DJ Magnit Reports 33.7% total sales growth (14.6% adjusted for dixy acquisition), 9.9% LFL Sales Growth and 7.4% EBITDA margin in 4Q 2021
MAGNIT PJSC (MGNT) Magnit Reports 33.7% total sales growth (14.6% adjusted for dixy acquisition), 9.9% LFL Sales Growth and 7.4% EBITDA margin in 4Q 2021 04-Feb-2022 / 09:00 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.
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Magnit Reports 33.7% total sales growth (14.6% adjusted for dixy acquisition), 9.9% LFL Sales Growth and 7.4% EBITDA margin in 4Q 2021 Krasnodar, Russia (February 4, 2022): Magnit PJSC (MOEX and LSE: MGNT; Magnit, the Company), one of Russia's leading retailers, announces its 4Q and 12M 2021 operational and unaudited financial results.
4Q 2021 Key Operational and Financial Highlights
-- Total revenue increased by 33.7% y-o-y to RUB 544.6 billion. Total revenue adjusted for the
Dixy acquisition increased by 14.6%;
33.7% -- Net retail sales reached RUB 530.7 billion increasing 34.3% y-o-y. Net retail sales growth
adjusted for the Dixy acquisition was 15.6%;
TOTAL REVENUE -- LFL[1] sales growth of 9.9% driven by 10.7% average ticket growth and 0.7% LFL traffic
growth decline;
-- The Company opened 834 stores on a gross basis (565 Magnit and 9 Dixy convenience stores,
256 drogeries and 4 supermarkets). As part of the Company's ongoing efficiency driving campaign, 72
stores were closed resulting in a net addition of 762 stores. As of December 31, 2021 the total store
9.9% base was 26,077;
-- Selling space increase of 273 thousand sq. m., bringing total selling space to 8,997
lfl sales thousand sq. m. (20.0% y-o-y growth);
growth -- The Company redesigned 315 stores under Magnit brand (279 convenience stores, 28
supermarkets and 8 drogeries). As at December 31, 2021, 78% of convenience stores, 45% of
supermarkets and 62% of drogeries are either new or refurbished;
-- Gross Profit increased by 38.1% y-o-y to RUB 131.3 billion. Gross margin increased by 77
bps y-o-y to 24.1% as a result of improved commercial terms, lower supply chain costs, smarter
promotions and a favorable format mix;
7.4%
-- EBITDA was RUB 40.2 billion with a 7.4% margin - an improvement of 36 bps y-o-y and 21 bps
EBITDA margin q-o-q driven by strong gross margin dynamics;
-- Net income increased by 36.4% y-o-y to RUB 15.2 billion with a margin of 2.8%.
FY 2021 Key Operational and Financial Highlights
-- Total revenue increased by 19.5% y-o-y to RUB 1,856.1 billion. Total revenue adjusted for
the Dixy acquisition increased by 10.8%;
19.5% -- Net retail sales reached RUB 1,807.8 billion increasing 19.7% y-o-y. Net retail sales
growth adjusted for the Dixy acquisition was 11.3%;
TOTAL REVENUE -- LFL1 sales growth of 7.0% driven by 7.1% average ticket growth and 0.1% LFL traffic
growth decline;
-- Materially exceeded full year organic store opening guidance. The Company opened 2,295
stores on gross basis (1,450 Magnit and 14 Dixy convenience stores, 825 drogeries and 6
supermarkets). As part of the Company's ongoing efficiency improvement campaign, 259 stores were
2,295 closed resulting in a net store addition of 2,036. As of December 31, 2021 the total store base was
26,077;
stores opened -- Selling space increase of 708 thousand sq. m. and addition of 793 thousand sq. m. as a
(gross) result of the Dixy acquisition, bringing total selling space to 8,997 thousand sq. m. (20.0% y-o-y
growth);
-- Met full year guidance on the number of store redesigns. The Company redesigned 703 stores
under Magnit brand (611 convenience stores, 74 supermarkets and 18 drogeries);
-- Gross profit increased by 20.1% y-o-y to RUB 439.2 billion. Gross profit margin stood at
23.7%;
7.2%
EBITDA margin
-- EBITDA was RUB 133.1 billion with a 7.2% margin - an improvement of 13 bps y-o-y as a
result of stronger gross margin but partially offset by Dixy consolidation;
-- Net income increased by 36.8% y-o-y to RUB 51.7 billion with a margin of 2.8% vs 2.4% a
year ago.
«
"We are delighted with Magnit's performance in 2021, a year in which we delivered significant progress
against our strategy. In July we completed the strategically important acquisition of Dixy, adding
another 2,500 stores to our network and strengthening our overall market position. We accelerated our
organic expansion and opened almost 2,300 stores - above our original guidance - alongside redesigning a
further 700 stores.
