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Magnit Announces First Results of Its E-Commerce Pilots

12/18/2020 | 02:00am EDT
Magnit Announces First Results of Its E-Commerce Pilots 
18-Dec-2020 / 09:59 MSK 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
Press-release | Krasnodar | December 18, 2020. 
                     Magnit Announces First Results of Its E-Commerce Pilots 
 Krasnodar, Russia (December 18, 2020): Magnit PJSC (MOEX and LSE: MGNT; the 
       Company), one of Russia's leading retailers, began testing e-commerce 
services in the second half of 2020, with the most recent pilots launched in 
  early December. During the first three months, the pilots' growth dynamics 
     exceeded original expectations and showcased the high potential of this 
 market. Despite being a new entrant in the segment, Magnit already fulfills 
      around 7,000 orders a day, with that number growing steadily by 25% on 
     average every week[1]. According to the Company's analysis, most of the 
      orders are placed by customers who didn't shop at its brick-and-mortar 
                                                              stores before. 
    The run rate for Magnit's online segment currently stands at 2.2 billion 
           rubles based on sales turnover for the last week (December 7-13). 
          In total, Magnit currently runs six online delivery projects, both 
         independently and in cooperation with partners. The Company started 
       developing its food-tech business together with industry specialists, 
  joining forces with Delivery Club in late August 2020, and with Yandex.Eda 
 in late September. Both services provide express delivery within 1 hour. In 
   September, the Company introduced online ordering for its Magnit Pharmacy 
      format; in early November, it launched its own Magnit Delivery app for 
      express deliveries within Moscow; and at the end of the same month, it 
  started a regular delivery service from Magnit Family stores in Krasnodar. 
  In the beginning of December, Magnit and Delivery Club launched deliveries 
  from Magnit Cosmetic stores in Ekaterinburg and Krasnodar. All of Magnit's 
                       e-commerce projects are currently in the pilot stage. 
  Among all these segments, convenience store-based express delivery has the 
                           highest sales and shows the best growth dynamics. 
  As of today, the average ticket for Magnit's own delivery service is 1,500 
 rubles, which is approx. 5 times higher than in the convenience stores (283 
      rubles in Q3 2020). This is mostly due to a larger number of items per 
    basket; in addition to that, the delivery fee also depends on the ticket 
   The Company expects the average ticket in e-commerce to continue growing, 
     bolstered by the roll-out of the Magnit Delivery service, as the latter 
     focuses more on customers looking to stock up on products from Magnit's 
   large formats. At the moment, the service is available only in Krasnodar. 
  Magnit's e-commerce services today encompass over 900 stores in 44 regions 
     and 69 cities, with around 50% of the current revenue from these online 
    projects generated outside Moscow and Saint Petersburg. During 2021, the 
          Company plans to expand online delivery adding not less than 1,500 
convenience, drogerie and large-format stores in more than 50 regions across 
  "We managed to enter the online segment very quickly. We deliberately made 
  our initial bid on partnership projects to minimize the investment, ensure 
  fast roll-out, and get the necessary experience. The Company will continue 
    developing the partnership model but will also pay a lot of attention to 
establishment of our own delivery service across various shopping missions," 
   commented Jan Dunning, President and CEO of Magnit Retail Chain. "Despite 
          all our projects currently running in pilot mode, they are already 
demonstrating good results. We've set very ambitious growth targets for this 
 business: we want to provide our customers with a high-quality offering and 
                   different services, both in offline and online segments." 
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 September 30, 2020, Magnit operated 38 distribution 
   centres and 21,154 stores (14,699 convenience, 469 supermarkets and 5,986 
  drogerie stores) in 3,819 cities and towns throughout 7 federal regions of 
                                                     the Russian Federation. 
 In accordance with the unaudited IFRS 16 management accounts results for 1H 
    2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 
     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] Compared to the previous week 
ISIN:           US55953Q2021 
Category Code:  MSCU 
TIDM:           MGNT 
LEI Code:       2534009KKPTVL99W2Y12 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   89912 
EQS News ID:    1156210 
End of Announcement EQS News Service 

(END) Dow Jones Newswires

December 18, 2020 01:59 ET (06:59 GMT)

Stocks mentioned in the article
ChangeLast1st jan.
LONDON STOCK EXCHANGE PLC -1.46% 7826 Delayed Quote.-13.12%
PUBLIC JOINT STOCK COMPANY MAGNIT 0.39% 5973 End-of-day quote.5.37%
RTS INDEX -0.62% 1743.64 Real-time Quote.25.70%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.19% 72.846 Delayed Quote.-1.60%
YANDEX N.V. -0.78% 80.2 Delayed Quote.15.26%
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