Magnit · RUS:MGNT
Magnit — H1 2018 Earnings Presentation
23 slides from Magnit's earnings presentation, Jul 26, 2018
Slide 1: Investor Presentation
INVESTOR PRESENTATION 1H 2018 RESULTS published on July 26, 2018
Slide 2: Magnit at a Glance
Magnit at a Glance Magnit at a Glance As of June 30, 2018 2 808 16 960 Total Number 5 945 5 980 37 Cities & Towns Selling Space Trucks DCs of Stores (thous.sq.m.) As of June 30, 2018 №1 $9 bn 9 % Retailer in Russia Market Share in Russian Measured by Number Capitalization Grocery Sector of Stores &
Slide 3: Russian Food Retail Market
Magnit at a Glance Russian Food Retail Market RUB 14trillion 70 % Market Modern Size Retail FY 2017 Penetration FY 2017 Market Composition by Format Non-Modern 30% 70% Modern Open Markets 7% Top-7 Retail Chains 28% Traditional Trade Other chains 23% 29% Modern Non-Chain Stores 13% Source: INFOLine,
Slide 4: Magnit vs Peers
Magnit at a Glance Magnit vs Peers Selling Space Number Revenue Market Cap Market Share thous. sq.m., of Stores, eop 2017 RUB bn, eop 2017 US$ 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 5: Geographical Coverage
Operational Overview Geographical Coverage 2 808 Cities & Towns 7 Federal Regions North Southern Central Volga North Urals Siberia Caucasus West 370 616 Convenience Stores 1 870 3 611 3 547 1 271 1 218 12 503 12 Hypermarkets 8 69 39 68 16 32 244 Supermarkets 11 54 43 56 17 19 13 213 178 Drogerie Sto
Slide 6: Logistics System
Operational Overview Logistics System 37 1 640 16 960 5 980 Trucks DCs thous.sq.m. Total Number Warehousing Space of Stores 4 858 Centralization Ratio Central 9 477 % 5 295 1H2018 Future Targets Volga 10 470 Delivered from DC 2 762 89 Southern 8 308 90 Delivered from supplier Urals 3 141 1 615 11 10
Slide 7: Suppliers
Operational Overview Suppliers 5 900 Domestic Suppliers 1 200 Federal Suppliers 4 700 Local Suppliers 55% 45% Assortment Source: Company, as of June 30, 2018 7
Slide 8: Direct Import and Private Label
Operational Overview Direct Import 7 % 744 International Open Direct Import Contracts (Annual Average) Private Label 716 9 % 78% PL Share Food SKUs M of Revenue Items Source: Company, Direct Import – as of December 31, 2017; Private Label – as of June 30, 2018 8
Slide 9: Employees
Operational Overview Employees 275 434 Employees 202 349 35 415 22 352 Regional 11 983 3 335 Head Office Other In-store Distribution Branches 1000 employees P 33 695 = Average Monthly Salary * Source: Company, as of June 30, 2018 * as of December 31, 2017 9
Slide 10: Competitive Attributes and Sales Catchment Area
Operational Overview Competitive Attributes Location Price Quality Assortment Reliability Atmosphere Sales Catchment Area 5 000 People — Minimum Population Competitor #1 Competitor #2 (1 500–1 600 Families) 500m Magnit #1 P8 000-12 000 = Monthly Family Food Budget Overlap “Good” 43-45 % of Family Ca
Slide 11: Convenience Store
Operational Overview Convenience Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 473 P 247 sq.m. Total = 327 Selling Space sq.m. $4 3 years Traffic tickets/sq.m./day If Owned Sales Mix 89 % Food 2,5 4-6 years Sales Density 11% Non-food C
Slide 12: Hypermarket
Operational Overview Hypermarket Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 6 340 P 558 sq.m. Total = 6-9 years 2 861 Selling Space sq.m. $9 Traffic Cost of New Store S: up to 3 000 tickets/sq.m./day per sq.m. of Total Space, thousand RUB M: 3 000-
