Slide 1: M.Video – Eldorado Group FY 2018 Audited IFRS Results
M.Video – Eldorado Group FY 2018 Audited IFRS Results March 21, 2019
Slide 2: Content & liability disclaimer
Content & liability disclaimer The information contained in this presentation or enclosed herewith is provided and intended for informational purposes only and should not be relied on for any investment decisions. The information provided in the presentation includes assumptions and financial inform
Slide 3: FY 2018 key highlights
FY 2018 key highlights The Company demonstrated sound results in 2018 on the back of improved efficiency and successful integration M.Video – Eldorado Group delivered record operating and financial results. 1 The Group entered TOP-10 public CE Retailers rating by Revenue and TOP-3 by EBITDA Margin 2
Slide 4: Group and M.Video outpaced the market
Group and M.Video outpaced the market Eldorado showed double-digit growth in 2018 26.3% Old panel 25.9% Key Market Highlights in 2018 25.6% New panel 25.3% 1. The Group outperformed the market and took +0.3 pp market share Market Share, % 2. M.Video led the growth Sales Growth 3. Eldorado delivered
Slide 5: Group showed solid progress in Digital continuing to outperform the market
Group showed solid progress in Digital continuing to outperform the market Digital amounted to 55% of the total CE market in Russia Group grew twice faster than the Digital market M.Video increased Digital share in its sales to 29% by +2 pp YoY Eldorado strengthened Digital categories and gr
Slide 6: M.Video continues to lead, Eldorado delivers record like-for-like results
M.Video continues to lead, Eldorado delivers record like- for-like results Both brands demonstrated double-digit Sales and LFL growth driven by number of checks and average check Average check grew thanks to efficient mix and number of units sold Number of checks grew due to increased traffic
Slide 7: Both brands deliver robust online sales growth
Both brands deliver robust online sales growth FY 2018 Group Online Sales (w. VAT), RUB bn 2018 OBS Highlights +x% - YoY - Share in total sales 1. M.Video delivered sound online sales growth: +45.7% YoY, the OBS share in Sales gained +4 pp 19% 18% 15% 17% 18% due to significant customer journey opti
Slide 8: Group increased its footprint by record 102 stores in 2018
Group increased its footprint by record 102 stores in 2018 Group substantially strengthened its position in Moscow (+22), North (+25) and Urals (+20) 46 out of 56 x-MediaMarkt stores were rebranded into new M.Video and Eldorado, 10 more coming in 2019 5 new digital m_mobile standalone stores w
Slide 9: Dual brand strategy developed
Dual brand strategy developed Target Audience Willingness to pay Willingness to save Role Trendsetting Attacking Center of competence Place of best deals Unique Selling Points Technology expert Simple, convenient Best brands Best value for money m_mobile 2018 Key Developments Restart of Eldorado m_R
Slide 10: m_mobile as a revolutionary way of selling Digital
m_mobile as a revolutionary way of selling Digital brought 73 bn turnover in 2018 Shop-in-Shops and special digital zones in all M.Video stores 5 pilot standalone m_mobile stores were opened in 2018 73 bn All-formats Turnover 2 Every nd mobile device is accompanied with a service product1 Every
Slide 11: m_RTD tablet-based sales tool
m_RTD is a tablet-based sales tool for shop assistants in M.Video stores RTD makes shopping experience personalized by offering products from ‘unlimited shelf’ and matching a customer profile with the range of discounts and promos available 475 M.Video stores connected to RTD (2018) 13% Execution
Slide 12: m_credit is a broker-based project benefiting Group credit sales
m_credit is a broker-based project benefiting Group credit sales Launched in 2H 2017 in M.Video, m_credit was later transmitted to Eldorado brand in 2018 The project is aimed at making consumer loans more accessible, which is reflected in >80% approval rate 11 m_credit bank partners 19.8% Credit
Slide 13: Eldorado restart and Eldo 600 launch within new CVP
Eldorado restart and Eldo 600 launch within new CVP Newly opened Eldorado stores will be designed according to Restart concept or Eldo 600 format Existing Eldorado stores are not supposed to be redesigned Eldorado Restart Eldo 600 Closer to home Warehouse-alike Convenience focus store format Les
Slide 14: FY 2018 Group audited IFRS results: Revenue and Gross Profit
FY 2018 Group audited IFRS results: Revenue and Gross Profit Revenue (+62%) and Gross Profit (+69%) showed grand double-digit growth YoY, mainly due to Eldorado acquisition Gross Margin increased by 1 pp, due to the mix and unified supply chain management Group Revenue (net of VAT), RUB bn Group
Slide 15: FY 2018 Group audited IFRS results: EBITDA and Net Income
FY 2018 Group audited IFRS results: EBITDA and Net Income EBITDA (+76.0%) and Net Income (+20.3%) showed solid growth YoY EBITDA Margin grew to record 6.5% Net Margin dropped by 0.9 pp due to finance costs related to debt raised for acquisitions Group EBITDA, RUB bn Group Net Income, RUB bn Au
Slide 16: FY 2018 Group pro-forma results: Revenue and Gross Profit
