Fix Price PJSC · RUS:FIXR
Fix Price PJSC — Fix Price — Investor Presentation (September 2023)
57 slides from Fix Price PJSC's investor presentation, September 2023
Slide 1: Undisputed Leader in Russian Value Retail
UNDISPUTED LEADER IN RUSSIAN VALUE RETAIL September 2023
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 6,000+ $4.1bn stores 2022 Revenue(1) c.18,600 Total store potential in Consistently low prices Treasure hunt & essentials c.90% $791m Russia, Belarus and Kazakhstan (6) Market share in variety 2022 EBITDA(1) value ret
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 Financials & Operational Targets
KEY FINANCIALS & OPERATIONAL TARGETS Key metric IPO guidance 2021 fact 2022 fact Net store openings(1) ~700 in 2021, ~750 in 2022 ✓ 737 ✓ 759 LFL(2) growth ~10% area in 2021-2022 ✓ 9.0%(3) ✓ 10.1% 19.2%, unchanged from the average level for FY 2019-2020, ✓ ✓ Consistent with latest historical perform
Slide 7: 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 8: Leader in Large and Growing Market
LEADER IN LARGE AND GROWING MARKET 1
Slide 9: Value Retail Is Proven Globally
VALUE RETAIL IS PROVEN GLOBALLY FIX PRICE IS AMONGST THE GLOBAL SECTOR LEADERS(1) LTM Revenue in USDbn(2) US USDbn(2) USDbn(2) Revenue 4.0(3) Revenue 6.2(4) Revenue 4.1(5) # stores 1,507 # stores 1,146 # stores 5,663 ~256m(7) ~149m(7) ~135m(7) USDbn(2) USDbn(2) USDbn(2) USDbn(2) Revenue 38.8 Revenue
Slide 10: 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) 42.5tr 2022 Russian Total Retail Market 80 c.90% presence in Russian market share in regions Variety Value Retail market in Russia(4) 2022 Ru
Slide 11: 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-’22 +15% +24% As % of addressable As % of total market category TAM VVR Food and Drinks 42% 7% 3,564 Homewares, Home Furnish
Slide 12: 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 226m+ countries of operation(1) Company market entry / Exit 2017 2022 2019 2022 Population i
Slide 13: Unique Customer Value Proposition
UNIQUE CUSTOMER VALUE PROPOSITION 2
Slide 14: Deep Value Across a Diverse Product Offering
DEEP VALUE ACROSS A DIVERSE PRODUCT OFFERING UNCOMPROMISING EDLPs(1)… …CONSTANTLY CHANGING ASSORTMENT… By 2022 retail sales $1.4 / ₽99 $2.1 / ₽149 $1.1 / ₽79 $2.8 / ₽199 Several $0.84 / ₽59 $3.5 / ₽249 67% of assortment is rotated anchor price points(2) $0.78 / ₽55 $4.3 / ₽299 33% of retail sales is
Slide 15: Driving Constant Newness in Assortment
DRIVING CONSTANT NEWNESS IN ASSORTMENT WHAT? HOW? C.50 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 16: 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 ₽99 Flowers Celebration Seasonal goods Decoration get shampoo… that low! Entry 2 Cosmetics Hair accessories Haberd
Slide 17: Growing Loyalty Programme with Attractive Benefits
GROWING LOYALTY PROGRAMME WITH ATTRACTIVE BENEFITS HOW IT WORKS BENEFITS FOR CUSTOMERS BENEFITS FOR US 22 1 point = RUB 1 when spent Get the maximum value Data and feedback of the up to 30% active client base m through customised offers(3) of purchase amount is returned to the card in form of points
Slide 18: 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 72% of respondents are sensitive to
Slide 19: 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 19
Slide 20: Operational Excellence
OPERATIONAL EXCELLENCE 3
Slide 21: 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 6,000+ stores(1) Platform scaled for growth sophisticated algorithms d
Slide 22: 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 Department head 1 Increasing share o
Slide 23: 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 24: 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 25: 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 26: 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 procedures help streamline 100% store
