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OJSC 'MAGNIT' (FRA:5M71) PJSC 'Magnit' Announces Positive Like-For-Like Sales and Almost 10% Sales Growth in 4Q 2018

Directive transparence : information réglementée

07/02/2019 08:00

MAGNIT PJSC (MGNT)
PJSC 'Magnit' Announces Positive Like-For-Like Sales and Almost 10% Sales Growth in 4Q 2018

07-Feb-2019 / 10:00 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.


 

 

Press Release | Krasnodar | February 07, 2019

 

 

PJSC "Magnit" Announces Positive Like-For-Like Sales and Almost 10% Sales Growth in 4Q 2018

 

Krasnodar, Russia (7 February, 2019): Magnit PJSC (MOEX and LSE: MGNT), one of Russia's leading retailers announces its unaudited 4Q and FY 2018 results prepared in accordance with IFRS1.

 

 

 

Revenue increased by 9.7% from 302 billion RUR in 4Q 2017 to 332 billion RUR in 4Q 2018 on the back of significant LFL sales improvement to 0.6% compared to -2.0% in the previous quarter. This was the first quarter in 2 years with positive LFL sales as a result of improved CVP, changes in category management and increased availability on the shelf. LFL sales growth in the key format turned positive to 0.3% as average ticket growth outweighed still negative traffic. This was mainly driven by sound positive assortment mix and inflation. The best performance was demonstrated by "Magnit Cosmetic" stores - LFL sales growth reached 6.5% in 4Q 2018 on the back of 4.9% LFL average ticket growth and 1.5% traffic growth. Magnit supermarkets' LFL sales growth remained negative although improved from -1.6% in 3Q 2018 to -0.7% in 4Q.

During 2018 Magnit added (net) 2,049 stores (1,302 convenience stores, 731 drogerie stores and 16 supermarkets). The total store base as of December 31, 2018 reached 18,399 stores. Addition of selling space in 2018 was 669 thousand sq. m. compared to 687 thousand sq. m. in 2017. The new CVP for the convenience format has been finalized and new stores will be opened under this new CVP with improved layout. The quality of new store openings has improved which supported sales density growth. We have redesigned 462 stores in 4Q 2018. As a result, we fulfilled the guidance for the year 2018.

EBITDA in 4Q 2018 increased by 4.3% y-o-y on the back of EBITDA margin of 7.0%. EBITDA result was driven by the gross profit dynamics, increase of the lease expense due to the higher share of leased stores. Negative impact was partially offset by the improvement of payroll expenses through productivity increase in stores and energy consumption measures resulting in utilities costs reduction.


Net Income in 4Q 2018 increased by 7.1% from 7.9 billion RUB in 4Q 2017 to 8.4 billion RUB in 4Q 2018. EBITDA margin contraction was almost neutralized due to improvement of interest expenses as a result of improvements of terms in the debt portfolio. Net Income Margin in 4Q 2018 was 2.5%.

 

 

 

 

Olga Naumova, Magnit's Chief Executive Officer, commented:

 

"We are proud to report positive like-for-like sales growth in the 4th quarter for the first time in 2 years. We are delighted that customers have reacted fast to the transformation we started six months ago, helping to grow sales almost 10% in the 4th quarter.

 

With these positive trends and our completed management team we feel very confident about 2019".

 

 

 

 

 

 

4Q 2018 Monthly Operating Metrics:

 

 

October

Y-o-Y, %

November

Y-o-Y, %

December

Y-o-Y, %

New Store Openings (NET)

243

n/a

335

n/a

379

n/a

Convenience stores

133

n/a

219

n/a

262

n/a

Supermarkets2

2

n/a

0

n/a

8

n/a

Drogerie Stores

108

n/a

116

n/a

109

n/a

 

 

 

 

 

 

 

Number of Stores (EOP)

17,685

n/a

18,020

n/a

18 399

n/a

Convenience stores

12,946

n/a

13,165

n/a

13 427

n/a

Supermarkets

459

n/a

459

n/a

467

n/a

Drogerie Stores

4,280

n/a

4,396

n/a

4,505

n/a

 

 

 

 

 

 

 

New Selling Space, th. sq. m.