Jan Dunning
We delivered market leading LFL sales growth in every quarter, resulting in continued sales density
Magnit's improvement in our mature stores. Total sales growth driven by same-store sales and then additional
President selling space reached 33.7%.
and CEO
We have already made good progress with the integration of Dixy and have successfully extracted first
portion of synergies and achieved further margin improvements for the combined business - 7.4% EBITDA
margin in the quarter and 7.2% for the full year. This gives us confidence in our ability to achieve our
ambitious long-term growth targets.
Our recently launched e-commerce sales channel has gained traction, achieving RUB 11 bn Gross Merchandise
Value for the full year with more than 100,000 orders carried out daily at the end of December.
We continued to develop our 'My Price' discounter concept and today have over 200 stores in operation
delivering encouraging results. In 2022 we plan to add hundreds of stores of this format and will
continue developing our quality value-for-money offering.
We have recorded another set of working capital optimization which turned negative for the first time in
the history with RUB 18.5 billion cash release.
We ended 2021 in an extremely strong financial position. Leverage reduced to a comfortable level of 1.5x,
a very good result given the acceleration of our store roll-out and acquisition of Dixy. Cash generation
from operations increased, and, combined with further improvements in working capital, resulted in a
healthy free cash flow position. As a result, we are pleased to be able to pay an increased dividend
distribution to shareholders for the first nine months 2021, representing a 20% year-on-year growth".
»
30
Key events in 4Q 2021 and after the Reported Period
RUB billion
-- Magnit distributed dividends for 9M 2021 in the total amount of c. RUB 30 billion or RUB
dividends 294.37 per one ordinary share;
distributed -- S&P Global Ratings upgraded Magnit's credit rating to "BB+" level;
-- Magnit has reached an agreement for the long-term leasehold rights for the 56 stores
for 9M 2021 operating under the Edelweiss brand in Kazan and 58 Radezh stores in Volgograd;
-- Magnit and Wildberries rolled out express delivery of goods from convenience stores to new
regions and launched a pickup service for alcohol;
-- Magnit and Delivery Club have launched thirty-minute express grocery delivery;
-- Magnit fulfilled over 100,000 online orders in one day in the lead-up to the New Year on
December 30, 2021;
-- Magnit has launched a pharmacy dark store;
-- The Company has started implementing AI-powered customer offering personalization;
-- Magnit has begun construction of the greenhouses for growing strawberries and blueberries.
Consolidation of the Dixy business and changes to the reporting standards
Magnit completed the acquisition of the Dixy retail business on July 22, 2021, and subsequent performance of Dixy has been consolidated into Magnit's results. Sales and operating results of the stores under the Dixy brand are reported separately, and growth metrics will be published starting from 3Q 2022. Dixy stores are not included in the LFL panel; this will begin after full 12 months of operations following consolidation. The Dixy retail business does not form a separate segment - Magnit will continue reporting consolidated financial results for the Group. 4Q and FY 2021 Operating Results
Retail Sales
4Q 2021 4Q 2020 Change Change, % FY 2021 FY 2020 Change Change, %
Total Net Retail Sales, million RUB 530,708 395,160 135,548 34.3% 1,807,752 1,510,071 297,681 19.7%
Magnit 456,792 395,160 61,632 15.6% 1,680,528 1,510,071 170,457 11.3%
Convenience Stores[2] 355,702 301,153 54,549 18.1% 1,309,682 1,161,295 148,387 12.8%
Supermarkets[3] 56,129 53,923 2,206 4.1% 208,316 203,541 4,776 2.3%
Drogerie Stores 42,317 36,997 5,320 14.4% 152,215 134,272 17,943 13.4%
Other Formats[4] 2,644 3,087 -444 -14.4% 10,314 10,963 -649 -5.9%
DIXY 73,916 n/a n/a n/a 127,224 n/a n/a n/a
Convenience Stores 70,057 n/a n/a n/a 120,552 n/a n/a n/a
Supermarkets[5] 3,858 n/a n/a n/a 6,672 n/a n/a n/a
