Magnit · RUS:MGNT
Magnit — FY2022 Earnings Presentation
51 slides from Magnit's earnings presentation, Sep 8, 2023
Slide 1: Investor Presentation 4Q 2022 Results
Investor Presentation 4Q 2022 RESULTS
Slide 2: Disclaimer
Russian Market Overview Strategy Magnit Today Operating and Financial Results 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 in this Company Pres
Slide 3: Magnit at a Glance
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit at a Glance #1 retailer in Russia by number of stores with unrivalled infrastructure platform Key differentiation 27,405 9,472 44 5,407 Total Number Selling Space, Distribution Trucks points of Stores thous
Slide 4: Geographical Coverage
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Geographical Coverage North North Caucasus Southern Central Volga West Urals Siberian Total 4,068 518 Convenience 17 416 Cities Stores 2 713 4 596 4 607 2 059 1 812 1 111 & Towns Magnit 19 7 Federal Supermarkets 1
Slide 5: Operating Highlights
Russian Market Overview Strategy Magnit Today 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, % 2,300 26,077 27,405 9,472 8,997 1,808 20,725 21,564 7,
Slide 6: Financial Performance
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Financial Performance Concise Profit & Loss Core 2020 2021 2022 YoY achievements Sales, bn Rub 1,553.8 1,856.1 2,352.0 +26.7% Gross margin, % 23.5 23.4 22.8 -0.7pp SG&A, % (20.5) (20.4) (21.0) -0.6пп Improvement o
Slide 7: Russian Market Overview
Russian Market Overview Russian Macro Environment • Russian Food Retail Market Potential
Slide 8: Russian Macro Environment
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Russian Macro Environment -2.7% -3.9% Real GDP in 4Q 2022 Real food retail sales 1 4 growth is negative. decreased y-o-y due to the decline of economic Market leaders are activity gaining market share YoY in 4Q 20
Slide 9: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today 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 retail market 4 Growth is coming retail market is big for
Slide 10: Strategy
Strategy Our Strategic Goal • Our Strategy at a Glance Dixy Acquisition: Integration Plan & Timeline Sustainability
Slide 11: Our Strategic Goal
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Our Strategic Goal Cement current leading Federal retail positions growing market share significantly and profitably How we get there — at a glance Keep improving Enhancing ways of Keep focus on smart Continue loo
Slide 12: Our Strategy at a Glance
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Our Strategy at a Glance Consumer first Most efficient & promising ways to market 1 Consumer centric decision making with enhanced Smart expansion in core formats to profitability to loyalty (as the key data sourc
Slide 13: Completion of Dixy Integration
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Completion of Dixy Integration The process of Dixy business integration into the Company’s structure was successfully completed in 2022 Key integration achievements • Aligning commercial conditions for both chains
Slide 14: Sustainability Strategic Framework
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Sustainability Strategic Framework To Become #1 Retailer with Purpose in Russia Ambitions 1. 2. 3. 4. 5. Leader Positive impact 100% Improvement of Employer #1 in environmental on the quality responsible health an
Slide 15: 2025 Sustainability Commitments
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix 2025 Sustainability Commitments Sustainable Health and 1 Environmental 2 sourcing 3 Employees 4 Communities 5 well-being stewardship 50% 100% 70% 10% Healthy Private labels and own production packaging be recyclab
Slide 16: Magnit Today
Magnit Today Magnit Umbrella Brand • Convenience Store • Supermarket • Drogerie Discounter Store Format Summary Other Small Formats and Pilots • Dixy Convenience Store • Launch of E- commerce • Own Production & Private Label • Logistics System • Employees Shareholder Structure
Slide 17: Magnit Umbrella Brand — Consumer Missions and Formats
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Umbrella Brand — Consumer Missions and Formats Everything that Core offline formats incl. pharmacies in grocery and drogerie stores New promising ventures matters is close to you Focus Near home Family Extr
Slide 18: Magnit Convenience Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Convenience Store 01 A convenient and affordable store for everyday shopping 3D-tour Size of the Store. sq. m Overview Total size, 478 Routine shopping Food for tonight / now Selling space, 348 Minor stock-
