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DGAP-UK-Regulatory News vom 20.08.2018

PJSC 'Magnit' Announces Reviewed 1H 2018 Financial Results

MAGNIT PJSC (MGNT)

20-Aug-2018 / 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 | August 20, 2018

 

 

PJSC "Magnit" Announces Reviewed 1H 2018 Results

 

Krasnodar, Russia (20 August, 2018): Magnit PJSC (MOEX and LSE: MGNT), one of Russia's leading retailers announces its reviewed 1H 2018 results prepared in accordance with IFRS.

 

 

 

During 2Q 2018 Magnit added (net) 335 stores. The total store base as of June 30, 2018 reached 16,960 stores (12,503 convenience stores, 244 hypermarkets, 213 "Magnit Family" stores and 4,000 drogerie stores). Addition of selling space in 1H 2018 was 190 thousand sq. m. compared to 252 thousand sq. m.in 1H 2017.

Revenue increased by 7.2% from 555 billion RUR in 1H 2017 to 595 billion RUR in 1H 2018 on the back of 11.7% selling space growth and negative LFL sales dynamics (-4.5% in 1H 2018).

LFL performance in 1H 2018 was influenced by low food inflation and unfavourable timing of Easter holidays (coming before standard salary payment), lower number of stores opened after redesign (414 vs. 830 respectively), as well as intensifying competition and cannibalisation.

Gross Profit decreased y-o-y and stood at 147 billion RUR in 1H 2018. Gross Margin in 1H 2018 was 24.7%. The decrease was due to (1) price investments; (2) extensive promo held in May and June and (3) shrinkage growth caused by incorrect promo volume projections. As part of the Company's strategic plan, management is taking steps to address the promo issue.

EBITDA in 1H 2018 was 44 billion RUR. EBITDA margin in 1H 2018 was 7.4%. EBITDA result was driven by the gross profit dynamics, increase of the lease expense due to the higher share of leased stores as well as one-off inventory write-offs of inventory and accrued provisions in the amount of 1.5 billion RUR. Negative impact was partially offset by the improvement in payroll and other operating expenses. EBITDA adjusted for one-off effects would be 7.7% in 1H 2018 and 8.2% in 2Q 2018.


Net Income in 1H 2018 was 18 billion RUR down from 21 billion RUR in 1H 2017 on the back of lower EBITDA partially offset by the improvement of interest and tax expense. Net Income Margin in 1H 2018 was 3.0%.

 

According to the reviewed results for the 1H 2018 some figures in this press release are immaterially different from those announced by the Company in its management accounts on July 26, 2018.

 

 

 

 

2Q 2018 Monthly Operating Metrics:

 

 

April

Y-o-Y, %

May

Y-o-Y, %

June

Y-o-Y, %

New Store Openings (NET)

107

n/a

75

n/a

153

n/a

Convenience stores

65

n/a

55

n/a

100

n/a

Hypermarkets

1

n/a

0

n/a

1

n/a

Supermarkets

1

n/a

1

n/a

1

n/a

Drogerie Stores

40

n/a

19

n/a

51

n/a

 

 

 

 

 

 

 

Number of Stores (EOP)

16,732

n/a

16,807

n/a

16,960

n/a

Convenience stores

12,348

n/a

12,403

n/a

12,503

n/a

Hypermarkets

243

n/a

243

n/a

244

n/a

Supermarkets

211

n/a

212

n/a

213

n/a

Drogerie Stores

3,930

n/a

3,949

n/a

4,000

n/a

 

 

 

 

 

 

 

New Selling Space, th. sq. m.

35

n/a

28

n/a

52

n/a

Convenience stores

23

n/a

21

n/a

37

n/a

Hypermarkets

2

n/a

0

n/a

2

n/a

Supermarkets

1

n/a

3

n/a

1

n/a

Drogerie Stores

9

n/a

4

n/a

12

n/a

 

 

 

 

 

 

 

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

5,865

13.0%

5,893

12.4%

5,945

11.7%

Convenience stores

4,034

13.6%

4,056

12.9%

4,092

12.1%

Hypermarkets

696

1.6%

696

1.1%

698

1.0%

Supermarkets

232

10.5%

234

10.9%

235

12.6%

Drogerie Stores

903

21.7%

907

20.7%

919

19.7%

 

 

 

 

 

 

 

Number of Customers, million

355

8.3%

383

9.9%

378

10.5%

Convenience stores

301

8.9%

326

10.6%

320

10.9%

Hypermarkets

21

(0.1%)

21

0.2%

22

3.1%

Supermarkets

12

6.7%

12

5.7%

12

8.4%

Drogerie Stores

22

9.9%

23

12.3%

23

13.3%

 

 

 

 

 

 

 

Retail Sales1, million RUR

96,110

4.4%

100,929

3.9%

102,779

7.6%

Convenience stores

73,122

5.8%

77,214

5.0%

78,011

8.5%

Hypermarkets

11,385

(6.3%)

11,522

(7.5%)

12,118

(1.7%)

Supermarkets

5,059

4.2%

5,120

1.5%

5,312

6.8%

Drogerie Stores

6,545

10.2%

7,073

15.9%

7,338

16.8%

  1 Excluding Wholesale

 

2Q and 1H 2018 Key Operating Metrics:

 

 

 

 

 

 

 

2Q 2018

2Q 2017

Y-o-Y, %

1H 2018

1H 2017

Y-o-Y, %

New Store Openings (NET)

335

535

n/a

610

785

n/a

Convenience stores

220

405

n/a

378

593

n/a

Hypermarkets

2

3

n/a

1

3

n/a

Supermarkets

3

1

n/a

5

(4)

n/a

Drogerie Stores

110

126

n/a

226

193

n/a

 

 

 

 

 

 

 

Number of Stores (EOP)

16,960

14,844

n/a

16,960

14,844

n/a

Convenience stores

12,503

11,114

n/a

12,503

11,114

n/a

Hypermarkets

244

240

n/a

244

240

n/a

Supermarkets

213

190

n/a

213

190

n/a

Drogerie Stores

4,000

3,300

n/a

4,000

3,300

n/a

 

 

 

 

 

 

 

New Selling Space, th. sq. m.

