Fix Price PJSC · RUS:FIXR
Fix Price PJSC — Fix Price — Investor Presentation (October 2022)
58 slides from Fix Price PJSC's investor presentation, October 2022
Slide 1: Undisputed Leader in Russian Value Retail
UNDISPUTED LEADER IN RUSSIAN VALUE RETAIL October 2022
Slide 2: Disclaimer
DISCLAIMER IMPORTANT: This document does not constitute or form part of, and should not be because they relate to events and depend on circumstances that may or may not occur the results of the Company's operations presented under IAS 17 after 1 January 2019 construed as an offer for sale or subscri
Slide 3: Undisputed Leader in Russian Value Retail
Undisputed Leader in Russian Value Retail 3
Slide 4: Undisputed Leader in Russian Value Retail
UNDISPUTED LEADER IN RUSSIAN VALUE RETAIL OUR PROPOSITION OUR NUMBERS OUR AMBITION 5,400+ $3.1bn stores 2021 Revenue c.18,600 Total store potential in Consistently low prices Treasure hunt & essentials c.90% $599m Russia, Belarus and Kazakhstan (5) Market share in variety 2021 EBITDA value retail ma
Slide 5: Fix Price – Purpose-Built from Inception to Disrupt the Retail Market at Scale
FIX PRICE – PURPOSE-BUILT FROM INCEPTION TO DISRUPT THE RETAIL MARKET AT SCALE (2007 – 2010) (2011 – 2014) (2015 – 2016) (2017 – 2020) (2021, 2022 and beyond) Phase I Phase II Phase III Phase IV Phase V Format development Network expansion Multi-price point evolution High quality growth Cementing le
Slide 6: Key Pillars of Fix Price Success
KEY PILLARS OF FIX PRICE SUCCESS 1 Leader in a large and growing market 2 Unique customer value proposition 3 Operational excellence 4 Substantial growth potential 5 Best-in-class financial KPIs 6 Strong management and corporate governance Undisputed Leader in Russian Value Retail
Slide 7: Leader in Large and Growing Market
LEADER IN LARGE AND GROWING MARKET 1
Slide 8: Value Retail Is Proven Globally
VALUE RETAIL IS PROVEN GLOBALLY FIX PRICE IS AMONGST THE GLOBAL SECTOR LEADERS(1) Revenue 2021 in USDbn(2) US USDbn(2) USDbn(2) Revenue 3.5 Revenue 6.5 Revenue 3.1(3) # stores 1,397 # stores 1,110 # stores 4,904 ~250m(5) ~145m(5) ~135m(5) USDbn(2) USDbn(2) USDbn(2) USDbn(2) Revenue 34.3 Revenue 2.9
Slide 9: We Are Disrupting Large and Growing TAM
WE ARE DISRUPTING LARGE AND GROWING TAM(1) SIGNIFICANT POTENTIAL IN THE GROWING ADDRESSABLE MARKET(1) FIX PRICE IS DRIVING ADDRESSABLE MARKET IN RUSSIA RUB(2) 39.3tr 2021 Russian Total Retail Market 80 c.8.5x presence in Russian bigger vs. the regions second and only other player(6) 2021 Russian Tot
Slide 10: TAM and VVR Channel Are Gaining Shares in Retail Market
TAM AND VVR CHANNEL ARE GAINING SHARES IN RETAIL MARKET SUSTAINABLE GROWTH OF THE TAM(1) AND VVR(2) CHANNEL, RUB BN FILTERING ONLY RELEVANT PRODUCTS ACROSS CATEGORIES CAGR ‘18-’21 +12% +25% As % of addressable As % of total market category TAM VVR 2,918 Food and Drinks 45% 7% 2,339 Homewares, Home F
Slide 11: Fix Price = Variety Value Retail in Russia
