Magnit · RUS:MGNT
Magnit — Q3 2021 Earnings Presentation
62 slides from Magnit's earnings presentation, Oct 28, 2021
Slide 1: Investor Presentation 3Q 2021 Results
Investor Presentation 3Q 2021 RESULTS
Slide 2: Disclaimer
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Disclaimer This presentation ("Company Presentation") comprises certain written materials/ No representation or warranty, express or implied, is given by or on behalf of the Certain st
Slide 3: Magnit at a Glance
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit at a Glance #1 retailer in Russia by number of stores with unrivalled infrastructure platform Key differentiation 25,315 8,723 45 5,144 Total Number Selling Space, Distribution
Slide 4: Geographical Coverage
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Geographical Coverage North North Caucasus Southern Central Volga West Urals Siberian Total 3,840 Cities & Towns Convenience Stores 445 2 415 4 283 4 174 1 812 1 570 958 15 657 7 Magni
Slide 5: Operating Highlights
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Operating Highlights 1 Net retail sales, RUB bln 2 Number of stores, EOP 3 Selling space, th. sq. m Net retail sales YoY growth, % Selling space YoY growth, % 1 510 25 315 1 333 8 723
Slide 6: Financial Performance
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Financial Performance Core Concise Profit & Loss achievements 1H 2019 1H 2020 1H 2021 YoY Sales, bn Rub 657.9 763.4 822.2 +7.7% Gross margin, % 23.6 23.5 23.4 (0.1)pp Improvement of sa
Slide 7: Russian Market Overview
Russian Market Overview Russian Macro Environment • Russian Food Retail Market Potential
Slide 8: Russian Macro Environment
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Macro environment provides further scope for consolidation – supportive for strong players Real GDP substantially 10.5% 7.6% improved in 2Q2021 due Real food
Slide 9: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Food Retail Market Potential Magnit is a leading company on the growing Russian food retail market 1 Russian grocery 2 There is still room 3 Modern retail market 4 Growth is co
Slide 10: Strategy
Strategy Our Strategic Goal • Our Strategy at a Glance • Implementation Plan Key Strategic Guidance 2021-2025 • Key Financial Guidance 2021-2025 Sustainability
Slide 11: Our Strategic Goal
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Our Strategic Goal Cement current leading federal retail positions growing market share significantly & profitably How we get there — at a glance We will keep improving Continuous focu
Slide 12: Our Strategy at a Glance
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Our Strategy at a Glance Consumer first Consumers Most efficient & promising ways to market Consumer centric decision making with enhanced Growing LFL, best in NPS1 Smart expansion in
Slide 13: Key Strategic Guidance 2021-2025
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Key Strategic Guidance 2021-2025 Thought through strategic plan to execute to capture tremendous business improvement Clear CVP initiatives to enhance consumer perception and experienc
Slide 14: Key Financial Guidance 2021-2025
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Key Financial Guidance 2021-2025 Benefits from lucrative EBITDA margin steadily moving to the direction of 8% within 2021-2025 leading to very attractive cash generation Consumers Comf
Slide 15: Dixy Acquisition: Implications for 2021
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Dixy Acquisition: Implications for 2021 Potential Synergies Commerce • Procurement thanks to combined sourcing 2021 Store Opening Guidance • Private label production, direct import, se
Slide 16: Dixy Acquisition: Integration Management Focused on Synergies
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Dixy Acquisition: Integration Management Focused on Synergies Dixy Operates as a Separate Business Organizational Structure Post-acquisition New joint committees Integration management
Slide 17: Dixy Acquisition: Integration Plan & Timeline
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Dixy Acquisition: Integration Plan & Timeline Phase 1: Learning & Quick Wins Phase 2: Capturing Value Phase 3: New Organization Until 01 Jan 2022 Until 01 Jan 2023 After 2H’22-1H’23 Ti
Slide 18: Sustainability Strategic Framework
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Sustainability Strategic Framework #1 Retailer with Purpose in Russia Ambitions 1. 2. 3. 4. 5. Leader Positive impact 100% Best in class Employer #1 in environmental on the quality res
Slide 19: 2025 Sustainability Commitments
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix 2025 Sustainability Commitments Sustainable Health 1 Environment 2 sourcing 3 Employees 4 Communities 5 and wellness 50% 100% 70% 10% Healthy Private labels and own production packagin
Slide 20: Magnit Today
Magnit Today Magnit Umbrella Brand Convenience Store Supermarket • Drogerie Store Format Summary • Other Small Formats and Pilots • Launch of E-commerce • Own Production & Private Label • Logistics System Employees
Slide 21: Magnit Umbrella Brand — Consumer Missions and Formats
