Magnit · RUS:MGNT
Magnit — Q4 2020 Earnings Presentation
51 slides from Magnit's earnings presentation, February 2021
Slide 1: Investor Presentation 4Q 2020 Results
Investor Presentation 4Q 2020 RESULTS
Slide 2: Disclaimer
Russian Market Overview Magnit Today 4Q 2020 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 statements
Slide 3: Russian Market Overview
Russian Market Overview Russian Macro Environment • Russian Food Retail Market Potential
Slide 4: Russian Macro Environment
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Macro environment provides further scope for consolidation – supportive for strong players 1 Real GDP improved in 3Q 2020 followed by Global economy recovery and halt
Slide 5: Russian Food Retail Market Potential
Russian Market Overview Magnit Today 4Q 2020 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 coming reta
Slide 6: Magnit Today
Magnit Today Magnit at a Glance • Geographical Coverage • Format Summary Convenience Store Supermarket • Drogerie Store Other Small Formats and Pilots Digital Transformation • Logistics System • Own Production & Private Label • Target Organizational Structure • Employees
Slide 7: Magnit at a Glance
Russian Market Overview Magnit Today 4Q 2020 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 21,564 7,497 38 4,355 Total Number Selling Space, Distribution Trucks po
Slide 8: Geographical Coverage
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Geographical Coverage North North 3,752 Caucasus Southern Central Volga West Urals Siberian Total Cities & Towns Convenience 14 911 7 421 2 243 4 182 3 996 1 703 1 465 901 Stores Federal Region
Slide 9: Format Summary
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Format Summary Size of the Store Average ticket Sales density*, Sales LFL Ownership sq.m (excl. VAT), th RUB/ mix 4Q 2020* structure RUB sq.m/year Food Sales (selling space) selling space total
Slide 10: Convenience Store
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Convenience Store 01 A convenient and affordable store for everyday shopping Size of the Store. sq. m Overview Total size, 486 Routine shopping Food for tonight / now Selling space, 341 Minor s
Slide 11: Convenience Store: Key Operating Statistics
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Convenience Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 5,090 Leased 2.8% 83% leased Increase YoY 17% owned 3-4 years CAPEX th RUB Average tick
Slide 12: Supermarket
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Supermarket 01 Comfortable and affordable store for everyday and major shopping Size of the Store. sq. m Overview Total size, 4,276 Major shopping Special occasion Selling space, 2,003 Routine
Slide 13: Supermarket: Key Operating Statistics
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Supermarket 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 941 Leased -0.8% 36% leased 64% owned Increase YoY 6-7 years Average ticket Number of tickets
Slide 14: Drogerie Store
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Drogerie Store 01 Within walking distance to buy beauty and health products Size of the Store, sq. m Overview Total size, 290 Regular shopping for personal care and household Selling space, 231
Slide 15: Drogerie Store: Key Operating Statistics
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Drogerie Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 1,428 9.7% Leased 90% leased 10% owned Increase YoY 2-3 years CAPEX th RUB sq. m of sellin
Slide 16: Other Small Formats and Pilots
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Other Small Formats and Pilots 01 City Pharmacy Discounters Small store offering ready-to-go / ready-to-eat Pharmaceutical & health care Discounter store offering products as well as basic groc
Slide 17: Innovations and technologies are in Magnit DNA
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Innovations and technologies are in Magnit DNA… Automatic ordering Situation center Video analytics of queue Geoanalytiсs for target system of goods to and on-shelf availability store locations
Slide 18: Digital transformation
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Digital transformation 27 initiatives in 4 directions Enhance IT Support business with data Build strong digital Speed up the process of and technologies brand change management Change processe
Slide 19: Digital transformation is beneficial
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Digital transformation is beneficial Everyone will benefit from digital transformation Improved New opportunities for New operations Higher IRR customer successful business processes and experi
Slide 20: Logistics System
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Logistics System North North Central Volga Southern Urals West Siberian Caucasus Total Centralization Ratio 4Q 2020 91% Distribution Delivered from DC Centers 10 10 8 3 3 3 1 38 9% 512 Direct s
Slide 21: Private Label
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Private Label Well-developed Unique value offer infrastructure ~2,500 Private Label will help us We have what it takes to launch to differentiate from competition more Private Labels with great
Slide 22: Private Label
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Private Label We develop our private labels to meet customer needs in all price ranges our stores 3 - Best 2 - Better 1 - Good 22
Slide 23: Own Production
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Own Production We develop own production facilities to increase the share and variety of private label products in our stores Agricultural enterprise Food production Cucumbers, Potatoes, bulb M
Slide 24: Employees
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Employees 316,001 Headcount of Employees 33,751 254,195 Distribution 11,056 Regional In-store branches 12,189 Head Office 4,810 Other Super- Drogerie Convenience formats markets Stores Stores P
Slide 25: Sustainability Strategic Framework
Russian Market Overview Magnit Today 4Q 2020 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% responsible Best in class Employer #1 in environmental on the quality
Slide 26: 2025 Sustainability Commitments