FIX PRICE = VARIETY VALUE RETAIL IN RUSSIA FAVOURABLE CONDITIONS FOR VARIETY VALUE RETAIL STRONG INCUMBENT POSITION Number of stores, end of Market share(5) Year of Population in Russia and other core period 218m+ countries of operation(1) Company market entry / Exit 2017 2021 2019 2021 Population i
Slide 12: Unique Customer Value Proposition
UNIQUE CUSTOMER VALUE PROPOSITION 2
Slide 13: Deep Value Across a Diverse Product Offering
DEEP VALUE ACROSS A DIVERSE PRODUCT OFFERING UNCOMPROMISING EDLPs(1)… …CONSTANTLY CHANGING ASSORTMENT… $1.3 / ₽99 $2.0 / ₽149 $1.1 / ₽79 $2.7 / ₽199 Several New Price Point (Nov 2021) 64% of assortment is rotated anchor price $0.8 / ₽59 $3.4 / ₽249(3) points(2) New Price Point (Nov 2021) New Price P
Slide 14: Driving Constant Newness in Assortment
DRIVING CONSTANT NEWNESS IN ASSORTMENT WHAT? HOW? 40-60 PRODUCTS LAUNCHED EVERY WEEK 8 SEASONAL DEDICATED TRACKING OF GLOBAL TRENDS DRIVING TREASURE HUNT EXPERIENCE COLLECTIONS Week 1 Week 2 Week 3 Week 4 CONTINUOUS LEVERAGING LONG-STANDING Accessories BROWSING PARTNERSHIPS WITH SUPPLIERS Household
Slide 15: Turning an Essential Trip into an Exciting Treasure Hunt
TURNING AN ESSENTIAL TRIP INTO AN EXCITING TREASURE HUNT “THINGS YOU NEED, THINGS YOU DREAMT OF AND THINGS YOU NEVER KNEW EXISTED” Wow, no way I just needed to ₽199 1 the price can be 2 ₽79 Flowers Celebration Seasonal goods Decoration get shampoo… that low! Entry 2 Cosmetics Hair accessories Haberd
Slide 16: Growing Loyalty Programme with Attractive Benefits
GROWING LOYALTY PROGRAMME WITH ATTRACTIVE BENEFITS HOW IT WORKS BENEFITS FOR CUSTOMERS BENEFITS FOR US 17 1 point = RUB 1 when spent Get the maximum value Data and feedback of the up to 20% active client base m through customised offers(3) of purchase amount is returned to the card in form of points
Slide 17: We Know Our Customers and Their Shopping Habits
WE KNOW OUR CUSTOMERS AND THEIR SHOPPING HABITS LARGE AND GROWING PORTRAIT OF FIX PRICE RUSSIAN CUSTOMERS ARE SENSITIVE TO KEY DEMOGRAPHICS CUSTOMER(2)(3) PRICES(4)… Russian population split by monthly income (%)(1) Division of audience by gender Russian customer 70% of respondents pay attention to
Slide 18: Introduction to Our Stores
INSTEAD OF THOUSANDS WORDS: INTRODUCTION TO OUR STORES YOU ARE WELCOME AT ANY TIME AT OUR VIRTUAL STORE https://fix-price.ru/ Welcome to Fix Price! Unique Customer Value Proposition 18
Slide 19: Operational Excellence
OPERATIONAL EXCELLENCE 3
Slide 20: Operational Excellence – Efficient, Hard to Replicate Business Model
OPERATIONAL EXCELLENCE – EFFICIENT, HARD TO REPLICATE BUSINESS MODEL 1 2 3 4 AGILE EFFICIENT PROPERTY WELL-INVESTED SOURCING STANDARDISATION MANAGEMENT Direct sourcing backed by Fueling expansion at scale and LOGISTICS Across all 4,900+ stores(1) Platform scaled for growth sophisticated algorithms d
Slide 21: Agile Sourcing Model and Long-Standing Supplier Relationships
