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DGAP-UK-Regulatory News vom 22.10.2018

PJSC 'Magnit' Announces Unaudited 3Q 2018 Results

MAGNIT PJSC (MGNT)

22-Oct-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 | October 22, 2018

 

 

PJSC "Magnit" Announces Unaudited 3Q 2018 Results

 

Krasnodar, Russia (22 October, 2018): Magnit PJSC (MOEX and LSE: MGNT), one of Russia's leading retailers announces its unaudited 3Q 2018 results prepared in accordance with IFRS1.

 

 

 

 

Revenue increased by 8.4% from 286 billion RUB in 3Q 2017 to 310 billion RUR in 3Q 2018 on the back of significant LFL sales recovery to -2.0% compared to -5.2% in the previous quarter. The change of the LFL sales trend dynamics across all formats is the result of the improved CVP achieved through the new developments of the category management and promo activity. The best performance was demonstrated by "Magnit Cosmetic" stores - LFL sales reached 3.9% in 3Q 2018 on the back of 3.8% LFL average ticket growth and 0.1% traffic growth.

During 3Q 2018 Magnit added (net) 482 stores. The total store base as of September 30, 2018 reached 17,442 stores (12,813 convenience stores, 457 supermarkets and 4,172 drogerie stores). Addition of selling space in 9M 2018 was 337 thousand sq. m. compared to 495 thousand sq. m.in 9M 2017. The quality of new store openings has improved which supported sales density growth of the new stores compared to the existing store base. All new stores are being opened under the new format with the improved layout, design, navigation and equipment. We have redesigned 380 stores in 3Q 2018.

EBITDA in 3Q 2018 increased by 5.3% y-o-y compared to the negative dynamics in 2Q this year. EBITDA margin in 3Q 2018 was 7.0%. There was a seasonal decrease compared to 2Q 2018. Nevertheless, this year traditional seasonal decrease moderated. The 23.9% decrease of gross margin was largely offset by the cost optimization initiatives: payroll expenses due to the reduction in the number of the management personnel and the packaging and raw materials due to the introduction of the tender procedures and lower procurement prices.


Net Income increased by 10% from 6.9 billion RUB in 3Q 2017 to 7.6 billion RUB in 3Q 2018. The key factor which impacted the more pronounced positive dynamics of net income compared to EBITDA in 3Q 2018 was the improvement of interest expense due to lower credit rates this year compared to the previous year. Net Income Margin in 3Q 2018 was 2.5%.

 

 

 

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

 

"At the first stage of transformation the key indicator of the positive dynamics for us is the like-for-like improvement. For the first time this year we see LFL trends changing. This improvement underlines that our customers respond positively to the implemented changes in assortment and approach to the promo activity.

 

We are already seeing cost improvements and continue to optimise our efficiency to maintain EBITDA margin.

 

Our transformation strategy shows first signs of recovery of consumer interest in our stores. We are confident that this is the solid base for further success of Magnit team".

 

 

 

 

 

3Q 2018 Monthly Operating Metrics:

 

 

July

Y-o-Y, %

August

Y-o-Y, %

September

Y-o-Y, %

New Store Openings (NET)

78

n/a

130

n/a

274

n/a

Convenience stores

43

n/a

86

n/a

181

n/a

Supermarkets2

3

n/a

(2)

n/a

(1)

n/a

Drogerie Stores

32

n/a

46

n/a

94

n/a

 

 

 

 

 

 

 

Number of Stores (EOP)

17,038

n/a

17,168

n/a

17,442

n/a

Convenience stores

12,546

n/a

12,632

n/a

12,813

n/a

Supermarkets

460

n/a

458

n/a

457

n/a

Drogerie Stores

4,032

n/a

4,078

n/a

4,172

n/a

 

 

 

 

 

 

 

New Selling Space, th. sq. m.

27

n/a

37

n/a

84

n/a

Convenience stores

15

n/a

31

n/a

66

n/a

Supermarkets

5

n/a

(4)

n/a

(3)

n/a

Drogerie Stores

7

n/a

10

n/a

21

n/a

 

 

 

 

 

 

 

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

5,971

11.0%

6,009

10.0%

6,092

9.5%

Convenience stores

4,108

11.0%

4,139

10.0%

4,205

9.5%

Supermarkets

938

4.9%

934

3.9%

931

3.2%

Drogerie Stores

926

18.4%

936

16.8%

956

16.8%

 

 

 

 

 

 

 

Number of Customers, million

389

10.8%

388

8.6%

360

7.0%

Convenience stores

330

11.2%

327

8.5%

304

6.8%

Supermarkets

35

5.5%

35

6.4%

32

4.9%

Drogerie Stores

25

13.7%

25

13.3%

24

12.5%

 

 

 

 

 

 

 