Number of Tickets, mln 1,391 1,155 236 20.5% 5,147 4,641 506 10.9%
Magnit 1,203 1,155 48 4.2% 4,806 4,641 165 3.6%
Convenience Stores 1,010 962 48 5.0% 4,044 3,890 154 4.0%
Supermarkets 79 84 -5 -5.5% 328 338 -10 -2.9%
Drogerie Stores 107 100 7 7.0% 408 380 27 7.2%
Other Formats 6 9 -3 -28.9% 27 33 -6 -18.5%
DIXY 188 n/a n/a n/a 341 n/a n/a n/a
Convenience Stores 183 n/a n/a n/a 331 n/a n/a n/a
Supermarkets 5 n/a n/a n/a 10 n/a n/a n/a
Average Ticket[6], RUB 382 342 39 11.5% 351 325 26 7.9%
Magnit 380 342 38 11.0% 350 325 24 7.5%
Convenience Stores 352 313 39 12.4% 324 299 25 8.5%
Supermarkets 708 643 65 10.1% 636 603 33 5.4%
Drogerie Stores 396 371 26 6.9% 373 353 20 5.7%
Other Formats 399 332 67 20.1% 371 322 49 15.1%
DIXY 393 n/a n/a n/a 373 n/a n/a n/a
Convenience Stores 383 n/a n/a n/a 364 n/a n/a n/a
Supermarkets 722 n/a n/a n/a 676 n/a n/a n/a Stores and Selling Space
4Q 2021 4Q 2020 Change Change, % FY 2021 FY 2020 Change Change, %
Number of Stores (EOP) 26,077 21,564 4,513 20.9% 26,077 21,564 4,513 20.9%
Magnit 23,626 21,564 2,062 9.6% 23,626 21,564 2,062 9.6%
Convenience Stores 16,190 14,911 1,279 8.6% 16,190 14,911 1,279 8.6%
Supermarkets 470 470 0 0.0% 470 470 0 0.0%
Drogerie Stores 6,966 6,183 783 12.7% 6,966 6,183 783 12.7%
DIXY 2,451 n/a n/a n/a 2,451 n/a n/a n/a
Convenience Stores 2,412 n/a n/a n/a 2,412 n/a n/a n/a
Supermarkets 39 n/a n/a n/a 39 n/a n/a n/a
Store Openings (Net) 762 410 352 85.9% 2,036 839 1,197 142.7%
Magnit 788 410 378 92.2% 2,062 839 1,223 145.8%
Convenience Stores 533 212 321 151.4% 1,279 289 990 342.6%
Supermarkets 3 1 2 200.0% 0 -3 3 -100.0%
Drogerie Stores 252 197 55 27.9% 783 553 230 41.6%
DIXY -26 n/a n/a n/a -26 n/a n/a n/a
Convenience Stores -26 n/a n/a n/a -26 n/a n/a n/a
Supermarkets 0 n/a n/a n/a 0 n/a n/a n/a
Total Selling Space (EOP), th. sq.m 8,997 7,497 1,500 20.0% 8,997 7,497 1,500 20.0%
Magnit 8,204 7,497 708 9.4% 8,204 7,497 708 9.4%
Convenience Stores 5,635 5,090 546 10.7% 5,635 5,090 546 10.7%
Supermarkets 937 941 -4 -0.4% 937 941 -4 -0.4%
Drogerie Stores 1,604 1,428 175 12.3% 1,604 1,428 175 12.3%
Other formats 28 37 -10 -25.6% 28 37 -10 -25.6%
DIXY 793 n/a n/a n/a 793 n/a n/a n/a
Convenience Stores 718 n/a n/a n/a 718 n/a n/a n/a
Supermarkets 75 n/a n/a n/a 75 n/a n/a n/a
Selling Space Addition (Net), th. sq.m 273 126 148 n/a 701 258 443 n/a
Magnit 280 126 154 n/a 708 258 449 n/a
Convenience Stores 226 85 141 n/a 546 138 408 n/a
Supermarkets -4 1 -4 n/a -4 -7 3 n/a
Drogerie Stores 58 45 14 n/a 175 126 49 n/a
Other formats 0 -4 4 n/a -10 2 -11 n/a
DIXY -7 n/a n/a n/a -7 n/a n/a n/a
Convenience Stores -7 n/a n/a n/a -7 n/a n/a n/a
Supermarkets 0 n/a n/a n/a 0 n/a n/a n/a
4Q and 12M 2021 LFL Results[7]
4Q 2021 12M 2021
Average Ticket Traffic Sales Average Ticket Traffic Sales
Total (Magnit excl. Dixy) 10.7% -0.7% 9.9% 7.1% -0.1% 7.0%
Convenience Stores 11.9% -0.1% 11.9% 8.0% 0.2% 8.2%
Supermarkets 10.0% -6.2% 3.1% 5.2% -3.1% 1.9%
Drogerie Stores 6.3% -1.5% 4.7% 5.2% -0.8% 4.4%
4.7%
Trading Performance
LTM sales
density[8]
improvement
y-o-y Total sales in 4Q 2021 grew by 33.7% y-o-y to RUB 544.6 billion. Net retail sales grew by 34.3% y-o-y,
driven by a combination of 20.0% selling space growth and 9.9% LFL sales growth. Net retail sales
achieved by the stores under the Magnit brand accelerated to 15.6% from 13.8% in 3Q 2021 driven by LFL
sales growth in the mature outlets and higher selling space growth.
Net retail sales growth continued to outpace selling space growth on further improvement of sales
densities. Overall sales densities in 4Q 2021 (excluding stores under the Dixy brand) improved by 1.6%
q-o-q and 4.7% y-o-y while across the Company's main convenience store format these improved by 1.9%
q-o-q and 5.9% y-o-y.
Net retail sales growth of Magnit business was strong and exceeded 35% in October and November 2021. In
December 2021 it slightly decelerated to 32.5% driven by weaker performance of the last 2.5 weeks due to
the high base effect of 2020 (social payments in December 2020), slight deceleration of on-shelf
inflation versus peak levels and various COVID-related restrictions in the regions.