Sourcing Standardisation Property Management Logistics Technology AGILE SOURCING MODEL AND LONG-STANDING SUPPLIER RELATIONSHIPS LARGE AND DIVERSIFIED HIGHLY EFFICIENT EFFECTIVELY MANAGING FX EXPOSURE SUPPLIER BASE TEAM ORGANISATION LEVERAGING A CLEAR SET OF TOOLS • Top-10 suppliers account for 44% o
Slide 22: Sourcing Right Goods at Right Prices
Sourcing Standardisation Property Management Logistics Technology SOURCING RIGHT GOODS AT RIGHT PRICES TRANSPARENT PROCUREMENT MODEL BEHIND LOW PRICE STRATEGY Fix Price: Supplier: price setter price taker Known to supplier Fixed price offered to customer Retail price (along with Fix Price’s forecast
Slide 23: 100% Standardised Store Portfolio Positioned to Drive Outstanding Unit Economics
Sourcing Standardisation Property Management Logistics Technology 100% STANDARDISED STORE PORTFOLIO POSITIONED TO DRIVE OUTSTANDING UNIT ECONOMICS WE HAVE 100% STANDARDISED BOXES DELIVERING TO OUR CUSTOMERS(1)… …value… …convenience… …and experience Same assortment High traffic locations 75 shelves p
Slide 24: Proven Store Rollout Process
Sourcing Standardisation Property Property Management Management Logistics Technology PROVEN STORE ROLLOUT PROCESS Fit out, recruitment City / location selection Premises evaluation Financial appraisal Terms negotiation and marketing Assessment of Target terms Size / Traffic Revenue / Predominantly
Slide 25: Efficient Property Management Framework
Sourcing Standardisation Property Property Management Management Logistics Technology EFFICIENT PROPERTY MANAGEMENT FRAMEWORK KEY REAL ESTATE STRATEGY HIGHLIGHTS(1) CONSTANT FOCUS ON PORTFOLIO OPTIMISATION Highly automated store roll-out and property management processes help streamline store openin
Slide 26: Logistics Infrastructure Scaled for Growth
Sourcing Standardisation Property Management Logistics Technology LOGISTICS INFRASTRUCTURE SCALED FOR GROWTH thous. sqm - DC space owned leased STEADY GROWTH OF DISTRIBUTION CENTER SPACE… St Petersburg thous. sqm, eop 282 35 thous. sqm • Expected gradual increase of DC space to support store rollout
Slide 27: State of the Art IT Infrastructure Constantly Enhanced
Sourcing Standardisation Property Management Logistics Technology STATE OF THE ART IT INFRASTRUCTURE CONSTANTLY ENHANCED TO SUPPORT FUTURE GROWTH WE LEVERAGE TECHNOLOGY TO AUTOMATE DECISION-MAKING, STRATEGY FOR RESULTING IN BETTER DECISIONS AND LOWER COSTS SCALING BUSINESS Data powering every facet
Slide 28: Substantial Growth Potential
SUBSTANTIAL GROWTH POTENTIAL 4
Slide 29: Approx. 15 Years of Store Runway Potential Ahead
APPROX. 15 YEARS OF STORE RUNWAY POTENTIAL AHEAD(1) SIZEABLE WHITE SPACE POTENTIAL ACROSS RUSSIA AND OTHER INTERNATIONAL GEOGRAPHIES... ...SUPPORTED BY STRUCTURAL FORMAT ADVANTAGES Potential total number of variety value retail stores in Russia and other international geographies(2) ~18,600(8) Abili
Slide 30: Tested Levers to Drive LFL Growth
