Page 151 - RusRPTNov21

lifted, shops re-opened and higher shopping mall traffic. The growth was 28% y/y vs. 3Q19.
In 9mo21, the top line grew 15% y/y, which we consider to be a decent result. We forecast revenues to rise 14% y/y in 2021F and consider the YTD results as providing additional comfort. We note that M.video’s prime strategic objective is to double GMV by 2025, which would require a similar 15% CAGR over the period.
Online sales outperformed, rising 17% y/y and accounting for 67% of the total. The share is notably different for M.video (89%) and Eldorado (25%), and the latter is a prime driver for the digital transformation and strategy objective to reach an 85% online contribution.
The number of OneRetail clients surged 31% y/y in the third quarter of 2021 and accounted for 59% of identified active customers. The platform envisages deeper integration between clients, sales force devices and algorithms, and tickets were 28% more than those of non-OneRetail clients (RUB 11.7k and RUB 9.1k, respectively).
Selling space gained 5.6% y/y as of September, while 9mo21 net openings reached 94 outlets and accounted for 61% of our annual forecast (which we leave as our base case).
M.video's shares have lost 10% YTD. We consider the operating stance as robust and the revenue growth profile as among the most appealing. We see the stock pressure as not fully reflecting the company’s fundamentals and note the appealing 2022F EV/EBITDA of 4x and 12-month dividend yield of 14%.
Magnit has released strong 3Q21 IFRS numbers, which featured 28% y/y revenue growth on Dixy consolidation and no decline in the EBITDA margin (7.2%) amid dilution by the target (7-10bp).
On a standalone basis, which we see as a more appropriate measure for comparison, the growth accelerated only to 13% y/y from 10% in 2Q21, driven by LFL improvement (8.6% y/y vs. 5.3% y/y). The Dixy deal caused net debt expansion of RUB112bn YTD, while net debt/EBITDA went up from 1.1x to 1.9x over the period. We incorporate Dixy into our model and now anticipate revenues to go up 19% y/y and 16% y/y in FY21F and 2022F, respectively. We have left our EBITDA margin at 7.0%, while acknowledging upside risks from a rapid and efficient integration and the company’s overall guidance for an 8% margin in the medium term. Our key P&L lines are up a blended 25%, reflecting that Dixy’s scale while gap to X5 on revenues declines to 9% in 2022F from 27% in 2020. These lifted forecasts and the valuation date roll offset 100bp higher WACC (13%) and lead to us raising our 12-mo TPs 27-29% to $24.50 and RUB8,000 (ETRs of 37%
151 RUSSIA Country Report November 2021 www.intellinews.com