The most successful Russian entrepreneur of 2013

It rarely happens that Sergei Galitsky , the billionaire founder of Russia's largest retail chain Magnit, makes a mistake. “I think we will never be able to repeat such results again,” he said in an interview with Forbes in the spring of 2013, commenting on the financial results of the past year. 9 months later we can say that he was wrong.

Contenders for the title “Businessman of the Year”

Rustam Tariko

In June 2013, after the purchase of the Polish company CEDC, the owner of the Russian Standard Corporation became the second largest vodka producer in the world.

Andrey Romanenko

In May 2013, QIWI listed shares on the NASDAQ exchange, and since then its capitalization has more than doubled. The network of 169,000 kiosks and terminals handling 12 million transactions per day is the largest in the world.

In less than a year, Magnit shares , which had previously not been deprived of investor attention, have risen in price by almost one and a half times. The company's turnover grew by 28%, to $13.2 billion, with EBITDA amounting to 10.6% of revenue and net profit - 5.7% (for the three quarters of 2012 - 10.3% and 5.3%, respectively). In all these indicators, Magnit has overtaken X5 Retail Group, its closest competitor, which it had previously only surpassed in terms of retail space.

Galitsky's fortune now exceeds $12 billion.

He has come very close to the top ten of the Russian Forbes list and is the only one on this Olympus who has become rich not from financial transactions, oil, metals and other commodities, but from consumer demand. He built his business brick by brick, like Sam Walton, founder of Walmart, or Ingvar Kamprad, creator of IKEA.

A true entrepreneur has instinct. In 1994, Sergei Galitsky gave up his career as a financier (he was deputy manager of Krasnodar Lenexbank) and began selling cosmetic products. A year later, Lenexbank went bankrupt, and the Transasia company founded by Galitsky became the exclusive distributor of Procter & Gamble in the Krasnodar Territory. Two years later, he parted ways with his partners, deciding that the future lay in retail. Transasia remained a distributor (albeit one of the largest in the south of Russia), and Magnit gradually turned into the most visited retail chain in the country.

When retailers were fighting for cities with a population of over a million, Galitsky was exploring the Russian provinces, opening Magnets in villages and urban-type settlements. Competitors invested in super- and hypermarkets, but Galitsky stubbornly stuck to one format - a convenience store. He saved on everything. “It is impossible not to admit that today the network is the market leader in terms of the number of objects. But the internal content of the retail outlets leaves much to be desired,” a top manager of the Russian office of a transnational corporation wrote about Magnit in his report in 2003.

Galitsky preferred organic growth to mergers and acquisitions, borrowing only as needed. By 2006, Galitsky’s network had grown to 1,500 stores, Magnit held an IPO, raised almost $370 million, and only then began building hypermarkets. As of mid-2013, Magnit's total debt was 21% of revenue, while X5 Retail Group's was 45% of revenue. But the secret of Magnit is not saving. According to its owner, the one who constantly looks for “points of growth” wins. “No one has repealed the laws of dialectics,” recalls Galitsky. — Quantity turns into quality. He who works harder achieves more.” Lev Khasis, who headed the X5 Retail Group until 2011, spoke about Galitsky with respect and sympathy (as his former employees recall). Although Magnit’s achievements often became a headache for Khasis.

Once the editor of Forbes heard the opinion of one Ural entrepreneur: Galitsky is so successful because he enjoys the patronage of the Kremlin. Galitsky admits that “there were attempts” to include him “in the political process.” But in relations with the state he tries to keep his distance. He rarely participates in meetings of the Russian Union of Industrialists and Entrepreneurs, speaks about President Putin without reverence, and criticizes the work of the State Duma.

Open any of Magnit’s latest quarterly reports signed by Galitsky, and in the section “Basic information on the financial and economic condition of the issuer” you will read: “The future success of [the Magnit group of companies] will largely depend on continued cooperation with management group" (the names of top managers - minority shareholders of the company are listed below).

Galitsky never let go of the reins of power - you need to feel business with your fingertips.

But he doesn’t believe that everything in a company depends on the CEO: “In business, people work against people. Specific minds collide with specific minds. If the five strongest people leave my team, things won’t work as well.”

So far none of them have left. Magnit has never had any failures. Investors still believe in the company. And Sergei Galitsky assures that he recognizes only those businesses where the game is on the edge - either hit or miss.

Businessman of the Year: Sergey Galitsky