Slide 19: Magnit Convenience Store Key Operating Statistics
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Convenience Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 6,062 Leased 7.6% 85% leased Increase YoY 15% owned 3-4 years CAPEX th RUB Average ticket Number of
Slide 20: Magnit Supermarket
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Supermarket 01 Comfortable and affordable store for everyday and major shopping 3D-tour Size of the Store. sq. m Overview Total size, 4,307 Major shopping Special occasion Selling space, 1,997 Routine shopp
Slide 21: Magnit Supermarket Key Operating Statistics
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Supermarket 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 984 Leased 5.0% 48% leased 52% owned Increase YoY 6-7 years Average ticket Number of tickets LTM - sales d
Slide 22: Magnit Drogerie Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Drogerie Store 01 Within walking distance to buy beauty and health products Magnit Cosmetic is #1 Health and Beauty Specialist retailer in Russia 3D-tour by sales, number of stores and selling space Size of
Slide 23: Magnit Drogerie Store Key Operating Statistics
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Drogerie Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 1,678 4.6% Leased 92% leased 8% owned Increase YoY 2-3 years CAPEX th RUB sq. m of selling space Averag
Slide 24: My Price Soft Discounter
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix My Price Soft Discounter A low price no frills store with nice atmosphere offering Target audience limited assortment satisfying main needs Rational price-sensitive consumers, retirees, families with low income As
Slide 25: Other Small Formats and Pilots
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Appendix Other Small Formats and Pilots City Pharmacy Convenience Magnit Go Small store offering ready-to-go / ready-to-eat products as well as basic grocery and non-food Pharmaceutical & health care products at a
Slide 26: Dixy Convenience Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Dixy Convenience Store A convenient and affordable store for everyday shopping Key operating statistics Selling space, thousand sq. m 719 Size of the Store, sq. m 92% leased Total size, 562 8% owned Selling space,
Slide 27: Roll-Out of E-commerce Across All Missions
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Roll-Out of E-commerce Across All Missions Missions Magnit Own Partners Express Delivery Express (30-60 mins) Casual small purchase Regular Stock-up (2 hours+) Big ticket purchase E- E-Pharma Pharma Current needs
Slide 28: Online Delivery Has Good Traction
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Online Delivery Has Good Traction ~69,300 31 avg. # of orders per day dark stores launched 1,401 506 avg. ticket across all online services1 cities in 66 regions served >87,000 SKUs available across all services 7
Slide 29: Private Label, Own Production & Direct Import as Differentiation Pillars
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Private Label, Own Production & Direct Import as Differentiation Pillars Private Label Own production Direct import Improve own brand portfolio to support to provide exclusive goods with better quality and price d
Slide 30: Development of Own Production in 2022
Development of own production in 2022 Utilisation of the Company's own production capacity rose to 64% Magnit plans to increase the supply of Russian vegetables of the borscht set by 25% in the new agricultural season 2023- 2024 In September 2022 the Company launched own coffee production facility i
Slide 31: Suppliers
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Suppliers Suppliers Direct Import 1,400 Federal Suppliers 6.5% International Direct Import (Annual Average) 24% 5,900 76% Domestic Suppliers Private Label 20% Share of Revenue 4,500 Local Suppliers Source: Company
Slide 32: Logistics System
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Logistics System North North Central Volga Southern Urals West Siberian Caucasus Total Centralization Ratio 4Q 2022 92% Distribution Delivered from DC Centers 14 10 8 4 4 3 1 44 8% 649 Direct supplies 470 1 Nation
Slide 33: Employees
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Appendix Employees 361 thousand Headcount of Employees 39 Distribution 293 8 Regional In-store branches 16 Head Office 5 Other Dixy Super- Drogerie Convenience formats markets Stores Stores Production & other 2 2
Slide 34: Shareholder Structure
