OJSC MAGNIT: Magnit December/12M 2013 Results

Press-release 
Krasnodar 
January 10, 2014 
OJSC "Magnit" Announces 29.22% Retail Sales Growth in Rubles for 2013[1] 
Krasnodar, January 10, 2014: OJSC "Magnit", Russia's largest
retailer (the "Company"; MICEX and LSE: MGNT) announces 29.22% retail sales
growth in rubles for 2013. 
During December 2013 the Company opened (net) 173 stores. The total
store base reached 8,093 stores (7,200 convenience stores, 161 hypermarkets,
46 "Magnit Family" stores and 686 cosmetics stores). 
Preliminary consolidated unaudited net retail revenue (excl. VAT)
in 12M 2013 increased by 29.22% in ruble terms (compared to 12M 2012) and
stood at 579,528.48 million rubles. 
Magnit Sales Growth guidance for 2013 (28-29%) has been achieved
with full-year actual Sales Growth of 29.22%. 
For the month of December 2013, please note the following reasons
for the slowdown year-to-year in the monthly Sales Growth rate: 
1. A decline of consumer activity of households which was reflected
in the slowdown of the average ticket growth rates in December 2013 y-o-y. We
see a clear trend of customers refocusing towards products in lower price
segments. This trend is representative of all product categories and social
consumer groups. Nonetheless, it is important to note that there is no abrupt
transition from the expensive to the cheap but the changes are of a smooth
nature and as a rule one level lower in price category. 
2. A slowdown in sales growth rates for convenience stores, which
began on December 20th. The slowdown was due to the following factors: 
A. The growth in the number of large formats now operating in
Russia. In the last year there were a massive number of openings, which
resulted in a transition of consumer preferences in favor of Hypermarkets and
Shopping Centers during the period of the New Year holidays. This fact can be
seen by the growth of sales for Magnit's hypermarkets in the above-listed
period. This trend is consumer preferences is traditional for food retail
globally and has become noticeable in Russia in 2013, in particular. 
B. Abnormally warm weather in the second half of December in the
European part of Russia (8 degrees Celsius warmer on average) resulted in
higher activity for open markets and grocery fairs compared to the previous
years. 
We assume that the future New Year's sales growth rate for
convenience stores should not exceed 15-17%. 
Magnit is pleased by the sales and efficiency results achieved in
2013. Please note that on January 27th, 2014 Magnit will publish a press
release with its unaudited full-year "management accounts" results. 
[1] According to management accounts 
December 2013 Key Operating and Financial Highlights: 
                                                 December 2013         
December 2012           Growth Rate
Number of opened stores, NET                                       173           


         407                      n/a
                              convenience stores                   140          
         293                      n/a
                                    hypermarkets                     9          
          13                      n/a
                                   magnit family                    12          
           3                      n/a
                                cosmetics stores                    12          


      98                      n/a 
Total number of stores                                           8,093           


       6,884                      n/a
                              convenience stores                 7,200          
       6,046                      n/a
                                    hypermarkets                   161          
         126                      n/a
                                   magnit family                    46          
          20                      n/a
                                cosmetics stores                   686          


     692                      n/a 
Selling space growth, thousand sq.m.                             77.51           


      156.68                      n/a
                              convenience stores                 38.90          
       89.38                      n/a
                                    hypermarkets                 22.82          
       39.13                      n/a
                                   magnit family                 13.24          
        4.00                      n/a
                                cosmetics stores                  2.55          


   24.17                      n/a 
Selling space, eop, thousand sq. m.                           3,011.38           


    2,549.26                   18.13%
                              convenience stores              2,312.20          
    1,977.46                   16.93%
                                    hypermarkets                482.88          
      387.62                   24.58%
                                   magnit family                 53.26          
       24.36                  118.67%
                                cosmetics stores                163.04          


  159.83                      n/a 
Number of customers, million                                    234.52           