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Umbrella Brand — Consumer Missions and Formats Everything that Core offline formats incl. pharmacies in grocery and drogerie stores New promising ventures matters is close to yo
Slide 22: Magnit Convenience Store
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Convenience Store 01 A convenient and affordable store for everyday shopping 3D-tour Size of the Store. sq. m Overview Total size, 486 Routine shopping Food for tonight / now Se
Slide 23: Magnit Convenience Store: Key Operating Statistics
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Convenience Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 5,410 Leased 8.1% 84% leased Increase YoY 16% owned 3-4 years CAPEX th
Slide 24: Magnit Supermarket
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Supermarket 01 Comfortable and affordable store for everyday and major shopping 3D-tour Size of the Store. sq. m Overview Total size, 4,302 Major shopping Special occasion Selli
Slide 25: Magnit Supermarket: Key Operating Statistics
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Supermarket 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 941 Leased 0.1% 46% leased 54% owned Increase YoY 6-7 years Average ticket Nu
Slide 26: Magnit Drogerie Store
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Drogerie Store 01 Within walking distance to buy beauty and health products Magnit Cosmetic is #1 Health and Beauty Specialist retailer in Russia 3D-tour by sales, number of sto
Slide 27: Magnit Drogerie Store: Key Operating Statistics
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Drogerie Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 1,546 11.7% Leased 91% leased 9% owned Increase YoY 2-3 years CAPEX th RUB
Slide 28: Other Small Formats and Pilots
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Other Small Formats and Pilots City Pharmacy Discounters Magnit Go Small store offering ready-to-go / ready-to-eat Pharmaceutical & health care Discounter store offering A kiosk offeri
Slide 29: Dixy Convenience Store
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Dixy Convenience Store A convenient and affordable store for everyday shopping Key operating statistics Selling space, thousand sq. m 725 Size of the Store, sq. m 92% leased Total size
Slide 30: Megamart Superstore
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Megamart Superstore Comfortable and affordable store for everyday and major shopping Key operating statistics Selling space, thousand sq. m 75 Size of the Store, sq. m 33% leased Total
Slide 31: Roll-Out of E-commerce Across All Missions
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Roll-Out of E-commerce Across All Missions Missions Magnit Own Partners Delivery Express Express (~60 mins) Casual small purchase Regular Stock-up (2 hours+) Big ticket purchase E-Phar
Slide 32: Online Delivery Already Has Good Traction
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Online Delivery Already Has Good Traction ~33,000 15 avg. # of orders per day dark stores launched >1,200 267 avg. ticket for own delivery1 cities in 64 regions served ~44,000 SKUs >66
Slide 33: Private Label, Own Production & Direct Import as Differentiation Pillars
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Private Label, Own Production & Direct Import as Differentiation Pillars Private Label Own production Direct import Improve own brand portfolio to support to provide exclusive goods wi
Slide 34: Own Production — from Field / Site to Shelf
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Own Production — from Field / Site to Shelf 34
Slide 35: Suppliers
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Suppliers Suppliers Direct Import 1,400 Federal Suppliers 7% International Direct Import (Annual Average) 54% 690 Open 5,700 Assortment Contracts Domestic Suppliers 46% Private Label 4
Slide 36: Logistics System
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Logistics System North North Central Volga Southern Urals West Siberian Caucasus Total Centralization Ratio 3Q 2021 91% Distribution Delivered from DC Centers 14 10 8 5 4 3 1 45 9% 652
Slide 37: Employees
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Employees 346,557 Headcount of Employees 38,131 Distribution 279,958 9,354 Regional In-store branches 14,664 Head Office 4,450 Other Dixy Mega- Super- Drogerie Convenience formats mart
Slide 38: Operating and Financial Results
Operating and Financial Results Quarterly Operating Highlights • Summary Profit & Loss Revenue & Costs • Gross Margin & EBITDA • Balance Sheet Debt Portfolio • Working Capital • CAPEX Analysis • Free Cash Flow
Slide 39: Quarterly Operating Highlights
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Quarterly Operating Highlights Return to parent slide 1 Net retail sales, RUB bln 2 Number of visits, mln 3 Selling space, th. sq. m 4 LTM - sales density*, th. RUB/sq.m/year Net retai
Slide 40: Summary Profit & Loss
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Summary Profit & Loss RUB mln IAS 17 IFRS 16 1H 2020 1H 2021 YoY growth 1H 2020 1H 2021 YoY Growth Net sales 763,361 822,230 7.7% 763,361 822,230 7.7% Cost of sales -583,840 -629,660 7
Slide 41: Revenue & Costs