Slide 27: 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 • Expected gradual increase of DC space thous. sqm, eop 343 36 thous. sqm to support store rollout
Slide 28: 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 29: Substantial Growth Potential
SUBSTANTIAL GROWTH POTENTIAL 4
Slide 30: Over 15 Years of Store Runway Potential Ahead
OVER 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) Ability
Slide 31: 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 32: Best-in-Class Financial KPIs
BEST-IN-CLASS FINANCIAL KPIS 5
Slide 33: 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 +15.5% +20.5% Standardised Asset 5,663 277.6 store portfolio light model 19.5% 19.4% 4,904 230.5 с. 10 4.3% 19.2% Months Store 2022 CAPEX as a CAPEX Payback
Slide 34: 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 sqm) Revenue development (RUBm) % of % wholesale franchise 10% 11% 11% 13% 12% 11% revenue
Slide 35: Efficient Cost Optimisation Supporting Strong Profitability
2 EFFICIENT COST OPTIMISATION SUPPORTING STRONG PROFITABILITY GROSS MARGIN EVOLUTION EBITDA MARGIN STABILITY EBITDA GROWTH Gross margin development (%) EBITDA margin development (%) IFRS 16 IAS 17 EBITDA development (RUBbn) IFRS 16 IAS 17 23% (IFRS 16) 26% 20% (IAS 17) (IFRS 16) 19% (IAS 17) 19.4% 1
Slide 36: 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 2022, %) CAPEX 15% (% of revenue) 3.2% 2.7% 4.3% 30% New stores openings Distribution RUB DC center CAPEX 1.2% 0.8% 2.4% 12,015m (% of revenue) 55% IT and Other Including CAPEX for buyout o
Slide 37: 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 102.0%(5) Average: Average: Average: 74.8% 27.7% 24.4% 17.9% 68.8% 32.4% 26.2% 26.6% 22.0% 16.3% 18.8% 15.7% 14.9% 12.2% 5.7% 2022 2022 Five Doll
Slide 38: 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 0.6% 3.4% 3.3% revenue 2020 66 2020 66 40,566 41,020 2021 78 2021 71 26,991 9,075
Slide 39: Commitment to Sustainable Development
COMMITMENT TO SUSTAINABLE DEVELOPMENT 6
Slide 40: Company Overview: Four Pillars to Drive ESG Agenda
COMPANY OVERVIEW: FOUR PILLARS TO DRIVE ESG AGENDA ESG strategic priorities – the 4Ps In 2022 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 activities to further embed ESG into our business
Slide 41: Undisputed Leader in Value Retail
UNDISPUTED LEADER IN VALUE RETAIL Value retail business model proven globally 20.5% Revenue Growth(9) 5,600+ ~18,600(3) ~1/4bn addressable Strong financial algorithm 19.5% Fix Price stores(1) population – over 15 years of EBITDA Margin (IFRS 16)(8) ~6,100 roll-out potential ahead c.70% ROIC (IFRS 16
Slide 42: Q2 and H1 2023 Operating and Financial Results
Q2 AND H1 2023 OPERATING AND FINANCIAL RESULTS
Slide 43: Key Achievements in H1 2023
KEY ACHIEVEMENTS IN H1 2023 RUB 136bn 376 25.4% Revenue Net store openings(1) Loyal customer base growth year-on-year 33.3% RUB 24bn RUB 20bn Gross margin EBITDA Net profit Source: Company information, Reviewed IFRS accounts for H1 2022 and H1 2023 Notes: 1 Including Company-operated and franchise s
Slide 44: Continuous Store Expansion
CONTINUOUS STORE EXPANSION GEOGRAPGICAL COVERAGE (2022 and H1 2023, eop) LEGEND KEY RUSSIA NORTH-WESTERN FD(1) SIBERIAN FD(1) Russia (Number of stores) +330 +32 +49 CENTRAL FD(1) +xx 5,428 553 644 5,098 595 +86 xx 521 xx 1,554 1,468 FAR-EASTERN FD(1) +8 SOUTHERN FD(1) 108 100 +44 680 636 URALS FD(1)
Slide 45: Continuous Store Expansion
CONTINUOUS STORE EXPANSION FIX PRICE STORE PORTFOLIO GROWTH SELLING SPACE EXPANSION (Number of stores) (Thous. sqm) +15.0% +14.7% 1,308 6,039 1,137 148 5,267 667 128 578 1,160 5,372 1,009 4,689 30 June 2022 30 June 2023 30 June 2022 30 June 2023 Company-operated Franchised Company-operated Franchise
Slide 46: LFL Performance
