Magnit

Earnings Release • Mar 25, 2015

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PJSC MAGNIT - Audited FY 2014 Financial Results

PR Newswire

London, March 25

Press-releaseKrasnodarMarch 25, 2015PJSC "Magnit" Announces Audited FY 2014 ResultsKrasnodar, March 25, 2015: PJSC "Magnit", Russia's largest retailer(the "Company"; MOEX and LSE: MGNT) announces its audited FY 2014 resultsprepared in accordance with IFRS.During 2014 the Company added (net) 1,618 stores (1,144 conveniencestores, 29 hypermarkets, 51 "Magnit Family" stores and 394 drogerie stores)and increased its selling space by 19.24% in comparison to 2013 from 3,011.38thousand sq. m. to 3,590.64 thousand sq. m. The total store base as ofDecember 31, 2014 reached 9,711 stores (8,344 convenience stores, 190hypermarkets, 97 "Magnit Family" stores and 1,080 drogerie stores).Revenue increased by 31.71% YoY from 579,694.88 million RUR in 2013to 763,527.25 million RUR in 2014. The top line growth was due to an increasein selling space as well as to a 14.47% increase of like-for-like sales.Gross margin grew from 28.51% in 2013 to 28.88% in 2014. Grossprofit increased by 33.44% from 165,262.99 million RUR to 220,520.56 millionRUR.EBITDA increased by 32.74% from 64,721.23 million RUR in 2013 to85,909.67 million RUR in 2014. EBITDA margin in 2014 amounted to 11.25%.EBITDA margin in the 4Q of 2014 was 11.46%. Net Debt / EBITDA ratio (in rubleterms) for 2014 amounted to 0.91.2014 net income increased by 33.87% and amounted to 47,685.84million RUR vs. 35,620.38 million RUR in 2013. Net income margin for 2014 was6.25%.Key figures presented in this press-release are immaterially highercompared to numbers under management accounts announced by the Company onJanuary 27, 2015. Thus, according to the audited FY 2014 results EBITDAR,EBITDA, EBIT and Net Income margins are higher by 5 b. p.4Q and FY 2014 Key Operating Highlights: 4Q 2014 4Q 2013 Growth Rate 12М 2014 12М 2013 Growth RateNumber of opened stores, NET 691 447 n/a 1,618 1,209 n/a convenience stores 453 417 n/a 1,144 1,154 n/a hypermarkets 15 13 n/a 29 35 n/a magnit family 29 16 n/a 51 26 n/a drogerie stores 194 1 n/a 394 (6) n/aTotal number of stores 9,711 8,093 n/a 9,711 8,093 n/a convenience stores 8,344 7,200 n/a 8,344 7,200 n/a hypermarkets 190 161 n/a 190 161 n/a magnit family 97 46 n/a 97 46 n/a drogerie stores 1,080 686 n/a 1,080 686 n/aSelling space, eop, th. sq. m. 3,590.64 3,011.38 19.24% 3,590.64 3,011.38 19.24% convenience stores 2,673.31 2,312.20 15.62% 2,673.31 2,312.20 15.62% hypermarkets 559.09 482.88 15.78% 559.09 482.88 15.78% magnit family 109.07 53.26 104.78% 109.07 53.26 104.78% drogerie stores 249.17 163.04 52.83% 249.17 163.04 52.83%Selling space growth, th. sq.m. 263.64 169.99 n/a 579.26 462.12 n/a convenience stores 153.60 116.46 n/a 361.11 334.74 n/a hypermarkets 37.11 34.43 n/a 76.21 95.26 n/a magnit family 30.24 17.83 n/a 55.81 28.91 n/a drogerie stores 42.69 1.27 n/a 86.13 3.21 n/aNumber of customers, million 785.28 656.92 19.54% 2,944.12 2,465.05 19.43% convenience stores 676.19 579.17 16.75% 2,567.15 2,193.87 17.01% hypermarkets 64.50 53.45 20.67% 237.59 193.06 23.06% magnit family 19.67 9.57 105.68% 60.93 29.60 105.86% drogerie stores 24.91 14.73 69.18% 78.45 48.52 61.68%LFL ResultsFormats 4Q 2014 - 4Q 2013[1] # of Stores Average Ticket Traffic SalesConvenience Stores 6,634 12.82% 3.77% 17.07%Hypermarkets 152 10.83% 5.06% 16.43%Magnit Family 34 11.96% 6.76% 19.53%Drogerie Stores 591 5.49% 23.08% 29.84%Total 7,411 12.41% 4.33% 17.28%Formats 12M 2014 - 12M 20134 # of Stores Average Ticket Traffic SalesConvenience Stores 6,014 9.81% 3.68% 13.85%Hypermarkets 152 7.98% 5.63% 14.05%Magnit Family 33 9.28% 8.87% 18.97%Drogerie Stores 500 3.76% 35.69% 40.79%Total 6,699 9.58% 4.47% 14.47%4Q[2] and FY 2014 Key Financial Results, million RUR[3] 4Q 