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Magnit Announces First Results of Its E-Commerce Pilots

·5-min read

MAGNIT PJSC (MGNT)
18-Dec-2020 / 09:59 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

Press-release | Krasnodar | December 18, 2020.

 

Magnit Announces First Results of Its E-Commerce Pilots

 

Krasnodar, Russia (December 18, 2020): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers, began testing e-commerce services in the second half of 2020, with the most recent pilots launched in early December. During the first three months, the pilots' growth dynamics exceeded original expectations and showcased the high potential of this market. Despite being a new entrant in the segment, Magnit already fulfills around 7,000 orders a day, with that number growing steadily by 25% on average every week[1]. According to the Company's analysis, most of the orders are placed by customers who didn't shop at its brick-and-mortar stores before.

The run rate for Magnit's online segment currently stands at 2.2 billion rubles based on sales turnover for the last week (December 7-13).

In total, Magnit currently runs six online delivery projects, both independently and in cooperation with partners. The Company started developing its food-tech business together with industry specialists, joining forces with Delivery Club in late August 2020, and with Yandex.Eda in late September. Both services provide express delivery within 1 hour. In September, the Company introduced online ordering for its Magnit Pharmacy format; in early November, it launched its own Magnit Delivery app for express deliveries within Moscow; and at the end of the same month, it started a regular delivery service from Magnit Family stores in Krasnodar. In the beginning of December, Magnit and Delivery Club launched deliveries from Magnit Cosmetic stores in Ekaterinburg and Krasnodar. All of Magnit's e-commerce projects are currently in the pilot stage.

Among all these segments, convenience store-based express delivery has the highest sales and shows the best growth dynamics.

As of today, the average ticket for Magnit's own delivery service is 1,500 rubles, which is approx. 5 times higher than in the convenience stores (283 rubles in Q3 2020). This is mostly due to a larger number of items per basket; in addition to that, the delivery fee also depends on the ticket amount.

The Company expects the average ticket in e-commerce to continue growing, bolstered by the roll-out of the Magnit Delivery service, as the latter focuses more on customers looking to stock up on products from Magnit's large formats. At the moment, the service is available only in Krasnodar.

Magnit's e-commerce services today encompass over 900 stores in 44 regions and 69 cities, with around 50% of the current revenue from these online projects generated outside Moscow and Saint Petersburg. During 2021, the Company plans to expand online delivery adding not less than 1,500 convenience, drogerie and large-format stores in more than 50 regions across Russia.

"We managed to enter the online segment very quickly. We deliberately made our initial bid on partnership projects to minimize the investment, ensure fast roll-out, and get the necessary experience. The Company will continue developing the partnership model but will also pay a lot of attention to establishment of our own delivery service across various shopping missions," commented Jan Dunning, President and CEO of Magnit Retail Chain. "Despite all our projects currently running in pilot mode, they are already demonstrating good results. We've set very ambitious growth targets for this business: we want to provide our customers with a high-quality offering and different services, both in offline and online segments."

 

 

For further information, please contact:

 

 

Dmitry Kovalenko

Director for Investor Relations

Email: dmitry_kovalenko@magnit.ru

Office: +7 (861) 210-48-80

 

Dina Chistyak

Director for Investor Relations

Email: dina_chistyak@magnit.ru

Office: +7 (861) 210-9810 x 15101

 

Media Inquiries

Media Relations Department

Email: press@magnit.ru

 

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 September 30, 2020, Magnit operated 38 distribution centres and 21,154 stores (14,699 convenience, 469 supermarkets and 5,986 drogerie stores) in 3,819 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the unaudited IFRS 16 management accounts results for 1H 2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 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 forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and 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] Compared to the previous week


ISIN:

US55953Q2021

Category Code:

MSCU

TIDM:

MGNT

LEI Code:

2534009KKPTVL99W2Y12

OAM Categories:

3.1. Additional regulated information required to be disclosed under the laws of a Member State

Sequence No.:

89912

EQS News ID:

1156210


 

End of Announcement

EQS News Service

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