Selling space growth increased further from 18.4% in the previous quarter to 20.0% in the reported
quarter, driven by accelerated organic expansion and the Dixy acquisition (2,477 stores added in 3Q 2021
but consolidated from July 22nd, 2021, i.e. 4Q was the first full quarter with Dixy stores consolidated).
Selling space growth adjusted for the Dixy acquisition accelerated to 9.4% compared to the previous
quarter, reflecting a record high number of store openings per quarter (825 on gross basis) since 1Q
2019.
20%
selling space
growth y-o-y
LFL sales growth accelerated further from 8.6% in the previous quarter to 9.9% in 4Q 2021 predominantly
driven by the strong performance of mature stores. 406 stores entered LFL comparison in 4Q (including 214
convenience stores and 192 drogeries). Only 7% of Magnit's selling space is currently in the 'ramp-up'
phase with 93% already mature.
Performance of LFL stores was strong across all the regions with Caucasian and Siberian stores
demonstrating the first-rate results in the double-digit zone.
LFL sales growth in the reported quarter was driven by strong LFL average ticket growth of 10.7% due to
acceleration of inflation on top of the continued CVP improvements, store ramp-up effects, etc., while
number of SKUs in the average customer basket and average price per article were under pressure,
especially in December. LFL traffic was -0.7% driven by COVID uncertainty followed by the lockdown in
November and the introduction of QR codes in shopping malls. The latter mostly affected traffic of larger
formats located in the malls and a limited number of cosmetics stores in certain regions where they were
not deemed 'essential' stores.
Acceleration of revenue and LFL sales growth versus previous quarter did not require any intensification
of promo activity - it remained flat y-o-y with some acceleration q-o-q due to seasonal factors.
59 mln During the quarter the number of loyalty program cardholders reached 58.7 million. Company-wide, the
proportion of tickets using the loyalty card was 56% with sales penetration of 69%. During peak days of
of loyalty the quarter it reached 59% and 73% correspondingly. The loyalty program continues to deliver positive
program cross-format gains - 43% of Magnit's customer base at the end of the reporting period (compared to 40% in
cardholders the previous quarter) visit 2+ store formats. Average ticket of the active user is 1.8x higher vs
transaction without loyalty card in a convenience store and 2.0x higher in large formats.
Store Network Development and Performance by Format
The convenience segment within the Magnit brand generated 67.0% of total net retail sales in 4Q
2021. In the quarter Magnit accelerated its expansion program both q-o-q and y-o-y and opened
(gross) 565 convenience stores (336 in 3Q 2021 and 243 in 4Q 2020). The Company continued its
11.9% efficiency campaign and closed 32 convenience stores (flat y-o-y). Magnit added 533 convenience
stores (net) during the quarter. The selling space growth of convenience stores picked up to 10.7%
LFL sales growth y-o-y, driving a 18.1% acceleration in sales in the format - the strongest performance across all
in Magnit Magnit's store formats - driven by LFL sales growth of 11.9% and selling space growth of 10.7%. LFL
convenience in 4Q sales growth was driven by LFL average ticket growth of +11.9% while LFL traffic growth was -0.1%.
2021 Adjusted for the ramp-up effect following acceleration in redesign campaign, LFL traffic in
convenience stores would be positive.
Magnit supermarkets generated 10.6% of the Group's net retail sales in the reported quarter. During
4Q 2021 the Company opened four supermarkets and closed one store, focusing on refurbishment versus
adding new space. The Company's redesign program is gaining traction with 74 supermarkets
74 refurbished during 2021 including 28 in 4Q 2021. Selling space across this format remained almost
flat y-o-y. The Company was able to deliver LFL sales growth of 3.1% - in line with the previous
magnit quarter - despite the introduction of QR codes for customers of shopping malls where a third of
supermarkets Magnit's supermarkets are located. This was driven by 10.0% average ticket growth and 6.2% traffic
redesigned in 2021 decline. Traffic reduction was partly due to higher share of stores in the ramp-up phase following
acceleration in the redesign campaign (6% of large format store portfolio has been redesigned in the
reported quarter). As a result, net retail sales growth of supermarkets improved to 4.1% in the
quarter.
The sales contribution of Magnit's drogerie format represented 8.0% of total net retail sales.
During 4Q 2021 Magnit opened (net) 252 cosmetics stores - a record high since 3Q 2019. Selling space
increased by 12.3% y-o-y or by 58 thousand sq. m., the highest of all formats. Driven by this
12.3% increase in selling space and LFL sales growth of 4.7%, sales grew 14.4%. LFL traffic declined by
1.5% due to the introduction of QR codes in certain regions where drogeries were not considered
y-o-y selling stores selling essential goods. This was well compensated by 6.3% LFL average ticket growth. LFL
space increase in trends in the cosmetics format reflect lower inflation on the non-food assortment, different mix of
drogerie in 4Q products on promotion and high comparison base.
2021
During 4Q 2021 Magnit continued its renovation program and redesigned 279 convenience stores, 28
supermarkets and 8 drogeries. This resulted in the combined share of refurbished and new stores at:
78% for convenience stores, 45% for supermarkets and 62% for the drogerie format.