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Revenue & Costs Revenue SG&A Expense Structure Dynamics % % YoY growth, % RUB bln of sales of SG&A RUB bln 822,2 Total 168,0 20,4% 100,0% 763,4 7.7% Staff costs 75,4 9,2% 44,9% Rent 35
Slide 42: Gross Margin & EBITDA
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Gross Margin & EBITDA IAS 17 IFRS 16 Gross -10 b.p. Margin Bridge, 23,6% 23,5% -0,0% 23,4% 23,4% As % -0,1% of revenue Transport YoY decrease Trading margin -9 b.p. 1H 2019 1H 2020 1H
Slide 43: Balance Sheet
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Balance Sheet RUB mln ASSETS 2020 1H 2021 EQUITY AND LIABILITIES 2020 1H 2021 Property plant and equipment 336,125 333,038 Equity 182,889 181,798 Right-of-use assets 308,445 312,774 Lo
Slide 44: Debt Portfolio
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Debt Portfolio Low Currency Risk Debt Level Dynamics, Debt portfolio maturity* No loans denominated in foreign currency RUB bln RUB bln Short-term debt 265.5 265.5 Long-term debt 1.8 B
Slide 45: Working Capital
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Working Capital 1 2 Target for 2020–2025 Initiatives to improve stock days Improvement Cross-functional collaboration of working capital of supply chain, operations • Optimize package
Slide 46: Working Capital
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Working Capital 3 4 Initiatives to improve payment Structural influencing factors days and overdue receivables • New SQM addition — new stores have lower sales density during ramp up s
Slide 47: CAPEX Analysis
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix CAPEX Analysis 1H 2021 1H 2020 RUB mln RUB mln Total 25,563 12,289 Machinery and equipment Construction in progress and buildings Other assets Please note: there may be small variation
Slide 48: Free Cash Flow
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Free Cash Flow 1H 2020, Working Capital RUB mln Analysis 53,993 (28,777) (6,512) (4,269) 14,434 (12,289) (14,453) 23,579 12 248 38 Average Days 976 Adjusted Change Net Taxes OCF 3 122
Slide 49: Corporate Governance
Corporate Governance Corporate Governance Overview • Best in Class Retail Management Team • Guidance For FY 2021
Slide 50: Corporate Governance Overview
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Corporate Governance Overview Board Committees Overview Status Independent Non-Executive Director Non-Executive Director Charles Naira Tim Jan Walter Alexey Vsevolod James Alexander Pi
Slide 51: Best in Class Retail Management Team
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Best in Class Retail Management Team Highly experienced retail leadership team — long on local Russian expertise Jan Dunning Anna Bobrova Andrey Bodrov Ruslan Ismailov Pavel Lokshin An
Slide 52: Guidance for FY 2021
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Guidance for FY 2021 Number of Store Openings (all formats, gross) ~2,000 Refurbished Stores (all formats) ~700 CAPEX RUB 60–65 bn 52
Slide 53: Appendix
Appendix Russian Macro Environment • Russian Food Retail Market Potential • Top-10 Russian Food Retailers • Convenience Store • Supermarket Drogerie store • Quarterly Operating Data Summary
Slide 54: Russian Macro Environment
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Return to parent slide Real GDP substantially improved in 2Q2021 due Inflation remains supportive for retailers. Real disposable incomes recovered on people g
Slide 55: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Food Retail Market Potential Return to parent slide 1 Grocery retail market, 2 Modern VS Traditional 3 Market Share, % 4 Share of TOP-5 retail chains, % USD bn Retail 100% Chin
Slide 56: Top-10 Russian Food Retailers
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Top-10 Russian Food Retailers Return to parent slide X5 12,8% Magnit 10,9% DKBR* 6,6% 39.5% Lenta 2,7% 34.5% Share of TOP-10 Auchan 1,5% Svetofor 1,3% Share of TOP-5 Russian food retai
Slide 57: Magnit Convenience Store
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Convenience Store Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2019 2020 2021 YoY growth, % YoY
Slide 58: Magnit Supermarket
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Supermarket Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2019 2020 2021 YoY growth, % YoY growt
Slide 59: Magnit Drogerie Store
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Drogerie Store Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2019 2020 2021 1 2 3 4 1 2 3 4 1 2
Slide 60: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Quarterly Operating Data Summary 3Q 2019 4Q 2019 FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 RUB bln SALES TOTAL 342.6 368.2 1,368.7 376.0 387.3 383.2 407.2
Slide 61: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Quarterly Operating Data Summary 3Q 2019 4Q 2019 FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 LFL sales growth -0.7% 0.1% 0.4% 7.8% 7.2% 6.9% 7.5% 7.4% 4.1%
Slide 62: Contact Information
Russian Market Overview Strategy Magnit Today 3Q 2021 Operating and Financial Results Corporate Governance Appendix Contact Information Magnit Investor Relations Team magnitIR@magnit.ru magnit.com/en twitter.com/magnitIR 15/2 Solnechnaya Street, Krasnodar, 350072, Russian Federation