      196.11                   19.59%
                              convenience stores                204.82          
      175.30                   16.84%
                                    hypermarkets                 20.15          
       15.35                   31.29%
                                   magnit family                  3.79          
        1.81                  109.64%
                                cosmetics stores                  5.76          


    3.65                      n/a 
Net retail sales, million RUR                                63,624.03           
51,779.25                   22.88% 
                          convenience stores             47,132.34           
39,895.20                   18.14% 
                                hypermarkets             13,221.25           
10,129.09                   30.53% 


                                   magnit family              1,640.41          
      732.01                  124.10%
                                cosmetics stores              1,630.03          


1,022.96                      n/a 
Net retail sales, million US$[2]                              1,934.18           


    1,684.38                   14.83%
                              convenience stores              1,432.83          
    1,297.79                   10.41%
                                    hypermarkets                401.93          
      329.50                   21.98%
                                   magnit family                 49.87          
       23.81                  109.43%
                                cosmetics stores                 49.55          
       33.28                      n/a

[2] Based on the average exchange rate for December 2013 of 32.8945
RUB per 1 USD, December 2012 - 30.7408 RUB per 1 USD



4Q and 12M 2013 Key Operating and Financial Highlights:


                                 4Q 2013       4Q 2012      Growth Rate    
12М 2013    12М 2012    Growth Rate
Number of opened stores, NET                447           765             n/a    


     1,209       1,575             n/a
               convenience stores           417           523             n/a   
     1,154       1,040             n/a
                     hypermarkets            13            21             n/a   
        35          36             n/a
                    magnit family            16             9             n/a   
        26          17             n/a
                 cosmetics stores             1           212             n/a   


   (6)         482             n/a 
Total number of stores                    8,093         6,884             n/a    


     8,093       6,884             n/a
               convenience stores         7,200         6,046             n/a   
     7,200       6,046             n/a
                     hypermarkets           161           126             n/a   
       161         126             n/a
                    magnit family            46            20             n/a   
        46          20             n/a
                 cosmetics stores           686           692             n/a   


   686         692             n/a 
Selling space growth, th. sq.m.          169.99        288.38             n/a    


    462.12      579.09             n/a
               convenience stores        116.46        164.03             n/a   
    334.74      339.63             n/a
                     hypermarkets         34.43         62.93             n/a   
     95.26      109.17             n/a
                    magnit family         17.83         10.73             n/a   
     28.91       20.56             n/a
                 cosmetics stores          1.27         50.68             n/a   


  3.21      109.74             n/a 
Selling space, eop, th. sq. m.         3,011.38      2,549.26          18.13%   
  3,011.38    2,549.26          18.13% 
           convenience stores      2,312.20      1,977.46          16.93%   
  2,312.20    1,977.46          16.93% 


                     hypermarkets        482.88        387.62          24.58%   
    482.88      387.62          24.58%
                    magnit family         53.26         24.36         118.67%   
     53.26       24.36         118.67%
                 cosmetics stores        163.04        159.83             n/a   


163.04      159.83             n/a 
Number of customers, million             656.92        549.44          19.56%   
  2,465.05    2,033.43          21.23% 
           convenience stores        579.17        497.07          16.52%   
  2,193.87    1,863.62          17.72% 


                     hypermarkets         53.45         39.47          35.42%   
    193.06      137.69          40.21%
                    magnit family          9.57          4.34         120.63%   
     29.60        8.87         233.84%
                 cosmetics stores         14.73          8.56             n/a   