LFL PERFORMANCE 2-YEAR STACKED LFL SALES GROWTH(1)(2) COMMENTS ON QUARTERLY DYNAMICS LFL Sales (Current Year) LFL Sales (Prior Year) • In Q2 2023, LFL sales were 7.9% lower y-o-y on the back of the high base effect from the previous year. The LFL average ticket grew by 1.8%; LFL traffic was 9.6% low
Slide 47: Extended CVP and Continued Robust Price Advantage
EXTENDED CVP AND CONTINUED ROBUST PRICE ADVANTAGE 80% OF ASSORTMENT UNDER RUB 99(1) RETAIL SALES MIX % of retail sales % of SKU Q2 2022 Q2 2023 0.4% 0.0% 0.6% 0.0% 3% 13% 14% 14% 9% 31% 28% 21% 20% Food 22% 42% 44% 26% 28% 50% 47% 8% Drogerie 15% 9% 13% 16% 38% 43% 44% Non-food Q2 2022 Q2 2023 Q2 20
Slide 48: Revenue Growth and Robust Profitability
REVENUE GROWTH AND ROBUST PROFITABILITY TOTAL REVENUE GROSS PROFIT (RUB m) (RUB m) LFL Sales growth 13.5% (6.6)% Gross profit margin 33.0% 33.3% + 3.0% + 3.8% 131,788 135,677 45,148 43,477 15,100 15,591 116,688 120,086 H1 2022 H1 2023 H1 2022 H1 2023 Retail Wholesale Source: Reviewed IFRS accounts f
Slide 49: Revenue Growth and Robust Profitability (Cont'd)
REVENUE GROWTH AND ROBUST PROFITABILITY (CONT’D) ADJUSTED EBITDA (IFRS 16) (1) OPERATING PROFIT (RUB m) (RUB m) Adjusted EBITDA margin Operating profit margin 19.7% 17.8% 14.9% 12.0% (IFRS 16) (7.3)% (16.8)% 25,991 24,093 19,618 16,327 H1 2022 H1 2023 H1 2022 H1 2023 Source: Reviewed IFRS accounts f
Slide 50: SG&A Expenses Analysis
SG&A EXPENSES ANALYSIS SG&A BREAKDOWN(1) COMMENTS (% of revenue) • SG&A costs (excl. LTIP expense and D&A) as a percentage of revenue totalled IFRS 16 15.7%, compared to 13.8% a year ago, driven by negative operational leverage effect and increased staff costs 21,5% • Staff costs (excl. LTIP) as a p
Slide 51: Capital Expenditures to Support Further Growth
CAPITAL EXPENDITURES TO SUPPORT FURTHER GROWTH CAPEX(1) CAPEX COMPOSITION (RUB bn) (H1 2023, %) 14% 0,3% New stores openings CAPEX DC (% of revenue) 2.8% 2.5% RUB 3.4bn 54% Refurbishments 32% IT and Other COMMENTS 3.7 • CAPEX for H1 2023 was RUB 3.4 billion, down from RUB 3.7 billion in H1 2022, due
Slide 52: Net Working Capital Dynamics
NET WORKING CAPITAL DYNAMICS NET TRADE WORKING CAPITAL DEVELOPMENT(1) ROBUST INVENTORY DAYS AND DAYS PAYABLE LEVELS (RUB m) Inventory days(2) (days) and Days payable(3) (days) NTWC as Inventory days Days payable % of 7.0% 4.2% revenue H1 2022 86 H1 2022 63 42,583 40,026 17,992 H1 2023 82 H1 2023 65
Slide 53: Conservative Debt Level and Superior Cash Flow Generation
CONVERVATIVE DEBT LEVEL AND SUPERIOR CASH FLOW GENERATION NET DEBT / (CASH)(1) FCF DYNAMICS(3) (RUB m) (RUB m) Leverage % of (0.04)x (0.2)x 3.6% 9.0% 10.1% ratio(2) 0.5x revenue 24,857 22500,0 22000,0 21500,0 20,564 9,903 13,701 21000,0 20500,0 20000,0 19500,0 19000,0 18500,0 18000,0 17500,0 17000,0
Slide 54: Appendix
APPENDIX
Slide 55: P&L Summary
P&L SUMMARY In millions of Russian roubles 2020 2021 2022 Revenue 190,059 230,473 277,644 Retail revenue 166,025 203,328 246,212 Wholesale revenue 24,034 27,145 31,432 Cost of sales (128,544) (157,073) (185,650) Gross profit 61,515 73,400 91,994 Gross margin, % 32.4% 31.8% 33.1% SG&A (excl. D&A) (25
Slide 56: Balance Sheet Summary
BALANCE SHEET SUMMARY In millions of Russian roubles 31.12.2020 31.12.2021 31.12.2022 ASSETS Non-current assets 25,297 29,804 40,532 Property, plant and equipment 13,308 18,142 19,692 Right-of-use assets (non-current) 8,554 9,636 11,598 Other non-current assets(1) 3,435 2,026 9,242 Current assets 56
Slide 57: Cash Flow Summary
CASH FLOW SUMMARY In millions of Russian roubles 2020 2021 2022 Profit before tax 26,310 30,596 37,825 Cash from operating activities before changes in working capital 38,338 46,155 56,889 Changes in working capital (1,548) (9,646) (1,688) Net cash generated from operations 36,790 36,509 55,201 Net