The share of Dixy stores in the Group's total net retail sales reached 13.9% in the fourth quarter
including 13.2% of Dixy convenience stores. In the reported period nine convenience stores were
opened, while 35 outlets have been closed, resulting in 2,451 stores and 793 thousand sq. m. of
selling space as at December 31, 2021 compared to 2,477 stores at the end of the previous quarter.
On pro-forma basis, Dixy' store estate demonstrated mid-single digit LFL sales growth, driven by
mature stores, despite high comparison base and strong sales density overall.
E-commerce
13.9%
share of the Dixy Magnit has been piloting e-commerce services since the third quarter of 2020. The Company currently
stores in the runs a number of online delivery projects, including own delivery and partnerships (express
total net retail delivery, regular delivery, e-pharma, cosmetics and partnerships).
sales in 4Q 2021
Total e-commerce GMV (incl. VAT) in the reported period was RUB 6.0 billion, contributing more than
half to the full year e-commerce GMV of RUB 11.2 billion.
During 4Q 2021, the average number of orders per day almost doubled and reached 62,274. On December
30th Magnit fulfilled over 100,000 orders.
11.2
RUB billion
The average ticket across all online services was c. RUB 1,074 including VAT. This average ticket is
GMV in 2021 approximately 2.7x higher than in the convenience stores (RUB 403 in 4Q 2021). This is mostly due to
a larger number of items per basket. The average ticket within Magnit own delivery service was RUB
1,235.
Magnit's e-commerce services today cover over 4,490 offline stores and 20 dark stores in 64 regions
and 301 cities, with 69% of the current revenue generated outside Moscow and St. Petersburg. The
largest and fastest growing segment is express delivery, where orders are expected to be fulfilled
within 60 minutes.
4Q 2021 4Q 2020 Change Change, times/% 12M 2021 12M 2020 Change Change, times/%
GMV, billion RUB 6.0 0.3 5.7 18.5x 11.2 0.4 10.9 32x
Number of orders per day (average) 62,274 3,959 58,315 15.7x 29,481 2,496 26,985 11.8x
Average ticket incl. VAT, RUB 1,074 912 162 17.8% 1,045 925 120 13.0%
Number of stores covered, EOP 4,490 1,290 3,200 3.5x 4,490 1,290 3,200 3.5x
Discounters
Magnit started piloting discounters in July 2020 as a response to the fast changing economic
environment. The concept is aimed at price-sensitive consumers who frequently make minor purchases
of traditional goods or stock up on products.
190
As at December 31, 2021 the Company had 190 operating 'My Price' discounters compared to 15 stores
My Price a year ago. During 2021 Magnit opened 175 stores including 78 in the reported quarter. Out of 190
discounters as at operating discounters 71 are new store openings and 119 have been reformatted from convenience
December 31, 2021 stores.
Average ticket at My price discounters increased by 8% y-o-y and stood at RUB 324. Outlets
reformatted from convenience stores delivered LFL sales growth of above 30%. Financial Results for 4Q and FY 2021 (IAS 17)
RUB mln 4Q 2021 4Q 2020 Change FY 2021 FY 2020 Change
Total Revenue 544,552 407,227 33.7% 1,856,079 1,553,777 19.5%
Retail 530,708 395,160 34.3% 1,807,752 1,510,071 19.7%
Wholesale 13,844 12,067 14.7% 48,327 43,707 10.6%
Gross Profit 131,255 95,027 38.1% 439,238 365,729 20.1%
Gross Margin, % 24.1% 23.3% 77 bps 23.7% 23.5% 13 bps
SG&A, % of Sales -21.2% -20.5% -72 bps -20.6% -20.5% -17 bps
EBITDA pre LTI[9] 40,452 28,803 40.4% 134,054 110,264 21.6%
EBITDA Margin pre LTI, % 7.4% 7.1% 36 bps 7.2% 7.1% 13 bps
EBITDA 40,167 28,592 40.5% 133,143 109,410 21.7%
EBITDA Margin, % 7.4% 7.0% 36 bps 7.2% 7.0% 13 bps
EBIT 23,745 16,516 43.8% 79,744 63,493 25.6%
EBIT Margin, % 4.4% 4.1% 30 bps 4.3% 4.1% 21 bps
Net Finance Costs -3,835 -2,856 34.3% -12,966 -13,497 -3.9%
FX Gain/ (Loss) -150 419 -135.7% 302 -1,310 -123.1%
Profit before Tax 19,760 14,080 40.3% 67,081 48,686 37.8%
Taxes -4,590 -2,962 55.0% -15,387 -10,905 41.1%
Net Income 15,170 11,117 36.4% 51,694 37,781 36.8%
Net Income Margin, % 2.8% 2.7% 6 bps 2.8% 2.4% 35 bps
For 4Q and FY 2021 financial results in accordance with IFRS 16 - see Appendix
24.1%
Gross margin
in 4Q 2021
Total revenue in 4Q 2021 increased by 33.7%. This growth was underpinned by net retail sales growth of
34.3% and wholesale revenue growth of 14.7%. Wholesale operations accounted for 2.5% of total sales.