Russian Market Overview Magnit Today 4Q 2020 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 packaging be recy
Slide 27: Operating and Financial Results
Operating and Financial Results Operating Highlights • Summary Profit & Loss Revenue & Costs • Gross Margin & EBITDA Free Cash Flow Balance Sheet CAPEX Analysis • Leverage Policy
Slide 28: Operating Highlights
Russian Market Overview Magnit Today 4Q 2020 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 1 333 20 725 21 564 1 217 1
Slide 29: Summary Profit & Loss
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Summary Profit & Loss RUB mln IAS 17 IFRS 16 1H 2019 1H 2020 YoY growth 1H 2019 1H 2020 YoY Growth Net sales 657,917 763,361 16.0% 657,917 763,361 16.0% Cost of sales -502,594 -583,840 16.2% -5
Slide 30: Revenue & Costs
Russian Market Overview Magnit Today 4Q 2020 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 763,4 Total 156,3 20,5% 100,0% 657,9 16.0% Payroll and related taxes 69,1 9,1% 44,2% R
Slide 31: Gross Margin & EBITDA
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Gross Margin & EBITDA IAS 17 IFRS 16 Gross -9 b.p. Margin Bridge, 24,7% 23,6% -0,2% 0,1% 23,5% As % 23,5% of revenue Trading Transport YoY growth margin 5.7% 1H 2018 1H 2019 1H 2020 1H 2020 11,
Slide 32: Balance Sheet
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Balance Sheet RUB mln ASSETS 2018 2019 1H 2020 EQUITY AND LIABILITIES 2018 2019 1H 2020 Property plant and equipment 344,837 352,986 341,190 Equity 212,442 188,533 187,302 Right-of-use assets 2
Slide 33: Debt Portfolio
Russian Market Overview Magnit Today 4Q 2020 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 Long-term debt 208,6 208,6 Bonds Low Inte
Slide 34: Working Capital
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Working Capital 1 Projects to improve stock days Cross-functional collaboration of supply • Optimize package size • Assortment harmonization chain, operations and commercial • Launch of pick-by
Slide 35: Working Capital
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Working Capital 2 3 Projects to improve payment Structural influencing days and overdue receivables factors • New SQM addition — new stores have lower sales density during ramp up stage • Optim
Slide 36: CAPEX Analysis
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix CAPEX Analysis 1H 2020 1H 2019 RUB mln RUB mln Total 12,289 22,314 Machinery and equipment 6 095 (49,6%) 11 271 (50,5%) Construction in progress and buildings 4 034 (32,8%) 9 115 (40,8%) Other
Slide 37: Free Cash Flow
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Free Cash Flow 1H 2019, Working Capital RUB mln Analysis 38 45 061 (22 386) (6 689) (1 700) 14 285 (22 314) (7 786) (9 836) Average Days Adjusted Change Net Taxes OCF 243 (29 919) 27 869 Payabl
Slide 38: Corporate Governance
Corporate Governance Corporate Governance Overview • Best in Class Retail Management Team • Guidance For FY 2021
Slide 39: Corporate Governance Overview
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Corporate Governance Overview Board Committees Overview Status Independent Non-Executive CEO Non-Executive Director Director Charles Pat James Timothy Jan Walter Evgeniy Alexey Gregor Alexander
Slide 40: Best in Class Retail Management Team
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Best in Class Retail Management Team Highly experienced retail leadership team — long on local Russian expertise Jan Anna Andrey Maria Ruslan Dmitry Florian Maxim Elena Anna Dunning Bobrova Bod
Slide 41: Guidance for FY 2021
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Guidance for FY 2021 Number of Store Openings (all ~2,000 formats, gross) Refurbished Stores (all ~700 formats) CAPEX RUB 60–65 bn 41
Slide 42: Appendix
Appendix Russian Macro Environment • Russian Food Retail Market Potential • Top-10 Russian Food Retailers • Convenience Store • Supermarket Drogerie store • Operating Highlights Quarterly Quarterly Operating Data Summary
Slide 43: Russian Macro Environment
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Return to parent slide Real GDP in 3Q 2020 improved to -3.4% YoY Inflation remains supportive for retailers Real disposable incomes substantially recovered 1 followed
Slide 44: Russian Food Retail Market Potential
Russian Market Overview Magnit Today 4Q 2020 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% USA 1 193,4 M
Slide 45: Top-10 Russian Food Retailers
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Top-10 Russian Food Retailers Return to parent slide X5 11,5% Magnit 9,6% DKBR 5,7% 34.9% Lenta 2,5% 30.8% Share of TOP-10 Auchan 1,5% Metro 1,1% Share of TOP-5 Russian food retailers Okey 1,0%
Slide 46: Convenience Store
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Convenience Store Return to parent slide Net retail sales Selling space Sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2018 2019 2020 YoY growth, % YoY growth, % Q 1 2 3 4 1
Slide 47: Supermarket
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Supermarket Return to parent slide Net retail sales Selling space Sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2018 2019 2020 YoY growth, % YoY growth, % Q 1 2 3 4 1 2 3 4
Slide 48: Drogerie Store
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Drogerie Store Return to parent slide Net retail sales Selling space Sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2018 2019 2020 1 2 3 4 1 2 3 4 1 2 3 4 YoY growth, % YoY
Slide 49: Quarterly Operating Highlights
Russian Market Overview Magnit Today 4Q 2020 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 Sales density*, th. RUB/sq.m/year Net retail sales YoY gro
Slide 50: Quarterly Operating Data Summary
Russian Market Overview Magnit Today 4Q 2020 Operating and Financial Results Corporate Governance Appendix Quarterly Operating Data Summary RUB bln 1Q 2018 2Q 2018 3Q 2018 4Q 2018 FY 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 SALES TOTAL 288.6 306.7 310.1 33
Slide 51: Contact Information
Contact Information Magnit Investor Relations Team magnitIR@magnit.ru https://www.magnit.com/en/ https://twitter.com/MagnitIR 15/2 Solnechnaya Street Krasnodar, 350072 Russian Federation 51