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Shareholder Structure Information on persons who hold, dispose of votes accounted for and/or are beneficiaries of PJSC “Magnit” shares1 3,7% JSC Tander2 0,3% Management3 Marathon Group 29,2% Free-float4 66,8% 1. A
Slide 35: Operating and Financial Results
Operating and Financial Results Quarterly Operating Highlights • Summary Profit & Loss Revenue & Costs • Gross Margin & EBITDA • Balance Sheet Debt Portfolio • Working Capital • CAPEX Analysis • Free Cash Flow
Slide 36: Quarterly Operating Highlights
Russian Market Overview Strategy Magnit Today 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 LTM - sales density*, th. RUB/sq.m/year Net retail sales YoY growth, % Number
Slide 37: Summary Profit & Loss
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Summary Profit & Loss RUB mln IAS 17 IFRS 16 2021 2022 YoY Growth 2021 2022 YoY Growth Net sales 1,856,079 2,351,996 26.7% 1,856,079 2,351,996 26.7% Cost of sales -1,421,306 -1,816,509 27.8% -1,421,280 -1,814,994
Slide 38: Revenue & Costs
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Revenue & Costs Revenue SG&A Expense Structure Dynamics, YoY growth, % % % 2,352.0 of sales of SG&A RUB bln 26.7% RUB bln 1,856.1 Total 494.3 21.0% 100.0% Staff costs 199.6 8.5% 40.4% Rent 99.2 4.2% 20.1% 2021 202
Slide 39: Gross Margin & EBITDA
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Gross Margin & EBITDA IAS 17 IFRS 16 Gross -66 b.p. Margin Bridge, 23,5% 23,4% 22,8% As % 22,8% of revenue Transport YoY decrease Trading margin -11 b.p. 2020 2021 2022 2022 10,9% EBITDA -35 b.p. Margin Bridge, 7,
Slide 40: Debt Portfolio
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Debt Portfolio Debt portfolio maturity* RUB bln 420.3 Low Currency Risk Debt Level Dynamics, No loans denominated in foreign currency RUB bln Short-term debt 134.2 867.1 Long-term debt Bonds 30% 726.7 Low Interest
Slide 41: CAPEX Analysis
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix CAPEX Analysis 2022 2021 RUB mln RUB mln Total 48,773 66,900 Construction in progress and buildings 13,052 27,089 26.8% 40.5% 21,552 Machinery and 25,694 equipment 32.2% 52.7% Other 10,021 assets 20.5% Land 18,251
Slide 42: Appendix
Appendix Russian Macro Environment • Russian Food Retail Market Potential • Top-10 Russian Food Retailers • Convenience Store • Supermarket Drogerie store • Quarterly Operating Data Summary
Slide 43: Russian Macro Environment
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Russian Macro Environment Return to parent slide Real GDP in 4Q 2022 decreased y-o-y due to the Inflation slowed down in 4Q 2022 but remains Real disposable incomes rose in 4Q 2022 after 1 2 3 decline of economic
Slide 44: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Russian Food Retail Market Potential Return to parent slide 1 Market Share, % 2 Grocery retail market, 3 Modern VS Traditional 4 Share of TOP-5 retail chains, % USD bn Retail 100% China 1 435 Traditional retail Mo
Slide 45: Top-10 Russian Food Retailers
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Top-10 Russian Food Retailers Return to parent slide X5 13.2% Magnit 12.8% Mercury 5.6% 40.9% Retail Lenta 2.2% 35.7% Share of TOP-10 Svetofor 1.9% Auchan 1.2% Share of TOP-5 Russian food retailers Vkusvill 1.1% O
Slide 46: Magnit Convenience Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Convenience Store Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2020 2021 2022 YoY growth, % YoY growth, % 1 2 3 4 1 2 3 4 1
Slide 47: Magnit Supermarket
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Supermarket Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2020 2021 2022 YoY growth, % YoY growth, % Q 1 2 3 4 1 2 3 4 1 2 3
Slide 48: Magnit Drogerie Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Magnit Drogerie Store Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2020 2021 2022 1 2 3 4 1 2 3 4 1 2 3 4 YoY growth, % YoY growth,
Slide 49: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Quarterly Operating Data Summary RUB bln 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 SALES TOTAL 407.2 1,553.8 397.9 424.3 489.3 544.6 1,856.1 547.7 588.6 594.4
Slide 50: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Quarterly Operating Data Summary 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 2022 LFL sales growth 7.5% 7.4% 4.1% 5.2% 8.6% 9.9% 7.0% 12.0% 13.1% 13.8% 10.0% 12.1% Magni
Slide 51: Contact Information
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Contact Information Magnit Investor Relations Team magnitIR@magnit.ru magnit.com/en 15/2 Solnechnaya Street, Krasnodar, 350072, Russian Federation