Gross Profit in 4Q 2021 increased by 38.1% y-o-y to RUB 131.3 billion. Gross margin increased by 77 bps
y-o-y to 24.1% as a result of lower supply chain costs, improved commercial terms, smarter promotions and
a favorable format mix. Promotional intensity was flat y-o-y with some acceleration q-o-q due to seasonal
factors. On a q-o-q basis gross margin improved by 52 bps from 23.6% in 3Q 2021.
Despite further increases to on-shelf availability, supply chain costs decreased by 12 bps y-o-y. This
was due to higher DC productivity and utilization, which offset the negative impact of the increased
container shipping tariffs.
Shrinkage as a proportion of sales increased by 5 bps y-o-y driven by consolidation of the Dixy business.
Shrinkage as a percentage of sales at Magnit's standalone business remained flat y-o-y despite the
growing share of fresh products and overall improvement of on-shelf availability.
SG&A costs increased by 72 bps y-o-y to 21.2% as a percent of sales due to the different calendarisation
of personnel costs versus the previous year as well as the accelerated expansion and redesign with higher
a share of stores in the ramp-up phase.
Personnel costs as a percentage of sales increased by 62 bps which was predominantly driven by the
different calendarisation of the annual bonus accrual (44 bps) versus previous year. Total amount of
expenses related to STIP[10] remained flat y-o-y. Other influencing factors include higher share of
outsource staff and much bigger number of new stores in the ramp-up phase. This was partially offset by
continued productivity improvements and ongoing automation of business processes.
Advertising expenses decreased by 21 bps y-o-y on more efficient marketing activities and calendarisation
of loyalty campaigns.
Rental costs as a percentage of sales increased by 12 bps y-o-y driven by consolidation of Dixy stores
predominantly located in the Moscow and Saint-Petersburg regions with higher rent rates, acceleration in
store openings and, subsequently, larger number of stores in the ramp-up period as well as higher share
of leased selling space. The share of leased selling space increased to 80.2% in 4Q 2021 vs 78.0% a year
ago. Despite the above-mentioned factors, rent expense of Magnit's standalone business decreased as a
percentage of sales thanks to higher sales density, improved lease terms with landlords and the closure
of inefficient stores.
Utilities costs as a percentage of sales increased by 8 bps y-o-y on accelerated store openings and their
ramp-up period as well as y-o-y increase in cleaning expenses due to higher frequency of cleaning and
sanitary treatment.
Depreciation, repair and maintenance, packaging and raw materials, bank, tax and other expenses as a
percentage of sales remained broadly flat y-o-y.
As a result, EBITDA was RUB 40.2 billion with a 7.4% margin - an improvement of 36 bps y-o-y and 21 bps
q-o-q. This was driven by strong gross margin dynamics but partially offset by higher SG&A costs as well
as the consolidation of Dixy business with lower profitability. EBITDA margin for the FY 2021 was 7.2%
with a y-o-y improvement of 13 bps.
7.4% Net finance costs in 4Q 2021 increased by 34.3% y-o-y to RUB 3.8 billion (but were flat in absolute terms
q-o-q) due to the higher total amount of borrowings. The Company increased its total debt by RUB 104.3
ebitda margin billion during the last twelve months, by obtaining long-term bank loans and bond issuance. These
in 4Q 2021 supported the Company's accelerated expansion and the acquisition of Dixy.
As a result, average cost of debt increased y-o-y to 6.4% (33 bps y-o-y) but remained flat q-o-q. 99.8%
of the Company's debt profile is represented by long-term borrowings and bonds with an average maturity
of 18 months.
In 4Q 2021 the Company reported FX loss of RUB 0.2 billion related to direct import operations.
Income tax in 4Q 2021 was RUB 4.6 billion. The effective tax rate stood at 23.2%.
As a result, net income in 4Q 2021 increased by 36.4% y-o-y and stood at RUB 15.2 billion. Net income
margin increased by 6 bps y-o-y to 2.8%. Net income for FY 2021 grew by 36.8% with a margin improvement
of 35 bps to 2.8%.
2.8%
Net income
margin
in 4Q 2021 Financial Position Highlights (IFRS 16)
RUB mln 31.12.2021 31.12.2020
Inventories 224,873 205,949
Trade and other receivables 11,902 8,564
Cash and cash equivalents 73,399 44,700
Long-term borrowings and loans 205,287 147,695
Trade and other payables 239,737 184,325
Short-term loans and borrowings 65,139 18,392
Inventories increased by RUB 18.9 billion (9.2%) compared with December 31, 2020 and stood at RUB 225
billion on the back of total sales growth of 33.7%. Adjusted for the Dixy acquisition, inventories of the
Magnit's standalone business reduced substantially. This was driven by a number of ongoing projects,
including the reduction of slow-moving items, assortment harmonization and IT solutions that are aimed at
better on-shelf availability and promotion forecasting.
negative
working
capital with
Trade and other payables grew by RUB 55.4 billion compared with December 31, 2020 and stood at RUB 239.7
18.5 billion, driven by higher sales and increased payment days. Accounts receivables increased by RUB 3.3
billion vs December 31, 2020 and stood at RUB 11.9 billion due to higher sales and improved commercial
billion terms with suppliers.
cash release
As a result, working capital as of December 31, 2021 turned negative with the cash release of RUB 18.5
billion. Negative working capital was achieved for both the standalone Magnit and Dixy businesses.