TESTED LEVERS TO DRIVE LFL GROWTH Creating Growing active Investing in store Delivering constant range “Bonus Card” Managing pricing and customer essential products “newness” holders experience Attractive, clean, well-lit stores to Flexible price Higher spend, shop comfortably Drives desire Drives n
Slide 31: Best-in-Class Financial KPIs
BEST-IN-CLASS FINANCIAL KPIS 5
Slide 32: Strong Growth, Profitability and Cashflow
STRONG GROWTH, PROFITABILITY AND CASHFLOW 1 RAPID GROWTH AT SCALE 2 STRONG PROFITABILITY # of Stores (EoP) Revenue (RUBbn) IFRS16 EBITDA Margin +18% +21% Standardised Asset 4,904 230.5 store portfolio light model 19.4% 19.2% 190.0 с. 9 2.7% 19.0% Months Store 2021 Capex as a 4,167 CAPEX Payback(1) %
Slide 33: Strong Growth Algorithm
1 STRONG GROWTH ALGORITHM STRONG AND CONSISTENT UNIT GROWTH CADENCE IMPROVING SALES DENSITY(1) INDUSTRY-LEADING TOP LINE GROWTH Unit development (# of stores as of end of period) Sales density (RUB thous per sq.m) Revenue development (RUBbn) % of stores % wholesale 13% 10% 11% 14% 13% 12% franchised
Slide 34: Efficient Cost Optimisation Supporting Strong Profitability
2 EFFICIENT COST OPTIMISATION SUPPORTING STRONG PROFITABILITY GROSS MARGIN STABILITY EBITDA MARGIN EBITDA GROWTH Gross margin development (%) EBITDA margin development (%) IFRS 16 IAS 17 EBITDA development (RUBbn) IFRS 16 IAS 17 20% (IFRS 16) 19% 35% (IAS 17) (IFRS 16) 45% 44.2 (IAS 17) 19.0% 19.4%
Slide 35: Asset Light Model with Consistent Unit Returns
3 ASSET LIGHT MODEL WITH CONSISTENT UNIT RETURNS LAST THREE YEARS CAPEX(1) CAPEX COMPOSITION CAPEX (RUBm) (12M 2021, %) 14% CAPEX New stores openings (% of revenue) 2.9% 3.2% 2.7% 4% DC RUB Distribution center CAPEX 0.8% 1.2% 0.8% 6,279m Refurbishments (% of revenue) 31% 51% IT and Other Including C
Slide 36: Industry Leading ROIC
3 INDUSTRY LEADING ROIC(1)(2) US DOLLAR STORES / VALUE RETAIL(3) INTERNATIONAL VALUE RETAIL(4) RUSSIAN RETAIL(4) (Non-capitalised leases) Capitalised leases Capitalised leases 138.0% Average: Average: Average: 23.0% 20.7% 16.9% 90.9% 46.1% 27.1% 28.7% 18.5% 16.0% 22.0% 20.8% 19.3% 11.9% 10.2% 7.2% 2
Slide 37: Fast Inventory Turnover Drives Growth
3 FAST INVENTORY TURNOVER DRIVES GROWTH NET TRADE WORKING CAPITAL DEVELOPMENT(1) ROBUST INVENTORY DAYS AND DAYS PAYABLE LEVELS (RUBm) Inventory days(2) (days) and Days payable(3) (days) % of Inventory days Days payable 0.4% 0.6% 3.5% revenue 2019 65 2019 71 2020 66 2020 66 40,566 19,365 26,991 7,946
Slide 38: Commitment to Sustainable Development
COMMITMENT TO SUSTAINABLE DEVELOPMENT 6
Slide 39: Our Path to Sustainability
OUR PATH TO SUSTAINABILITY ESG Committee IPO ESG assessment In November 2021, Fix Price announced it On 10 March 2021, In 2021, Fix Price undertook was setting up an ESG Committee. The Fix Price went public a comprehensive assessment Committee consists only of independent on the London of all its bu
Slide 40: Four Pillars to Drive ESG Strategy
