Magnit · RUS:MGNT
Magnit — FY2019 Earnings Presentation
47 slides from Magnit's earnings presentation, Feb 6, 2020
Slide 1: Investor Presentation FY & 4Q 2019 Results
Investor Presentation FY & 4Q 2019 RESULTS
Slide 2: Disclaimer
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Disclaimer This presentation ("Company Presentation") comprises certain written materials/ slides No representation or warranty, express or implied, is given by
Slide 3: Russian Market Overview
Russian Market Overview Russian Macro Environment • Russian Food Retail Market Potential • Russian Food Retail Market Evolution
Slide 4: Russian Macro Environment
Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Russian Market Overview Magnit Today Russian Macro Environment Stable economic growth will support retail market 1 Real GDP demonstrate sluggish growth Real GDP YoY growth, % 1.7% YoY in 4Q 2019 4 F
Slide 5: Russian Food Retail Market Potential
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results 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 retai
Slide 6: Russian Food Retail Market Evolution
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Russian Food Retail Market Evolution Grocery retail entering maturity phase, growth just above inflation Russian Food Retail Sales Early phase Growth phase Matur
Slide 7: Magnit Today
Magnit Today Magnit at a Glance • Geographical Coverage • Format Summary Convenience Store Supermarkets • Drogerie Store Other Small Formats and Pilots Own Production & Private Label Logistics System • Target Organizational Structure • Employees
Slide 8: Magnit at a Glance
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Magnit at a Glance #1 retailer in Russia by number of stores with unrivalled infrastructure platform Key differentiation 20,725 7,238 38 5,656 Total Number Selli
Slide 9: Geographical Coverage
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Geographical Coverage North North Caucasus Southern Central Volga West Urals Siberian Total Cities 3,742 & Towns Convenience 403 2 130 4 238 3 968 1 566 1 442 87
Slide 10: Format Summary
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Format Summary Size of the Store Average ticket Sales density*, Sales LFL Ownership sq.m (excl. VAT), th RUB/ mix 4Q 2019 structure selling space RUB sq.m/year F
Slide 11: Convenience Store
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Convenience Store 01 A convenient and affordable store for everyday shopping Size of the Store. sq. m Overview Total size, 483 Routine shopping Food for tonight
Slide 12: Convenience Store
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Convenience Store 02 Key operational statistics Store openings Selling space, thousand sq. m Payback period Leased 11.4% 4,952 Increase YoY 82% leased 18% owned
Slide 13: Supermarket
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Supermarket 01 Comfortable and affordable store for everyday and major shopping Size of the Store. sq. m Overview Total size, 4,254 Major shopping Special occasi
Slide 14: Supermarket
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Supermarket 02 Key operational statistics Store openings Selling space, thousand sq. m Payback period Leased 0.7% 948 Increase YoY 35% leased 65% owned 6-7 years
Slide 15: Drogerie Store
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Drogerie Store 01 Within walking distance to buy beauty and health products Size of the Store, sq. m Overview Total size, 291 Regular shopping for personal care
Slide 16: Drogerie Store
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Drogerie Store 02 Key operational statistics Store openings Selling space, thousand sq. m Payback period 25.8% Leased 1,302 Increase YoY 89% leased 11% owned 2-3
Slide 17: Other Small Formats and Pilots
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Other Small Formats and Pilots 01 Cash&Carry Pharmacy City Bulk shopping for future Pharmaceutical & health care Small store offering ready-to-go / ready-to-eat
Slide 18: Other Small Formats and Pilots
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Other Small Formats and Pilots 02 Evening Russian Post Petrol Stations Modern and convenient alcoholic beverages store Basic assortment in Russian Post offices B
Slide 19: E-commerce
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today E-commerce 1 E-commerce has 2 Russian e-commerce 3 FMCG categories particularly considerable growth market under-penetrated in Russia potential in Russia remains
Slide 20: Private Label
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Private Label Well-developed Unique value offer Private Label will help us to differentiate from competition infrastructure We have what it takes to launch more
Slide 21: Own Production
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Own Production We develop own production facilities to increase the share and variety of private label products in our stores Agricultural enterprise Food produc
Slide 22: Organizational Structure
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Organizational Structure Decentralized Target operational organization decision-making Convenience 1 Front office decisions are now delegated Head Stores to regi
Slide 23: Logistics System
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Logistics System North North Central Volga Southern Urals West Siberian Caucasus Total Centralization Ratio FY 2019 91% Distribution Delivered from DC Centers 10
Slide 24: Employees
Russian Market Overview Magnit Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Today Employees 308,432 Headcount of Employees 36,098 Distribution 243,669 12,622 Regional In-store branches 11,541 Head Office Other Super- Drogerie Convenience forma