Debt Composition and Leverage
December 31, 2021 June 30, 2021 December 31, 2020
IAS 17
Total Debt, RUB billion 270.4 265.5 166.1
Long-Term Debt 205.3 222.9 147.7
Short-Term Debt 65.1 42.6 18.4
Net Debt, RUB billion 197.0 136.1 121.4
Net Debt/EBITDA 1.5x 1.2x 1.1?
IFRS 16
Net Debt, RUB billion 653.3 498.9 479.0
Net Debt/EBITDA 3.0x 2.7x 2.7x
As at December 31, 2021 Gross Debt increased by RUB 104.3 billion or 62.8% compared to December 31, 2020
and stood at RUB 270.4 billion. Total debt remained flat versus end of the previous quarter. The
Company's cash position increased to RUB 73.4 billion as at December 31, 2021 from RUB 44.7 billion as at
December 31, 2020. As a result, Net Debt increased by 62.3% y-o-y to RUB 197.0 billion as at December 31,
2021.
1.5x
net debt/
ebitda The Company's debt is fully RUB denominated, matching its revenue structure. The Net Debt to EBITDA ratio
as of was 1.5x as at December 31, 2021 vs 1.1x as at December 31, 2020. During the reported quarter leverage
december 31, reduced significantly from 1.9x as at September 30, 2021.
2021
(IAS17)
Capex in 4Q 2021 increased by 89.3% and stood at RUB 23.9 billion. This was driven by an almost twofold
acceleration of the Group's expansion and a more than quadrupling of the store redesign program (834
store openings on gross basis and 315 redesigns in 4Q 2021 vs 445 and 72 respectively in 4Q 2020). Total
capital expenditure for the full year almost doubled and stood at RUB 65.9 billion (matching guidance),
compared with RUB 32.0 billion in FY 2020. FY 2022 Guidance
Number of store openings (all formats, gross) >2,000
Number of redesigns (all formats) 900
GMV on-line growth, RUB billion >2.0x
CAPEX, RUB billion 80-85
In 2022 Magnit plans to open more than 2,000 stores of different format on a gross basis as part
of its organic expansion which is broadly in line with the previous year, adjusted for small
organic-type acquisitions. The store opening program for the current year reflects a strict return
requirement and continued focus on operating efficiency. The Company also plans to refurbish
>2,000 around 900 stores, more than in the previous year.
stores on gross In 2022, the Company will continue developing its e-commerce services including Magnit's own
basis to be opened delivery and partnerships and plans to at least double its e-commerce GMV.
by magnit
organically in 2022 In 2022 Capital expenditure is expected to be approximately RUB 80-85 billion, excluding M&A
activity. An increase in the planned absolute investment compared to 2021 reflects the greater
number of store redesigns, Dixy store network refurbishment and maintenance, launch of new own
production facilities and higher spending on efficiency projects focused on both sales growth and
productivity improvement, including supply-chain optimization and IT infrastructure. The Company
expects that in 2022 capex of total sales will remain at similar levels to 2021.