COMPANY OVERVIEW: FOUR PILLARS TO DRIVE ESG STRATEGY ESG strategic priorities – the 4Ps In 2021 we conducted an in-depth analysis of our ESG practices and identified the following strategic priorities This 4P approach is helping us create a roadmap of metrics and activities to further embed ESG into
Slide 41: Undisputed Leader in Value Retail
UNDISPUTED LEADER IN VALUE RETAIL Value retail business model proven globally 21% Revenue Growth(10) 4,900+ ~18,600(3) ~1/4bn addressable Strong financial algorithm 19.2% Fix Price stores(1) population – over 15 years of EBITDA Margin (IFRS 16)(9) ~5,300 roll-out potential ahead c.90% ROIC (IFRS 16)
Slide 42: Q3 and 9M 2022 Operating and Financial Results
Q3 AND 9M 2022 OPERATING AND FINANCIAL RESULTS
Slide 43: Key Achievements in Q3 / 9M 2022
KEY ACHIEVEMENTS IN Q3 / 9M 2022 21.2% / 23.1% 195 / 558 11.1% / 12.6% Revenue growth Net store openings(1) LFL sales year-on-year growth RUB 13bn / RUB 39bn 18.7% / 19.4% 32.4% EBITDA EBITDA margin Loyal customer base growth year-on-year Source: Company information, Management Accounts for 9M 2021,
Slide 44: Continuous Store Expansion
CONTINUOUS STORE EXPANSION GEOGRAPGICAL COVERAGE (2021 and 9M 2022, eop) Russia LEGEND KEY RUSSIA SIBERIAN FD(1) (Number of stores) +487 +65 CENTRAL FD(1) +xx 4,932 577 +134 xx xx 4,445 512 1,425 1,291 NORTH-WESTERN FD(1) SOUTHERN FD(1) +47 +64 508 461 616 552 FAR-EASTERN FD(1) VOLGA FD(1) +17 +102
Slide 45: Continuous Store Expansion
CONTINUOUS STORE EXPANSION FIX PRICE STORE PORTFOLIO GROWTH SELLING SPACE EXPANSION (Number of stores) (Thous. sqm) +15.5% +14.9% 1,181 5,462 1,022 134 4,753 607 113 516 1,046 4,855 909 4,237 30 September 2021 30 September 2022 30 September 2021 30 September 2022 Company-operated Franchised Company-
Slide 46: LFL Performance
LFL PERFORMANCE LFL SALES (1) REMAINED STRONG DRIVEN BY COMPELLING CVP COMMENTS ON QUARTERLY DYNAMICS • LFL sales increased by 11.1% y-o-y (by 12.9% adjusted for the rouble appreciation effect) Adjusted for the 20.6% rouble • The LFL average ticket was up 16.2% y-o-y (18.1% appreciation adjusted for
Slide 47: Extended CVP and Continued Robust Price Advantage
EXTENDED CVP AND CONTINUED ROBUST PRICE ADVANTAGE 86% OF ASSORTMENT UNDER RUB 100(1) RETAIL SALES MIX % of retail sales % of SKU Q3 2021 Q3 2022 0.3% 0.3% 0.8% 0.5% 8% 8% 4% 19% 15% 19% 10% 28% 27% Food 23% 44% 55% 23% 28% 58% Drogerie 48% 41% 15% 14% 17% 49% 45% Non-food Q3 2021 Q3 2022 Q3 2021 Q3
Slide 48: Strong Revenue Growth and Robust Profitability
STRONG REVENUE GROWTH AND ROBUST PROFITABILITY TOTAL REVENUE GROSS PROFIT (RUBm) (RUBm) LFL Sales growth Gross profit margin 12.6% 31.8% 32.4% 31.4% 32.8% 4.4% 11.1% 9.0% + 23.1% + 28.5% 201,887 66,205 23,026 163,966 + 21.2% 19,724 51,534 + 23.6% 70,099 57,850 22,728 7,926 178,861 18,386 6,634 144,2
Slide 49: Strong Revenue Growth and Robust Profitability (Cont'd)