79

n/a

114

n/a

139

n/a

Convenience stores

51

n/a

85

n/a

104

n/a

Supermarkets

2

n/a

0

n/a

9

n/a

Drogerie Stores

26

n/a

29

n/a

26

n/a

 

 

 

 

 

 

 

Total Selling Space (EOP), th. sq. m.

6,171

9.4%

6,285

10.5%

6,424

11.6%

Convenience stores

4,255

9.2%

4,340

10.7%

4,444

12.3%

Supermarkets

933

2.5%

933

2.1%

942

1.2%

Drogerie Stores

982

17.4%

1,011

18.6%

1,038

19.8%

 

 

 

 

 

 

 

Number of Customers, million

369

8.8%

355

5.1%

389

3.6%

Convenience stores

312

8.6%

301

4.8%

323

3.5%

Supermarkets

33

4.6%

32

3.9%

36

(2.1)%

Drogerie Stores

24

16.9%

23

11.5%

29

13.9%

 

 

 

 

 

 

 

Retail Sales3, million RUR

99,823

9.4%

100,828

9.8%

126,206

8.7%

Convenience stores

75,498

9.9%

76,678

10.1%

92,347

10.0%

Supermarkets

16,580

2.7%

16,759

6.0%

22,887

(0.9)%

Drogerie Stores

7,745

20.4%

7,391

16.0%

10,972

21.6%

 

 

4Q and 12M 2018 Key Operating Metrics:

 

 

 

 

 

 

 

4Q 2018

4Q 2017

Y-o-Y, %

12M 2018

12M 2017

Y-o-Y, %

New Store Openings (NET)

957

653

n/a

2,049

2,291

n/a

Convenience stores

614

382

n/a

1,302

1,604

n/a

Supermarkets

10

19

n/a

16

20

n/a

Drogerie Stores

333

252

n/a

731

667

n/a

 

 

 

 

 

 

 

Number of Stores (EOP)

18,399

16,350

n/a

18,399

16,350

n/a

Convenience stores

13,427

12,125

n/a

13,427

12,125

n/a

Supermarkets

467

451

n/a

467

451

n/a

Drogerie Stores

4,505

3,774

n/a

4,505

3,774

n/a

 

 

 

 

 

 

 

New Selling Space, th. sq. m.

332

192

n/a

669

687

n/a

Convenience stores

239

117

n/a

486

506

n/a

Supermarkets

11

28

n/a

11

34

n/a

Drogerie Stores

81

47

n/a

171

147

n/a

 

 

 

 

 

 

 

Total Selling Space (EOP), th. sq. m.

6,424

5,755

11.6%

6,424

5,755

11.6%

Convenience stores

4,444

3,958

12.3%

4,444

3,958

12.3%

Supermarkets

942

931

1.2%

942

931

1.2%

Drogerie Stores

1,038

866

19.8%

1,038

866

19.8%

 

 

 

 

 

 

 

Number of Customers, million

1,113

1,052

5.8%

4,370

4,040

8.2%

Convenience stores

935

886

5.6%

3,690

3,404

8.4%

Supermarkets

101

99

1.9%

395

383

3.1%

Drogerie Stores

77

67

14.1%

285

254

12.2%

 

 

 

LFL Results:

 

 

4Q 2018 - 4Q 20174

 

 

Formats

 

Average Ticket

Traffic

Sales

Convenience stores

 

3.9%

(3.5%)

0.3%

Supermarkets

 

1.1%

(1.8%)

(0.7%)

Drogerie Stores

 

4.9%

1.5%

6.5%

Total

 

3.7%

(3.0%)

