Slide 1: Investor Presentation 9M 2018 Results
INVESTOR PRESENTATION 9M 2018 RESULTS published on October 22, 2018
Slide 2: Magnit at a Glance
Magnit at a Glance Magnit at a Glance As of September 30, 2018 2 866 17 442 Total Number 6 092 5 934 37 Cities & Towns Selling Space Trucks DCs of Stores (thous.sq.m.) As of September 30, 2018 №1 $7bn 9 % Retailer in Russia Market Share in Russian Measured by Number Capitalization Grocery Sector of
Slide 3: Magnit vs Peers
Magnit at a Glance Magnit vs Peers Selling Space Number Revenue Market Cap Market Share thous. sq.m., of Stores, eop 2017 RUB bn, eop 2017 US$ bn, eop 2017 %, eop 2017 eop 2017 Magnit 16 350 5 755 1 143 13,9 9 12 121 5 480 1 295 10,3 10 X5 Dixy 2 703 927 283 0,7 2 Lenta 328 1 382 365 2,8 3 Auchan 31
Slide 4: Geographical Coverage
Operational Overview Geographical Coverage 2 866 Cities & Towns 7 Federal Regions North Southern Central Volga North Urals Siberia Caucasus West 378 664 Convenience Stores 1 913 3 707 3 586 1 298 1 267 12 813 Supermarkets 19 123 82 123 33 53 24 457 183 Drogerie Stores 159 821 1 059 1 146 330 474 4 1
Slide 5: Logistics System
Operational Overview Logistics System 37 1 640 17 442 5 934 Trucks DCs thous.sq.m. Total Number Warehousing Space of Stores 4 998 Centralization Ratio Central 9 477 % Volga 10 470 5 379 9M2018 Future Targets Delivered from DC Southern 8 308 2 848 89 90 Delivered from supplier Urals 3 141 1 695 11 10
Slide 6: Suppliers
Operational Overview Suppliers 5 900 Domestic Suppliers 1 200 Federal Suppliers 4 700 Local Suppliers 55% 45% Assortment Source: Company, as of September 30, 2018 6
Slide 7: Direct Import Private Label
Operational Overview Direct Import 7 % 744 International Open Direct Import Contracts (Annual Average) Private Label 720 8 % 76% PL Share Food SKUs M of Revenue Items Source: Company, Direct Import – as of December 31, 2017; Private Label – as of September 30, 2018 7
Slide 8: Employees
Operational Overview Employees 287 842 Employees 211 293 36 522 24 888 Regional 11 963 3 176 Head Office Other In-store Distribution Branches 1000 employees P 34 485 = Average Monthly Salary* Source: Company, as of September 30, 2018 *as of June 30, 2018 8
Slide 9: Convenience Store
Operational Overview Convenience Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 474 P 244 sq.m. Total = 328 Selling Space sq.m. $4 3 years Traffic If Owned tickets/sq.m./day Sales Mix 2,5 4-6 years 88% Food Cost of New Store Sales Densi
Slide 10: Supermarket
Operational Overview Supermarket Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 4 360 P 513 sq.m. Total = 6-9 years 2 038 Selling Space sq.m. $8 Traffic Cost of New Store tickets/sq.m./day per sq.m. of Total Space, thousand RUB Sales Mix 1,2 40 81% Foo
Slide 11: Drogerie Store
Operational Overview Drogerie Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 288 P 315 sq.m. Total = 229 Selling Space sq.m. $5 3 years Traffic If Owned tickets/sq.m./day Sales Mix 0,8 4-6 years 100% Non-food Sales Density Time to Matur
Slide 12: Summary P&L
Financial Overview Summary P&L RUB MN 1H 2017 1H 2018 Y-o-Y Growth Net sales 555,025 595,263 7.2% Cost of sales (406,459) (448,090) 10.2% Gross profit 148,565 147,172 (0.9%) Gross margin, % 26.8% 24.7% SG&A (102,662) (105,386) 2.7% Other income, net 2,784 2,239 (19.6%) EBITDA 48,790 44,163 (9.5%) EB
Slide 13: Revenue & Costs
Financial Overview Revenue & Costs Revenue Dynamics Net Income Dynamics RUB bn Sales Growth, RUB Sales Growth, RUB RUB bn +6,4% +7,2% -20,5% -14,4% 26 21 555 595 18 522 LFL LFL -3,1% -4,5% 1H 2016 1H 2017 1H 2018 1H 2016 1H 2017 1H 2018 SG&A Expense Structure 1H 2018 Margin Dynamics Revenue — 595 RU
Slide 14: Gross Margin Bridge, EBITDA Margin Bridge
Financial Overview Gross Margin Bridge % of Sales 33 -47 b.p. -204 b.p. 31 29 27,2 26,8 -0,3 -0,2 -1,8 27 24,7 -0,2 25 23 21 19 17 15 GM 1H2016 Trading Margin Transport GM 1H2017 Trading Margin Transport GM 1H2018 EBITDA Margin Bridge % of Sales -110 b.p. -137 b.p. 12 9,9 8,8 -0,5 0,3 -0,6 -0,3 10 -
Slide 15: Free Cash Flow
Financial Overview Free Cash Flow RUB mn 1H 2017 Working Capital Analysis 49 153 Average Days Payable to Suppliers is -21 991 36 Days. -6 627 -3 479 -26 549 17 056 -771 -10 264 -17 992 17 304 -10 952 Inventory Management Days is 67 Days Adjusted Change in Net Interest Taxes OCF Capex Other Cash FCF
Slide 16: Balance Sheet
Financial Overview Balance Sheet RUB MN 2016 2017 1H 2018 ASSETS Property plant and equipment 289,945 329,827 332,781 Other non-current assets 6,081 6,959 6,453 Cash and cash equivalents 16,559 18,337 10,534 Inventories 134,916 162,205 173,229 Trade and other receivables 844 1,399 2,204 Advances pai
Slide 17: Capex Figures
Financial Overview Capex Figures Buildings: Complete & under Machinery & Equipment Other Assets Land Construction FY 20171 44 443 20 355 7 928 865 RUB 74 bn RUB 500 mn 1CAPEX for 1H2018 amounts to RUB 21 bn Source: Company’s calculations based on IFRS accounts for 2017 17
Slide 18: Debt Burden
Financial Overview Debt Burden Debt Level Dynamics Credit Metrics Credit Profile RUB mn Net Debt Short-term Debt Long-term Debt % EBITDA / Finance Expenses The Company has 127 606 126 460 14,0 an Impeccable Credit History 115 596 111 047 108 123 12,0 Collaboration with 105 063 67 013 10,1 10,0 the L