PJSC 'Magnit' Announces Audited FY 2018 Results


PJSC 'Magnit' Announces Audited FY 2018 Results

15-March-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.

PJSC "Magnit" Announces Audited FY 2018 Results

Krasnodar, Russia (15 March, 2019): Magnit PJSC (MOEX and LSE: MGNT), one of Russia's leading retailers announces its audited FY 2018 results prepared in accordance with IFRS.

Key figures presented in this press release immaterially differ from the numbers under management accounts announced by Magnit on February 7, 2019.

Key operating and financial highlights for 2018:

Revenue increased by 8.2% from 1,143 billion RUR in 2017 to 1,237 billion RUR in 2018.

The company opened 2,049 stores on net basis (1,302 convenience stores, 731 drogerie stores and 16 supermarkets). Total store base reached 18,399 stores as 2018 year-end.

Addition of selling space in 2018 amounted to 669 thousand sq. m. (or 11.6% growth YoY) compared to 687 thousand sq. m. in 2017.

LFL1 sales declined (2.5%) composed of 0.1% growth of average ticket and (2.6%) traffic decline, but demonstrated positive dynamics towards the end of the year.

Gross Profit2 margin in 2018 was 24.0%. Margin contraction of 136bps vs previous year was a result of a combination of investments into prices, higher share of wholesale segment as well as share of fresh & food segment in total sales, sell off of slow-moving assortment accumulated in 2017 and first half of 2018 and higher transportation costs, offset partially by improved commercial terms from suppliers.

SG&A expenses as percentage of sales improved by 59bps to 20.3%. The main driver of improvement were payroll expenses due to increased productivity being partly offset by higher rent and bank services.

EBITDA3 in 2018 was 89.9 billion RUR. Full year EBITDA margin was 7.3% or 75bps lower than a year ago driven by gross margin dynamics partly mitigated by increased operating efficiency.

Net finance costs decreased by 17.3% to RUR 10.3 billion compared to 2017 (RUR 12.5 billion) due to a reduction of interest rates despite higher net debt.

Other income was 11.1% higher in 2018 vs 2017 and reached RUR 7.8 billion. As a percentage of revenue it showed marginal improvement by 2bps.

Income tax for 2018 was RUR 9.2 billion. Effective tax rate was 21.4% vs 21.8% in 2017.

As a result, we achieved net income of RUR 33.9 billion and margin of 2.7% in 2018 went down YoY by 4.7% and 37bps respectively.

Capital expenditures of RUR 53.8 billion for 2018 were 28.5% less than in 2017. This was a result of lower number of openings and redesigned stores and more efficient capital deployment for new store openings.

Net cash generated from operating activities before net interest and income taxes paid decreased modestly by 0.1% to RUR 78.8 billion as a result of positive working capital movements offset by lower profit before income tax.

As of 31 December 2018 Net Debt was RUR 137.8 billion. Compared to the end of 2017 it was RUR 29.7 billion higher due to buy-back program and debt inherited with SIA acquisition. Net Debt / EBITDA was 1.5x.

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