0.6%

 

12М 2018 - 12М 20174

 

Formats

 

Average Ticket

Traffic

Sales

Convenience stores

 

0.0%

(2.8%)

(2.8%)

Supermarkets

 

(2.0%)

(1.3%)

(3.3%)

Drogerie Stores

 

4.1%

(1.1%)

    3.0%

Total

 

0.1%

(2.6%)

(2.5%)

 

 

 

 

 

4Q and 12M 2018 Key Financial Results, million RUR

 

 

 

4Q 2018

4Q 2017

Growth Rate

12M 2018

12M 2017

Growth Rate

Net sales

331,641

302,329

9.7%

1,237,015

1,143,314

8.2%

Convenience stores

244,523

222,320

10.0%

917,853

846,113

8.5%

Supermarkets

56,226

55,044

2.1%

207,434

206,214

0.6%

Drogerie Stores

26,108

21,830

19.6%

91,563

78,786

16.2%

Wholesale

4,784

3,135

52.6%

20,164

12,201

65.3%

Gross Profit5

78,654

72,853

8.0%

296,457

289,498

2.4%

Gross Margin, %

23.7%

24.1%

n/a

24.0%

25.3%

n/a

EBITDAR

36,141

33,923

6.5%

141,036

136,967

3.0%

EBITDAR Margin, %

10.9%

11.2%

n/a

11.4%

12.0%

n/a

EBITDA6

23,219

22,253

4.3%

89,827

91,644

(2.0%)

Adjusted EBITDA

23,219

22,253

4.3%

91,326

91,644

(0.3%)

EBITDA Margin, %

7.0%

7.4%

n/a

7.3%

8.0%

n/a

Adjusted EBITDA Margin, %

7.0%

7.4%

n/a

7.4%

8.0%

n/a

EBIT

13,810

13,433

2.8%

53,366

57,928

(7.9%)

EBIT Margin, %

4.2%

4.4%

n/a

4.3%

5.1%

n/a

Profit before tax

10,873

10,300

5.6%

43,025

45,424

(5.3%)

Taxes

(2,444)

(2,432)

0.5%

(9,213)

(9,885)

(6.8%)

Net Income

8,429

7,867

7.1%

33,812

35,539

(4.9%)

Net Income Margin, %

2.5%

2.6%

n/a

2.7%

3.1%

n/a

 

 

 

 

 

 

 

 

 

 

Key Financial Position Statements as of 31.12.2018, million RUR

 

 

12M 2018

12M 2017

Non-current assets

383,301

336,786

Inventories

187,828

162,205

Cash and cash equivalents

26,748

18,337

Other current assets

13,470

                      8,997

Assets

611,347

526,325

 

 

 

Equity

253,652

259,307

Long-term borrowings

93,764

86,338

Other long-term liabilities

28,923

22,622

Trade and other payables

130,624

99,142

Short-term borrowings and short-term portion of long-term borrowings

70,827

40,122

Other short-term liabilities

33,556

18,793

Equity and liabilities

611,347

526,325

 

 

 

Net debt / Adjusted EBITDA

1.5

1.2

       

 

 

Notes:

1.    This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 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:

 

 

 

Dmitry Kovalenko

Director for Investor Relations

Email: kovalenko_dv3@magnit.ru

Office: +7-861-277-45-54, 210-9810 x 46082

 


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 December 31, 2018, Magnit operated 37 distribution centers and 18,399 stores (13,427 convenience, 467 supermarkets and 4,505 drogerie stores) in 2,976 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the unaudited IFRS management accounts for 2018, Magnit had revenues of RUB 1,237 billion and an EBITDA of RUB 90 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.

 



ISIN: US55953Q2021
Category Code: MSCU
TIDM: MGNT
LEI Code: 2534009KKPTVL99W2Y12
OAM Categories: 2.2. Inside information
Sequence No.: 7401
EQS News ID: 773487

 
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