763,361 7.7% Retail 413,693 379,174 9.1% 801,592 743,959 7.7% Wholesale 10,648 8,149 30.7% 20,638 19,403 6.4% Gross Profit 99,513 94,337 5.5% 192,586 179,522 7.3% Gross Margin, % 23.5% 24.4% -91 bps 23.4% 23.5% -9 bps SG&A, % of Sales -18.8% -19.0% 15 bps -18.9% -19.1% 15 bps EBITDA pre LTI[13] 49,586 48,138 3.0% 95,038 88,194 7.8% EBITDA Margin pre LTI, % 11.7% 12.4% -74 bps 11.6% 11.6% 1 bps EBITDA 49,236 48,133 2.3% 94,363 87,845 7.4% EBITDA Margin, % 11.6% 12.4% -82 bps 11.5% 11.5% -3 bps EBIT 25,947 25,365 2.3% 49,107 42,772 14.8% EBIT Margin, % 6.1% 6.5% -43 bps 6.0% 5.6% 37 bps Net Finance Costs -10,438 -11,118 -6.1% -20,601 -22,994 -10.4% FX Gain/ (Loss) 666 1,097 -39.3% 454 -920 -149.4% Profit before Tax 16,175 15,344 5.4% 28,959 18,858 53.6% Taxes -3,629 -3,174 14.3% -6,660 -4,359 52.8% Net Income 12,546 12,170 3.1% 22,300 14,500 53.8% Net Income Margin, % 3.0% 3.1% -19 bps 2.7% 1.9% 81 bps -----------------------------------------------------------------------------------------------------------------------
[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
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