In 4Q 2020 the Company reported FX gains in the amount of RUB 0.4 billion related to direct import operations.
Income tax in 4Q 2020 was RUB 3.0 billion. Effective tax rate has normalized to 21.0%.
As a result, net income in 4Q 2020 almost tripled y-o-y and stood at RUB 11.1 billion. Net income margin increased to 2.7%.
Financial results for 4Q and FY 2020 (IFRS 16)
million RUB 4Q 2020 4Q 2019 Change FY 2020 FY 2019 Change Total revenue 407,227 368,206 10.6% 1,553,777 1,368,705 13.5% Retail 395,160 356,953 10.7% 1,510,071 1,332,929 13.3% Wholesale 12,067 11,253 7.2% 43,707 35,777 22.2% Gross Profit 95,054 79,747 19.2% 365,756 311,999 17.2% Gross Margin, % 23.3% 21.7% 168 bps 23.5% 22.8% 74 bps SG&A, % of sales -19.2% -18.8% -43 bps -19.1% -19.8% 70 bps EBITDA pre LTI8 47,122 37,496 25.7% 179,043 149,309 19.9% EBITDA Margin pre LTI, % 11.6% 10.2% 139 bps 11.5% 10.9% 61 bps EBITDA 46,911 37,043 26.6% 178,189 147,310 21.0% EBITDA Margin, % 11.5% 10.1% 146 bps 11.5% 10.8% 71 bps EBIT 23,541 16,253 44.8% 88,424 59,216 49.3% EBIT Margin, % 5.8% 4.4% 137 bps 5.7% 4.3% 136 bps Net finance costs -10,568 -11,964 -11.7% -44,268 -47,509 -6.8% FX gain / (loss) 485 273 77.5% -1,453 873 -266.5% Profit before tax 13,458 4,562 195.0% 42,703 12,579 239.5% Taxes -2,839 -57 n/a -9,709 -3,015 222.0% Net Income 10,619 4,505 135.7% 32,993 9,564 245.0% Net Income Margin, % 2.6% 1.2% 138 bps 2.1% 0.7% 142 bps
Balance Sheet and Cash Flows
Financial Position Highlights as of 31.12.2020 (IAS 17)
Million RUB 31.12.2020 31.12.2019 Inventories 205,949 218,874 Trade and other receivables 8,564 13,993 Cash and cash equivalents 44,700 8,901 Long-term borrowings 147,695 119,632 Trade and other payables 161,117 161,676 Short-term borrowings and short-term portion of long-term borrowings 18,392 64,578
Despite ongoing improvement to on-shelf availability, the increased share of drogerie format by 66 bps as a percent of net retail sales, supplier inflation and total sales growth of 13.5%, inventories decreased by RUB 12.9 billion vs December 31, 2019 and stood at RUB 205.9 billion. This was driven by a number of projects launched in 2020 including a reduction of slow-moving items, assortment harmonization and IT solutions aimed at better on-shelf availability and promo forecasting.
Trade and other payables remained flat y-o-y and stood at RUB 161.1 billion. RUB 4.7 billion increase in trade payables driven by improvement of payment days was offset by RUB 5.2 billion decrease of other payables related to high pace of expansion in 2019. Accounts receivables decreased by RUB 5.4 billion or 38.8% to RUB 8.6 billion as a results of ongoing optimisation initiatives including weekly tracking of overdue debts and clearing activities as well as launch of electronic document flow with suppliers.
Working capital management was one of the key priorities of the Company throughout 2020 with a special focus on the second half of the year. A number of ongoing initiatives, including optimization of receivables, electronic document flow, cross-functional projects aiming at reducing inventories, etc. resulted in RUB 30.5 billion release from working capital.
31 December 2020 30 June 2020 31 December 2019
Gross Debt, RUB billion 166.1 208.6 184.2
Net Debt, RUB billion 121.4 187.4 175.3
Net Debt/EBITDA 1.1x 2.0x 2.1x As a results of repayment activities gross Debt decreased by RUB 18.1 billion or 9.8% compared to December 31, 2019 and stood at RUB 166.1 billion as of December 31, 2020 with cash position of RUB 44.7 billion. As a result, Net Debt reduced by RUB 53.9 billion compared to December 31, 2019 and stood at RUB 121.4 billion. The Company's debt is fully RUB denominated matching revenue structure. The Net Debt to EBITDA ratio was 1.1x as at 31 December 2020 vs 2.1x as at 31 December 2019.
Capex in 2020 decreased by 45.2% y-o-y to RUB 32.1 billion following a slowdown of expansion program (1,292 store openings on gross basis in 2020 vs 2,841 in 2019) and decelerated redesign program (385 stores in 2020 vs 2,341 stores in 2019). Capex in 2020 came below the Company's guidance on lower than expected expansion given pandemic restrictions and management's intention to expand selectively following strict return requirements.
FY 2021 Guidance
Number of store openings (all formats, gross) 2,000 Number of redesigns (all formats) 700 CAPEX, RUB billion 60-65
In 2021 Magnit plans to open around 2,000 stores of different format on gross basis as part of its organic expansion. Store opening program of the current year reflects strict return requirement and continued focus on operating efficiency.
Capital expenditures projections for 2021 reflect increase of investments in organic expansion and redesign as well as ongoing spending on efficiency projects focused on business development, such as optimization of supply-chain and IT infrastructure, and others.
Note: 1. This announcement contains inside information disclosed in accordance with the Market Abuse Regulation effective
from July 3, 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: dmitry_kovalenko@magnit.ru
Office: +7 (861) 210-48-80
Dina Chistyak
Director for Investor Relations
Email: dina_chistyak@magnit.ru
Office: +7 (861) 210-9810 x 15101
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, 2020, Magnit operated 38 distribution centres and 21,564 stores (14,911 convenience, 470 supermarkets and 6,183 drogerie stores) in 3,752 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the unaudited IFRS 16 management accounts 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 forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and 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 superstores
[4] Other Formats include pharmacies and stores located at Russian Post offices
[5] Excluding VAT
[6] Excluding leap year effect, i.e. based on trading results of February 1-28, 2020
[7] Excluding VAT
[8] Long-Term Incentive Program -----------------------------------------------------------------------------------------------------------------------
ISIN: US55953Q2021 Category Code: MSCU TIDM: MGNT LEI Code: 2534009KKPTVL99W2Y12 OAM Categories: 2.2. Inside information Sequence No.: 92881 EQS News ID: 1165683 End of Announcement EQS News Service =------------------------------------------------------------------------------------
(END) Dow Jones Newswires
February 04, 2021 01:59 ET (06:59 GMT)
