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MAGNIT REPORTS 4.1% LFL SALES GROWTH AND 7.0% EBITDA MARGIN IN 1Q 2021

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MAGNIT PJSC (MGNT)
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.

 

 

 

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.

 

 

 

 

 

6.3%

net retail sales growth

1Q 2021 Key Operating and Financial Highlights

 

4.1%

lfl sales growth

 

 

7.0%

EBITDA margin

 

 

 

 

«

 

 

 

 

 

 

Jan Dunning

Magnit's President

and CEO

 

 

 

 

 

 

 

 

»

"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 improvement in profitability, delivering sustainable 7.0% EBITDA margin in 1Q 2021.

 

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

total amount of dividends recommended by the board to be paid

for 2020

 

 

 

 

 

 

33

hard disounters in operation

 

 

 

 

Key Events in 1Q 2021 and after the Reported Period

 

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

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%

 

 

 

 

5.3%

LTM sales density[6] improvement y-o-y

 

 

 

Trading Performance

 

Total sales in 1Q 2021 grew by 5.8% y-o-y to RUB 397.9 billion.

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 by a combination of 4.5% selling space growth and 4.1% LFL sales growth.

 

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.

 

 

 

 

 

 

 

94%

of selling space is already matured

 

 

 

 

 

14.9%

lfl average ticket growth in 1Q 2021

 

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 space is currently in the ramp-up phase with 94.1% already matured.

 

As in the previous quarters, average ticket was the main driver of LFL sales growth. This reflects 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.

 

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 positive response of customers to operational improvements and initiatives and then accelerated further driven by increased frequency of visits during stockpiling in March.

 

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

of loyalty program active users

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 the loyalty card was 54% with penetration in sales of 68%. The loyalty program continues to deliver positive cross-format gains with sustainable growth of customers visiting 2+ store formats (42% of Magnit customer base at the end of the reporting period).

 

 

 

77.3%

of total net retail sales generated by convenience segment

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 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 the total number of convenience stores to 15,098. The selling space growth of convenience stores was 4.4% y-o-y resulting in the total selling space of this format of 5,169 thousand sq. m. as of March 31, 2021. Sales in the convenience format grew by 7.2% driven by LFL sales growth of 4.9%. LFL traffic growth decelerated to -9.5% on high base effect. LFL average ticket growth remained strong and stood at 15.9% overcompensating negative LFL traffic growth.

 

 

12.9%

of total net retail sales generated by supermarkets

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 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 performance as supermarkets had the highest base effect due to stockpiling last year which, to a great extent, happened in the large formats. LFL traffic was flat q-o-q and stood at -11.4% while LFL average ticket growth decelerated to 12.1% which was not enough to compensate negative LFL traffic. As a result, LFL sales growth in supermarkets stood at -0.7%.

 

9.0%

of total net retail sales generated by drogerie

 

 

 

 

 

 

 

 

 

 

 

 

4.1

RUB billion

annual GMV runrate

 

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 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 growth was negative of -6.9% well compensated by strong 12.0% LFL average ticket growth.

 

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.

 

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 per basket.

 

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%

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

 

 

 

10.7%

sales growth in january 2021

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%).

 

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 in February would be 11.3%. January and February 2021 came on a much stronger base with mid-single digit LFL sales growth in the same months last year.

 

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

 

 

 

 

 

 

 

61 bps

y-o-y reduction of shrinkage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7.0%

ebitda margin in 1Q 2021

 

 

 

 

 

 

 

 

 

 

2.7%

Net income 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.

 

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 23.4% as a result of improved commercial terms, lower shrinkage and favorable format mix. This was 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.

 

In 1Q 2021 the Company reported FX loss in the amount of RUB 0.2 billion related to direct import 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%.

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

 

 

7.6

DAYS

y-o-y optimisation of inventories[10]

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 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.

 

Trade and other payables reduced by RUB 5.1 billion vs March 31, 2020 and stood at RUB 138.3 billion due to inventory reduction vs previous year, while payment days increased. This was partially offset by 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

1.4х

1.1х

2.2х

IFRS 16

 

 

 

Net Debt, RUB billion

522.8

479.0

549.8

Net Debt/EBITDA

2.8x

2.7x

3.6x

 

 

1.4x

net debt/ebitda
as of March 31, 2021 (IAS 17)

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.

 

The Company's debt is fully RUB denominated matching revenue structure. 98% of debt portfolio was long-term with 21 months maturity. The Net Debt to EBITDA ratio was 1.4x as at March 31, 2021 vs 1.1x as at December 31, 2020.

 

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:

 

 

 

 

 

 

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

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