2014 4Q 2013 Growth Rate FY 2014 FY 2013 Growth RateNet sales 220,852.25 162,515.22 35.90% 763,527.25 579,694.88 31.71% convenience stores 163,402.85 123,796.88 31.99% 577,75.77 450,801.48 28.17% hypermarkets 41,305.33 31,180.71 32.47% 139,655.12 106,175.58 31.53% magnit family 9,023.09 3,695.40 144.17% 25,533.74 10,678.07 139.12% cosmetics stores 6,701.76 3,794.01 76.64% 19,756.68 11,873.35 66.40% wholesale 419.21 48.21 n/a 805.94 166.40 n/aGross profit 65,044.14 48,602.93 33.83% 220,520.56 165,262.99 33.44%Gross margin, % 29.45% 29.91% n/a 28.88% 28.51% n/aEBITDAR 31,251.81 24,483.46 27.64% 106,483.50 79,678.33 33.64%EBITDAR margin, % 14.15% 15.07% n/a 13.95% 13.74% n/aEBITDA 25,302.11 20,315.55 24.55% 85,909.67 64,721.23 32.74%EBITDA margin, % 11.46% 12.50% n/a 11.25% 11.16% n/aEBIT 20,615.00 16,488.07 25.03% 68,300.00 50,536.88 35.15%EBIT margin, % 9.33% 10.15% n/a 8.95% 8.72% n/aNet income 13,793.19 11,790.47 16.99% 47,685.84 35,620.38 33.87%Net income margin, % 6.25% 7.25% n/a 6.25% 6.14% n/a4Q[4] and FY 2014 Key Financial Results, US$[5] million[6] 4Q 2014 4Q 2013 Growth Rate FY 2014 FY 2013 Growth RateNet sales 4,656.94 4,995.33 (6.77)% 19,872.29 18,201.92 9.18% convenience stores 3,445.55 3,805.22 (9.45)% 15,037.75 14,154.78 6.24% hypermarkets 870.97 958.42 (9.12)% 3,634.80 3,333.82 9.03% magnit family 190.26 113.59 67.50% 664.57 335.28 98.21% cosmetics stores 141.31 116.62 21.18% 514.21 372.81 37.93% wholesale 8.84 1.48 n/a 20.98 5.22 n/aGross profit 1,371.54 1,493.94 (8.19)% 5,739.49 5,189.12 10.61%Gross margin, % 29.45% 29.91% n/a 28.88% 28.51% n/aEBITDAR 658.98 752.56 (12.43)% 2,771.45 2,501.83 10.78%EBITDAR margin, % 14.15% 15.07% n/a 13.95% 13.74% n/aEBITDA 533.53 624.45 (14.56)% 2,235.97 2,032.19 10.03%EBITDA margin, % 11.46% 12.50% n/a 11.25% 11.16% n/aEBIT 434.69 506.80 (14.23)% 1,777.64 1,586.81 12.03%EBIT margin, % 9.33% 10.15% n/a 8.95% 8.72% n/aNet income 290.85 362.41 (19.75)% 1,241.12 1,118.45 10.97%Net income margin, % 6.25% 7.25% n/a 6.25% 6.14% n/aNote: net revenue in US$ terms is calculated using the averageexchange rate for the period.For further information, please contact:Timothy Post Director, Investor Relations Email: post@magnit.ru Office: +7-861-277-4554 x 17600 Mobile: +7-961-511-7678 Direct Line: +7-861-277-4562Dina Svishcheva Deputy Director, Investor Relations Email: Chistyak@magnit.ru Office: +7-861-277-45-54 x 15101 Mobile: +7-961-511-0202 Direct Line: +7-861-277-4562Company description:Magnit is Russia's largest food retailer. Founded in 1994, thecompany is headquartered in the southern Russian city of Krasnodar. As ofDecember 31, 2014, Magnit operated 27 distribution centers and over 9,700stores (8,344 convenience, 287 hypermarkets, and 1,080 drogerie stores) inapproximately 2,100 cities and towns throughout 7 federal regions of theRussian Federation.In accordance with the audited IFRS consolidated financialstatements for 2014, Magnit had revenues of RUB 764 billion and an EBITDA ofRUB 86 billion. Magnit's local shares are traded on the Moscow Stock Exchange(MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it hasa credit rating from Standard & Poor's of BB. Measured by marketcapitalization, Magnit is one of the largest retailers in Europe.---------------------------------[1] LFL calculation base includes stores (all formats), which havebeen opened 12 months prior to the last month of the reporting period. i.e. byDecember 1, 2013.[2] Unaudited results[3] Please follow the link to view FY 2014 financial reporthttp://ir.magnit.com/en/financial-reports/[4] Unaudited results[5] Based on the average exchange rate for 4Q 2014 - 47.4243 RUB per 1 USD, 4Q2013 - 32.5334 RUB per 1 USD, 12M 2014 - 38.4217 RUB per 1 USD, 12M 2013 -31.8480 RUB per 1 USD[6] Please follow the link to view FY 2014 financial reporthttp://ir.magnit.com/en/financial-reports/