Slide 13: Supermarket
Operational Overview Supermarket Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 2 111 P 439 sq.m. Total = 6-9 years 1 104 Selling Space sq.m. $7 Traffic Cost of New Store tickets/sq.m./day per sq.m. of Total Space, thousand RUB Sales Mix 1,6 Owned 71-1
Slide 14: Drogerie Store
Operational Overview Drogerie Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 287 P 314 sq.m. Total = 230 Selling Space sq.m. $5 3 years Traffic tickets/sq.m./day If Owned Sales Mix 0,8 4-6 years 100% Non-food Sales Density sales/sq.m./y
Slide 15: Format Summary
Operational Overview Format Summary Size Average Traffic Density Sales LFL 1H2018- Store Owner- Payback Cost of New Time of the Store Ticket Tickets/ Sales/ Mix 1H2017 ship Structure Years Store to Maturity sq.m. sq.m./day sq.m./year % per sq.m. Months of Total Space • Total • Food • Av.ticket • Own
Slide 16: Summary P&L
Financial Overview Summary P&L RUB MN 2016 2017 Y-o-Y Growth Net sales 1,074,812 1,143,314 6.4% Cost of sales (779,053) (838,672) 7.7% Gross profit 295,759 304,643 3.0% Gross margin, % 27.5% 26.6% SG&A (192,390) (220,245) 14.5% Other income, net 4,286 7,157 67.0% EBITDA 107,793 91,778 (14.9%) EBITDA
Slide 17: Revenue & Costs
Financial Overview Revenue & Costs Revenue Dynamics Net Income Dynamics RUB bn Sales Growth, RUB Sales Growth, RUB RUB bn +13,1% +6,4% -7,9% -34,7% 59 54 1 075 1 143 951 36 LFL LFL -0,3% -3,4% 2015 2016 2017 2015 2016 2017 SG&A Expense Structure 2017 Margin Dynamics Revenue — 1 143 RUB bn in SG&A,%
Slide 18: Gross Margin Bridge and EBITDA Margin Bridge
Financial Overview Gross Margin Bridge % of Sales 33 -97 b.p. -87 b.p. 31 28,5 27,5 29 -0,9 -0,1 -0,6 -0,2 26,6 27 25 23 21 19 17 15 GM Trading Margin Transport GM Trading Margin Transport GM 2015 2016 2017 EBITDA Margin Bridge % of Sales -91 b.p. -200 b.p. 12 10,9 -1,0 10,0 0,3 -0,6 0,1 -0,1 0,0 0,
Slide 19: Free Cash Flow
Financial Overview Free Cash Flow RUB mn 2016 107 328 -18 126 Working Capital Analysis -13 594 -12 566 63 042 -49 844 Average Days Payable to Suppliers is 38 Days. -278 12 920 -28 976 24 224 8 168 Inventory Management Days is 64 Days Adjusted Change in Net Interest Taxes OCF Capex Other Cash FCF Pay
Slide 20: Balance Sheet
Financial Overview Balance Sheet RUB MN 2016 2017 ASSETS Property plant and equipment 289,945 329,827 Other non-current assets 6,081 6,959 Cash and cash equivalents 16,559 18,337 Inventories 134,916 162,205 Trade and other receivables 844 1,399 Advances paid 5,208 4,990 Taxes receivable 448 598 Shor
Slide 21: Capex Figures
Financial Overview Capex Figures Buildings: Complete & under Machinery & Equipment Other Assets Land Construction FY 2017 44 443 20 355 7 928 865 RUB 74 bn RUB 500 mn Source: Company’s calculations based on IFRS accounts for 2017 21
Slide 22: Debt Burden
Financial Overview Debt Burden Debt Level Dynamics Credit Metrics Credit Profile RUB mn Net Debt EBITDA / Finance Expenses The Company has Short-term Debt Long-term Debt 127 606 126 460 14,0 an Impeccable Credit History % 111 047 108 123 12,0 Collaboration with 104 228 86 338 95 837 10,0 the Largest
Slide 23: Contact Information
Contact Information Contact Information Dina Svishcheva Deputy IR Director chistyak@magnit.ru http://ir.magnit.com 15/2 Solnechnaya Street Krasnodar, 350072 Russian Federation 23