 48.52       23.25             n/a 
Net retail sales, million RUR        162,467.00    129,153.84          25.79%   
579,528.48  448,486.20          29.22% 
           convenience stores    123,796.88    102,481.13          20.80%   
450,801.48  364,236.40          23.77% 
                 hypermarkets     31,180.71     22,881.23          36.27%   
106,175.58   75,418.70          40.78% 
                magnit family      3,695.40      1,583.85         133.32%   
 10,678.07    3,098.58         244.61% 
             cosmetics stores      3,794.01      2,207.63             n/a   
 11,873.35    5,732.51             n/a 
Net retail sales, million US$[3]       4,993.85      4,155.97          20.16%   
 18,196.70   14,424.02          26.16% 
           convenience stores      3,805.22      3,297.68          15.39%   
 14,154.78   11,714.42          20.83% 
                 hypermarkets        958.42        736.28          30.17%   
  3,333.82    2,425.58          37.44% 


                    magnit family        113.59         50.97         122.87%   
    335.28       99.66         236.44%
                 cosmetics stores        116.62         71.04             n/a   
    372.81      184.37             n/a

[3] Based on the average exchange rate for 4Q 2013 - 32.5334 RUB
per 1 USD, 4Q 2012 - 31.0767 RUB per 1 USD, 12M 2013 - 31.8480 RUB per 1 USD,
12M 2012 - 31.0930 RUB per 1 USD



LFL Results

LFL growth 4Q 2013 - 4Q 2012[4]       Convenience stores  Hypermarkets   Magnit 
Family  Cosmetics stores     Total
Average ticket (excl. VAT), RUR             4.21%            2.13%           
1.77%           4.92%           4.29%
Traffic                                    (2.03)%           1.75%          
(2.78)%          26.69%         (1.52)%
Revenue, RUR                                2.09%            3.92%          
(1.06)%          32.92%          2.71%
LFL growth 12М 2013 - 12М 2012[5]  Convenience stores  Hypermarkets   Magnit 
Family   Cosmetics stores     Total
Average ticket (excl. VAT), RUR            5.35%            2.04%           
5.01%            3.72%           5.22%
Traffic                                   (1.57)%           2.52%           
7.41%            10.54%         (1.28)%
Revenue, RUR                               3.70%            4.61%           
12.80%           14.65%          3.88%

For further information, please contact:

Timothy Post                                                Director, Investor 
Relations


                                                        Email: 
post@gw.tander.ru 
                                                        Office: +7-861-277-4554 x7600 
                                                        Mobile: +7-961-511-7678 
                                                        Direct Line: +7-861-277-4562 
Dina Svishcheva                                             Deputy Director, 
Investor Relations 
                                                        Email: 
Chistyak@gw.tander.ru 
                                                        Office: +7-861-277-45-54 x5101 
                                                        Mobile: +7-961-511-0202 
                                                        Direct Line: +7-861-277-4562 
[4] Based on 4,734 convenience stores and 217 cosmetics stores
which were opened by April 1, 2012, and 90 hypermarkets and 3 Magnit Family
which were opened by February 1, 2012, i.e. based on the result of the
convenience stores that had been operating for not less than six months and
hypermarkets that had been operating for not less than eight months and have
achieved a mature level of sales. 
[5] Based on 3,487 convenience stores and 18 cosmetics stores which
were opened by July 1, 2011, and 60 hypermarkets and 1 Magnit Family which
were opened by May 1, 2011, i.e. based on the result of the convenience stores
that had been operating for not less than six months and hypermarkets that had
been operating for not less than eight months and have achieved a mature level
of sales 
Company description: 
Magnit is Russia's largest retailer. Founded in 1994, the company
is headquartered in the southern Russian city of Krasnodar. As of December 31,
2013, Magnit operated 22 distribution centers and over 8,000 stores (7,200
convenience, 207 hypermarkets, and 686 cosmetics) in more than 1,868 cities
and towns throughout 7 federal regions of the Russian Federation. 
In accordance with its reviewed IFRS consolidated financial
statements, Magnit had 1H 2013 revenues of $8.7 billion USD and an EBITDA of
$890 million USD. Magnit's local shares are traded on the Moscow Stock
Exchange (MICEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT)
and it has a credit rating from Standard & Poor's of BB. Measured by market
capitalization, Magnit is now Europe's 2nd largest food retailer. 
-0- Jan/10/2014 07:00 GMT
 
 
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