STRONG REVENUE GROWTH AND ROBUST PROFITABILITY (CONT’D) EBITDA (IFRS 16) OPERATING PROFIT (RUBm) (RUBm) EBITDA margin (IFRS 16 ) Operating profit margin 19.0% 18.7% 18.8% 19.4% 13.6% 14.0% 13.4% 14.6% + 27.1% 39,127 + 33.6% 29,437 30,792 + 19.8% 22,032 + 24.6% 13,136 9,819 10,964 7,880 Q3 2021 Q3 20
Slide 50: SG&A Expenses Analysis
SG&A EXPENSES ANALYSIS SG&A BREAKDOWN COMMENTS (% of revenue) • Selling, general and administrative expenses (SG&A) were up 27 bps y-o-y to 18.9% of revenue due to the increase in the shares of staff costs and rental expenses in IFRS 16 revenue, which was partially mitigated by efficiencies gained i
Slide 51: Capital Expenditures to Support Further Growth
CAPITAL EXPENDITURES TO SUPPORT FURTHER GROWTH CAPEX(1) CAPEX COMPOSITION (RUB bn) (Q3 2022, %) 11% New stores openings CAPEX 3.2% 2.7% 2.5% 2.6% (% of revenue) RUB DC 50% 1.8bn 39% IT and Other 5,497 5,214 COMMENTS 1,805 1,420 • CAPEX for Q3 2022 amounted to RUB 1.8 billion compared to RUB 1.4 bill
Slide 52: Net Working Capital Dynamics
NET WORKING CAPITAL DYNAMICS NET TRADE WORKING CAPITAL DEVELOPMENT(1) ROBUST INVENTORY DAYS AND DAYS PAYABLE LEVELS (RUBm) Inventory days(2) (days) and Days payable(3) (days) % of Inventory days Days payable 2.1% 5.7% revenue 9M 2021 79 9M 2021 75 42,095 37,574 9M 2022 83 9M 2022 64 15,292 4,631 1,6
Slide 53: Conservative Debt Level and Superior Cash Flow Generation
CONCERVATIVE DEBT LEVEL AND SUPERIOR CASH FLOW GENERATION NET DEBT / (CASH)(1) FCF DYNAMICS(3) (RUBm) (RUBm) Leverage 0.4x % of 12.3% 14.3% 0.5x 0.2x 13.1% ratio(2) revenue 30,290 28,947 9,197 7,342 29500,0 29000,0 28500,0 27,688 20,229 23,480 28000,0 21,768 27500,0 27000,0 26500,0 26000,0 25500,0 2
Slide 54: Appendix
APPENDIX
Slide 55: P&L Summary
P&L SUMMARY In millions of Russian rubles 2019 2020 2021 Revenue 142,880 190,059 230,473 Retail revenue 123,194 166,025 203,328 Wholesale revenue 19,686 24,034 27,145 Cost of sales (96,919) (128,544) (157,073) Gross profit 45,961 61,515 73,400 Gross margin, % 32.2% 32.4% 31.8% SG&A (excl. D&A) (19,1
Slide 56: Balance Sheet Summary
BALANCE SHEET SUMMARY In millions of Russian rubles 31.12.2019 31.12.2020 31.12.2021 ASSETS Non-current assets 18,930 25,297 29,805 Property, plant and equipment 10,882 13,308 18,142 Right-of-use assets (non-current) 6,220 8,554 9,636 Other non-current assets 1,828 3,435 2,027 Current assets 34,730
Slide 57: Cash Flow Summary
CASH FLOW SUMMARY In millions of Russian rubles 2019 2020 2021 Profit before tax 17,535 26,310 30,596 Cash from operating activities before changes in working capital 28,216 38,338 46,155 Changes in working capital (2,428) (1,548) (9,646) Net cash generated from operations 25,788 36,790 36,509 Net i
Slide 58: EBITDA and Net Debt Reconciliation
EBITDA AND NET DEBT RECONCILIATION EBITDA (IAS 17) RECONCILIATION In millions of Russian rubles 2019 2020 2021 EBITDA (IFRS 16) 27,150 36,788 44,155 Rental expense (7,221) (7,999) (9,840) Utilities (153) (157) (153) EBITDA (IAS 17) 19,776 28,632 34,162 NET DEBT RECONCILIATION In millions of Russian