115

172

n/a

190

252

n/a

Convenience stores

81

133

n/a

134

199

n/a

Hypermarkets

4

7

n/a

(4)

7

n/a

Supermarkets

5

0

n/a

6

(4)

n/a

Drogerie Stores

25

32

n/a

53

49

n/a

 

 

 

 

 

 

 

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

5,945

5,320

11.7%

5,945

5,320

11.7%

Convenience stores

4,092

3,652

12.1%

4,092

3,652

12.1%

Hypermarkets

698

691

1.0%

698

691

1.0%

Supermarkets

235

209

12.6%

235

209

12.6%

Drogerie Stores

919

768

19.7%

919

768

19.7%

 

 

 

 

 

 

 

Number of Customers, million

1,116

1,018

9.6%

2,121

1,944

9.1%

Convenience stores

947

860

10.2%

1,795

1,636

9.7%

Hypermarkets

64

63

1.1%

123

123

0.6%

Supermarkets

36

34

6.9%

69

65

6.1%

Drogerie Stores

68

61

11.9%

134

121

10.7%

 

 

 

LFL Results:

 

 

2Q 2018 - 2Q 20172

 

 

Formats

# of Stores

Average Ticket

Traffic

Sales

Convenience stores

9,515

(3.3%)

(2.2%)

(5.4%)

Hypermarkets

227

(6.3%)

(0.4%)

(6.7%)

Supermarkets

171

(3.0%)

(2.8%)

(5.7%)

Drogerie Stores

3,093

2.9%

(2.2%)

0.7%

Total

13,006

(3.1%)

(2.1%)

(5.2%)

 

1H 2018 - 1H 20172

 

Formats

# of Stores

Average Ticket

Traffic

Sales

Convenience stores

9,049

(1.8%)

(3.0%)

(4.7%)

Hypermarkets

227

(4.7%)

(1.2%)

(5.8%)

Supermarkets

171

(1.8%)

(2.8%)

(4.5%)

Drogerie Stores

3,026

3.7%

(3.1%)

0.4%

Total

12,473

(1.7%)

(2.9%)

(4.5%)

 

 

 2 LFL calculation base includes stores (all formats), which have been opened 12 months prior to the last month of the reporting period. i.e. by June 1,
2017

 

 

2Q and 1H 20183 Key Financial Results, million RUR

 

 

 

2Q 2018

2Q 2017

Growth Rate

1H 2018

1H 2017

Growth Rate

Net sales

306,701

288,042

6.5%

595,263

555,025

7.2%

Convenience stores

228,348

214,535

6.4%

443,648

411,817

7.7%

Hypermarkets

35,025

36,940

(5.2%)

68,882

71,737

(4.0%)

Supermarkets

15,490

14,870

4.2%

30,184

28,727

5.1%

Drogerie Stores

20,956

18,326

14.4%

42,031

36,960

13.7%

Wholesale

6,883

3,372

104.1%

10,517

5,784

81.8%

Gross Profit

75,270

78,743

(4.4%)

147,172

148,565

(0.9%)

Gross Margin, %

24.5%

27.3%

n/a

24.7%

26.8%

n/a

EBITDAR

36,321

38,896

(6.6%)

69,411

70,517

(1.6%)

EBITDAR Margin, %

11.8%

13.5%

n/a

11.7%

12.7%

n/a

EBITDA

23,663

27,795

(14.9%)

44,163

48,790

(9.5%)

Adjusted EBITDA

25,163

27,795

(9.5%)

45,663

48,790

(6.4%)

EBITDA Margin, %

7.7%

9.6%

n/a

7.4%

8.8%

n/a

Adjusted EBITDA Margin, %

8.2%

9.6%

n/a

7.7%

8.8%

n/a

EBIT

14,998

19,432

(22.8%)

26,726

32,342

(17.4%)

EBIT Margin, %

4.9%

6.7%

n/a

4.5%

5.8%

n/a

Net Income

10,360

13,205

(21.5%)

17,765

20,748

(14.4%)

Net Income Margin, %

3.4%

4.6%

n/a

3.0%

3.7%

n/a

  3 Please follow the link to view 1H 2018 financial report http://ir.magnit.com/en/financial-reports/

 

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:

 

 

 

Dina Svishcheva

Investor Relations

Email: Chisty[email protected]

Office: +7-861-277-4554 x 15101


Media Inquiries

Media Relations Department Email: [email protected]

 

 

 

 

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, 2018, Magnit operated 37 distribution centers and 16,960 stores (12,503 convenience, 244 hypermarkets, 213 supermarkets and 4,000 drogerie stores) in 2,808 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the reviewed IFRS consolidated financial statements for 1H 2018, Magnit had revenues of RUB 595 billion and an EBITDA of RUB 44 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.




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