Page 131 - RusRPTJan21

Next year, we factor in a comparable number of openings for X5 and a pickup to 1,700 stores for Magnit (including 700 drogeries) as operational conditions stabilize and liquidity positions are enhanced.
We consider the market to be still offering consolidation prospects. For 2020F, we model X5 and Magnit market shares at 13.6% and 10.3%, respectively, which still suggest potential for future expansion. The share of modern trade is to be 79% in 2020F, which we believe means that network growth of the modern channel is limited and organic expansion of the industry leaders will likely happen largely at the expense of less efficient chains. Recently, approximately half of the rollout of the federal names came on the premises of exited unconsolidated competition, and we anticipate the trend continuing.
Beer production gained 2.7% y/y in 11m20 to 731mn decalitres, while in November​, ​according to the Russian Statistics Service​. production was up 4.4% y/y. These are decent numbers, given the tight regulations and 5% inflation in excise this year. The Russian beer market is consolidated, with the top three players holding some 70% and Anadolu Efes occupying the leading position (some 30%). In 9mo20, Russia accounted for more than 60% of Anadolu Efes’ beer volumes, with the company outperforming the market on a low double-digit rise. This allowed it to gain an additional 2.2pp of market share y/y, as of 9m20. In the company's domestic market (Turkey), volumes remained muted, losing 4% y/y in 9mo20, as consumer sentiment was pressured, some ontrade restrictions on distribution and marketing remained, and tourism was down. The company’s stock has declined 3% YTD in lira terms vs. the 21% bounce in the BIST100 index, as the impressive performance abroad is offset by soft sentiment, the accelerated stock supply this year, and the exclusion from the MSCI EM EMEA index. We see the company’s stock performance as being in contrast with the latest impressive operations, thus creating a decent base for a rerating.
131 ​RUSSIA Country Report​ January 2021 www.intellinews.com