Note: 1. This announcement contains inside information disclosed in accordance with the Market Abuse Regulationeffective from July 3, 2016. 2. Please note that there may be small variations in calculation of totals, subtotals, and/or percentagechange 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
"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, 2021, Magnit operated 45 distribution centers and
26,077 stores in 3,898 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the unaudited IFRS 16 management accounts results for FY 2021, Magnit had revenues of
RUB 1,856 billion and an EBITDA of RUB 214 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
4Q 2021 Monthly Sales
October Change November Change December Change
Total net retail sales, RUB million 168,086 35.6% 162,423 35.2% 200,199 32.5%
Magnit 144,308 16.5% 139,281 15.9% 173,203 14.6%
Convenience Stores 113,449 18.7% 110,603 18.9% 131,650 17.0%
Supermarkets 16,950 8.5% 15,815 1.8% 23,365 2.7%
Drogerie Stores 12,985 12.3% 12,050 14.5% 17,282 15.9%
Other formats 925 -17.3% 813 -22.6% 906 -1.3%
DIXY 23,778 n/a 23,141 n/a 26,996 n/a
Convenience Stores 22,523 n/a 22,051 n/a 25,483 n/a
Supermarkets 1,255 n/a 1,091 n/a 1,513 n/a 4Q and FY 2021 Store Openings
4Q 2021 4Q 2020 Change Change, % FY 2021 FY 2020 Change Change, %
Store Openings (Gross) 834 445 389 87.4% 2,295 1,292 1,003 77.6%
Magnit 825 445 380 85.4% 2,281 1,292 989 76.5%
Convenience Stores 565 243 322 132.5% 1,450 669 781 116.7%
Supermarkets 4 2 2 100.0% 6 4 2 50.0%
Drogerie Stores 256 200 56 28.0% 825 619 206 33.3%
DIXY 9 n/a n/a n/a 14 n/a n/a n/a
Convenience Stores 9 n/a n/a n/a 14 n/a n/a n/a
Supermarkets 0 n/a n/a n/a 0 n/a n/a n/a
Store Closures 72 35 37 105.7% 259 453 -194 -42.8%
Magnit 37 35 2 5.7% 219 453 -234 -51.7%
Convenience Stores 32 31 1 3.2% 171 380 -209 -55.0%
Supermarkets 1 1 0 0.0% 6 7 -1 -14.3%
Drogerie Stores 4 3 1 33.3% 42 66 -24 -36.4%
DIXY 35 n/a n/a n/a 40 n/a n/a n/a
Convenience Stores 35 n/a n/a n/a 40 n/a n/a n/a
Supermarkets 0 n/a n/a n/a 0 n/a n/a n/a
Store Openings (Net) 762 410 352 85.9% 2,036 839 1,197 142.7%
Magnit 788 410 378 92.2% 2,062 839 1,223 145.8%
Convenience Stores 533 212 321 151.4% 1,279 289 990 342.6%
Supermarkets 3 1 2 200.0% 0 -3 3 -100.0%
Drogerie Stores 252 197 55 27.9% 783 553 230 41.6%
DIXY -26 n/a n/a n/a -26 n/a n/a n/a
Convenience Stores -26 n/a n/a n/a -26 n/a n/a n/a
Supermarkets 0 n/a n/a n/a 0 n/a n/a n/a Financial Results for 4Q and FY 2021 (IFRS 16)
RUB mln 4Q 2021 4Q 2020 Change FY 2021 FY 2020 Change
Total Revenue 544,552 407,227 33.7% 1,856,079 1,553,777 19.5%
Retail 530,708 395,160 34.3% 1,807,752 1,510,071 19.7%
Wholesale 13,844 12,067 14.7% 48,327 43,707 10.6%
Gross Profit 131,234 95,054 38.1% 439,264 365,756 20.1%
Gross Margin, % 24.1% 23.3% 76 bps 23.7% 23.5% 13 bps
SG&A, % of Sales -19.9% -19.2% -71 bps -19.2% -19.1% -15 bps
EBITDA pre LTI[11] 63,138 46,168 36.8% 215,132 179,043 20.2%
EBITDA Margin pre LTI, % 11.6% 11.3% 26 bps 11.6% 11.5% 7 bps
EBITDA 62,853 45,957 36.8% 214,220 178,189 20.2%
EBITDA Margin, % 11.5% 11.3% 26 bps 11.5% 11.5% 7 bps
EBIT 31,016 22,572 37.4% 108,897 88,424 23.2%
EBIT Margin, % 5.7% 5.5% 15 bps 5.9% 5.7% 18 bps
Net Finance Costs -13,398 -10,509 27.5% -46,578 -44,268 5.2%
FX Gain/ (Loss) -183 485 -137.7% 281 -1,453 -119.3%
Profit before Tax 17,435 12,547 39.0% 62,600 42,703 46.6%
Taxes -4,136 -2,657 55.7% -14,494 -9,709 49.3%
Net Income 13,299 9,890 34.5% 48,106 32,993 45.8%
Net Income Margin, % 2.4% 2.4% 1 bps 2.6% 2.1% 47 bps
-----------------------------------------------------------------------------------------------------------------------
[1] LFL calculation base includes Magnit 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. Dixy stores will be added to the LFL panel after full 12 months of operations since consolidation
[2] Convenience Stores include convenience stores and small pilots such as Magnit City and My Price discounters
[3] Supermarkets include Magnit Family supermarkets and Magnit Extra superstores
[4] Other Formats include pharmacies and stores located at Russian Post offices
[5] Supermarkets include Megamart and Minimart stores
[6] Excluding VAT
[7] Excluding Dixy stores. Dixy stores will be added to the LFL panel after full 12 months of operations after consolidation
[8] Net retail sales of the last four quarters divided by the average selling space at the end of the last five quarters (excluding Dixy)
[9] LTI - Long-Term Incentive Program
[10] Short-Term Incentive Program
[11] LTI - Long-Term Incentive Program
-----------------------------------------------------------------------------------------------------------------------
ISIN: US55953Q2021 Category Code: MSCU TIDM: MGNT LEI Code: 2534009KKPTVL99W2Y12 OAM Categories: 2.2. Inside information Sequence No.: 140857 EQS News ID: 1276600 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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(END) Dow Jones Newswires
February 04, 2022 01:00 ET (06:00 GMT)
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