Slide 25: Operating and Financial Results
Operating and Financial Results Operational Highlights • Summary Profit & Loss Revenue & Costs • Gross Margin & EBITDA Free Cash Flow Balance Sheet CAPEX Analysis • Leverage Policy
Slide 26: Operating Highlights
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results 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
Slide 27: Summary Profit & Loss
Russian Market Overview Magnit Today Corporate Governance Operating and Financial Results 4Q 2019 Operating and Financial Results Appendix Summary Profit & Loss RUB mln IAS 17 IFRS 16 1H 2018 1H 2019 YoY growth 1H 2018 1H 2019 YoY Growth Net sales 595,263 657,917 10.5% 595,263 657,917 10.5% Cost of
Slide 28: Revenue & Costs
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Revenue & Costs Revenue YoY growth, % SG&A Expense Dynamics 10.5% Structure % % 7.2% 657,9 RUB bln 595,3 RUB bln of sales of SG&A 555,0 Total 142,6 21,7% 100,0%
Slide 29: Gross Margin & EBITDA
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Gross Margin & EBITDA IAS 17 IFRS 16 Gross -106 b.p. Margin 26,8% Bridge, 24,7% -1,33% 0,28% 23,7% 23,7% As % of revenue Trading Transport YoY growth margin -2.0
Slide 30: Balance Sheet
Russian Market Overview Magnit TodayOperating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Balance Sheet RUB mln ASSETS 2018 1H 2019 EQUITY AND LIABILITIES 2018 1H 2019 Property plant and equipment 346,013 343,647 Equity 217,137 201,041 Right-of-use ass
Slide 31: Leverage Policy
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Leverage Policy Low Currency Risk Debt Level Dynamics, Debt portfolio maturity No loans denominated in foreign currency RUB bln RUB bln 198,3 100% 198.313 Low In
Slide 32: Free Cash Flow
Russian Market Overview Magnit TodayOperating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Free Cash Flow 1H 2018, Working RUB mln 45,004 (16,443) Capital Analysis (4,892) (888) 22,780 (21,883) 1,540 2,437 - (10,241) 41 Average Days (7,804) Adjusted Cha
Slide 33: CAPEX Analysis
Russian Market Overview Magnit Today Corporate Governance Operating and Financial Results 4Q 2019 Operating and Financial Results Appendix CAPEX Analysis 1H 2019 1H 2018 RUB mln RUB mln Total 22,314 21,883 Machinery and equipment 11,271 (51%) 6,689 (31%) Construction in progress 10,723 (49%) and bui
Slide 34: Corporate Governance
Corporate Governance Corporate Governance Overview • Best in Class Retail Management Team • Guidance for FY 2019
Slide 35: Corporate Governance Overview
Russian Market Overview Magnit TodayOperating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Corporate Governance Overview Board Committees Overview Status Independent Non-Executive CEO Non-Executive Director Director Charles Pat James Jan Jansen Walter E
Slide 36: Best in Class Retail Management Team
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 3Q 2019 Operating and Financial Results Appendix Best in Class Retail Management Team Highly experienced retail leadership team — long on local Russian expertise Jan Elena Jyrki Elena Maria Evgeny Vladimir Rusl
Slide 37: Guidance for FY 2020
Russian Market Overview Magnit TodayOperating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Guidance for FY 2020 Number of Store ~700/250 ~1,130/1,110 ~12/6 Openings (gross/net) Convenience Stores Drogerie Stores Supermarkets Refurbished Stores ~900 ~380
Slide 38: Appendix
Appendix Russian Macro Environment • Russian Food Retail Market Potential • Top-10 Russian Food Retailers • Convenience Store • Supermarkets Drogerie store • Operating Highlights Quarterly Quarterly Operating Data Summary
Slide 39: Russian Macro Environment
Russian Market Overview Magnit Today Operating and Financial ResultsCorporate Governance 4Q 2019 Operating and Financial Results Appendix Russian Macro Environment Return to parent slide 1 Real GDP demonstrate sluggish growth 2 Inflation is healthy 3 Record low unemployment level Real GDP YoY growth
Slide 40: Russian Food Retail Market Potential
Russian Market Overview Magnit TodayOperating and Financial ResultsCorporate Governance 4Q 2019 Operating and Financial Results 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
Slide 41: Top-10 Russian Food Retailers
Russian Market Overview Magnit TodayOperating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results Appendix Top-10 Russian Food Retailers Return to parent slide X5 11,6% Magnit 9,4% Lenta 3,1% 35.3% Auchan 2,3% Share of TOP-10 Red & White 2,3% 28.7% Dixy 2,2% Share of T
Slide 42: Convenience Store
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results 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, % 2017 2019 2018 Q YoY g
Slide 43: Supermarket
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results 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, % 2017 2018 2019 Q YoY growth,
Slide 44: Drogerie Store
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results 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, % 2017 2018 2019 Q YoY grow
Slide 45: Quarterly Operating Highlights
Russian Market Overview Magnit Today Operating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results 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
Slide 46: Quarterly Operating Data Summary
Russian Market Overview Magnit TodayOperating and Financial Results Corporate Governance 4Q 2019 Operating and Financial Results 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 SALES TOTAL 288.6 306.7 310.1 331.6 1,237
Slide 47: Contact Information
Contact Information Albert Avetikov Chief Investor Relations Officer avetikov_am@magnit.ru http://ir.magnit.com 15/2 Solnechnaya Street Krasnodar, 350072 Russian Federation 47