Retail Sales3, million RUR

104,856

7.3%

104,506

9.2%

95,888

7.4%

Convenience stores

79,317

8.2%

78,399

9.4%

71,966

7.5%

Supermarkets

17,858

0.5%

17,962

5.0%

16,322

3.1%

Drogerie Stores

7,680

16.4%

8,145

18.1%

7,600

16.9%

 

 

3Q and 9M 2018 Key Operating Metrics:

 

 

 

 

 

 

 

3Q 2018

3Q 2017

Y-o-Y, %

9M 2018

9M 2017

Y-o-Y, %

New Store Openings (NET)

482

853

n/a

1,092

1,638

n/a

Convenience stores

310

629

n/a

688

1,222

n/a

Supermarkets

0

2

n/a

6

1

n/a

Drogerie Stores

172

222

n/a

398

415

n/a

 

 

 

 

 

 

 

Number of Stores (EOP)

17,442

15,697

n/a

17,442

15,697

n/a

Convenience stores

12,813

11,743

n/a

12,813

11,743

n/a

Supermarkets

457

432

n/a

457

432

n/a

Drogerie Stores

4,172

3,522

n/a

4,172

3,522

n/a

 

 

 

 

 

 

 

New Selling Space, th. sq. m.

148

243

n/a

337

495

n/a

Convenience stores

112

190

n/a

247

389

n/a

Supermarkets

(2)

2

n/a

1

6

n/a

Drogerie Stores

37

51

n/a

90

100

n/a

 

 

 

 

 

 

 

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

6,092

5,562

9.5%

6,092

5,562

9.5%

Convenience stores

4,205

3,841

9.5%

4,205

3,841

9.5%

Supermarkets

931

902

3.2%

931

902

3.2%

Drogerie Stores

956

819

16.8%

956

819

16.8%

 

 

 

 

 

 

 

Number of Customers, million

1,137

1,044

8.8%

3,257

2,988

9.0%

Convenience stores

960

882

8.9%

2,755

2,518

9.4%

Supermarkets

102

97

5.6%

295

284

3.6%

Drogerie Stores

74

65

13.2%

208

186

11.6%

 

 

 

LFL Results:

 

3Q 2018 - 3Q 20174

 

 

Formats

# of Stores

Average Ticket

Traffic

Sales

Convenience stores

9,578

(0.5%)

(2.2%)

(2.7%)

Supermarkets

407

(1.9%)

0.2%

(1.6%)

Drogerie Stores

3,288

3.8%

0.1%

3.9%

Total

13,273

(0.2%)

(1.8%)

(2.0%)

 
  9М 2018 - 20173

 

Formats

# of Stores

Average Ticket

Traffic

Sales

Convenience stores

8,259

(1.3%)

(2.6%)

(3.9%)

Supermarkets

404

(3.1%)

(1.1%)

(4.2%)

Drogerie Stores

3,157

3.7%

(1.9%)

1.8%

Total

11,820

(1.1%)

(2.4%)

(3.4%)

    

 

3Q and 9M 2018 Key Financial Results, million RUR

 

 

 

3Q 2018

3Q 2017

Growth Rate

9M 2018

9M 2017

Growth Rate

Net sales

310,112

285,961

8.4%

905,374

840,985

7.7%

Convenience stores

229,682

211,977

8.4%

673,330

623,793

7.9%

Supermarkets

52,142

50,706

2.8%

151,209

151,170

0.0%

Drogerie Stores

23,425

19,996

17.1%

65,456

56,956

14.9%

Wholesale

4,863

3,283

48.1%

15,380

9,066

69.6%

Gross Profit

73,996

73,285

1.0%

221,168

221,850

(0.3%)

Gross Margin, %

23.9%

25.6%

n/a

24.4%

26.4%

n/a

EBITDAR

34,781

32,582

6.8%

104,895

103,044

1.8%

EBITDAR Margin, %

11.2%

11.4%

n/a

11.6%

12.3%

n/a

EBITDA5

21,742

20,656

5.3%

66,608

69,391

(4.0%)

Adjusted EBITDA

21,742

20,656

5.3%

68,107

69,391

(1.9%)

EBITDA Margin, %

7.0%

7.2%

n/a

7.4%

8.3%

n/a

Adjusted EBITDA Margin, %

7.0%

7.2%

n/a

7.5%

8.3%

n/a

EBIT

12,127

12,208

(0.7%)

39,556

44,496

(11.1%)

EBIT Margin, %

3.9%

4.3%

n/a

4.4%

5.3%

n/a

Net Income

7,618

6,923

10.0%

25,383

27,672

(8.3%)

Net Income Margin, %

2.5%

2.4%

n/a

2.8%

3.3%

n/a

  

 

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

Head of IR

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 September 30, 2018, Magnit operated 37 distribution centers and 17,442 stores (12,813 convenience, 457 supermarkets and 4,172 drogerie stores) in 2,866 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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