FY 2018 Group pro-forma results: Revenue and Gross Profit Both brands demonstrated double-digit growth in pro-forma view: M.Video +17.8%, Eldorado +11.7% Growth was driven mainly by remarkable LFL growth +15.7% Group Revenue (net of VAT), RUB bn Pro-forma results 352 519 304 720 +17.8 % 233 562
Slide 17: FY 2018 Group pro-forma results: Gross Profit and EBITDA
FY 2018 Group pro-forma results: Gross Profit and EBITDA EBITDA substantially increased by +39.2% in pro-forma view Gross Margin gained +0.8 pp, reflected in EBITDA Margin improvement by +1.0 pp Group Gross Profit, RUB bn Group EBITDA, RUB bn Pro-forma results Pro-forma results 6.0% 24.6% 23.8%
Slide 18: Group Pro-forma EBITDA Margin improved by 1 pp
Group Pro-forma EBITDA Margin improved by 1 pp mainly due to procurement synergies and m_credit proceeds EBITDA Margin gained +1.0 pp YoY due to increased efficiency of both brands Gross Margin increased by +0.8 pp YoY due to the combined supply chain Rent stayed flat YoY as % of Revenue, desp
Slide 19: Eldorado integration completed
Eldorado integration completed First RUB 6 bn synergies exploited in 2018 1 Commerce 2 Supply Chain Optimized assortment mix Optimized single distribution network Synchronized procurement Higher DCs and transport utilization Economy-of-scale effect 53 cities with unified delivery service
Slide 20: Group managed to exploit more synergies in 2018; increased forecast for 2019-2020
Group managed to exploit more synergies in 2018 Increased forecast for 2019-2020 The Group delivered RUB 6 bn synergies in 2018 One-off RUB 1.2 bn expenses related to MediaMarkt local office merger Combined procurement and SG&A equally driven cost savings for the Group Group’s synergies in 201
Slide 21: M.Video – Eldorado Group adheres to its 2020+ strategy
M.Video – Eldorado Group adheres to its 2020+ strategy ONE COMPANY ONE OPERATING BUSINESS MODEL 2020+ Strategy TWO BRANDS 1 Business Model 2 EBITDA Margin >6% 3 Market Share 2018 2019 2020+ Centralization of operations Sustainable EBITDA margin >6% CE market share >30% keeping 2 brands The informati
Slide 22: M.Video-Eldorado Group financial forecasts
M.Video-Eldorado Group financial forecasts The Group expects the combined Net Revenue to be 500+ RUB bn by 2022 The combined EBITDA margin is to exceed 6% starting from 2019 Revenue (net of VAT), RUB bn EBITDA, RUB bn Pro-forma CAGR’18-22F: >7% Pro-forma CAGR’18-22F: >13% 1100+ 6%+ 6% 941 1 040+
Slide 23: Group's debt portfolio forecast
Group’s debt portfolio forecast Total Debt/EBITDA is expected to stay at robust 0.7 level in 2022 Net Debt/EBITDA is to reach minimum 0.1x level in 2022 Starting from 2020, cash balance forecast includes potential dividend pay-out ratio 60%, subject to GSM decision Total Debt & Total Debt / EB
Slide 24: Biggest Revenue YoY growth among Top-10 largest public CE retail companies
The group demonstrated the biggest Revenue YoY growth among Top-10 largest public CE retail companies Revenue, USD million +X% - YoY growth, % +15.7% +3.6% +6.1% +8.5% +5.0% -7.6% +5.6% +1.7% +4.3% +1.7% 46 300 2018 25 400 №10 14 200 14 400 8 800 9 800 5 600 6 200 6 400 7 700 K's Edion Bic Camera FN
Slide 25: The group is in the TOP-3 list by EBITDA Margin
The group is in the TOP-3 list by EBITDA Margin, showing the largest growth among the peers EBITDA Margin, % +X pp - YoY growth, pp 2018 №3 -0.4pp -2.0pp +0.3pp -0.0pp +0.4pp -0.1pp +0.4pp +1.0pp +0.2pp -0.6pp 6.2% 6.4% 6.0% 5.3% 5.3% 4.0% 3.7% 2.9% 2.5% 0.2% Gome Yamada Denki Ceconomy Edion Bic Cam
Slide 26: Appendix I. FY 2018 Audited Consolidated IFRS Reporting
Appendix I. M.Video – Eldorado Group FY 2018 Audited Consolidated IFRS Reporting 26
Slide 27: Appendix I. Group Audited Consolidated IFRS Statement of Profit & Loss
Appendix I. Group Audited Consolidated IFRS Statement of Profit & Loss in millions of Russian Rubles (VAT excl.) 2018 2017 Change YoY Revenue 321,102 198,197 +62.0% Gross profit 78,639 46,527 +69.0% Gross margin, % 24.5% 23.5% +1.0pp Selling, general and administrative expenses 69,234 40,754 +69.9%
Slide 28: Appendix I. Group Audited Consolidated IFRS SG&A Expense Breakdown
Appendix I. Group Audited Consolidated IFRS SG&A Expense Breakdown in millions of Russian Rubles (VAT excl.) 2018 2017 Payroll and related taxes 21 779 12 538 as % of Revenue 6.8% 6.3% Lease expenses 14 926 8 885 as % of Revenue 4.6% 4.5% Advertising & promotional expenses 6 054 3 827 as % of Revenu
Slide 29: Appendix I. Group Audited Consolidated IFRS Statement of Financial Position
Appendix I. Group Audited Consolidated IFRS Statement of Financial Position 31.12.2018 31.12.2017 Change RUBm RUBm RUBm % Assets Non-current Assets 98 481 23 663 74 818 316.2% Fixed assets 20 734 7 936 12 798 161.3% Intangible assets 68 767 7 999 60 768 >500% Other non-current 8 980 7 728 1 252 16.2
Slide 30: Appendix I. Group Audited Consolidated IFRS Statement of Cash Flow
Appendix I. Group Audited Consolidated IFRS Statement of Cash Flow 2018 2017 Change YoY RUBm RUBm RUBm % Operating CF Operating cash flows before movements in WC 22 342 11 816 10 526 89.1% Inventory change (32 114) (7 118) (24 996) -351.2% Trade payables 36 635 11 413 25 222 221.0% Others 553 (8 389
Slide 31: Appendix II. FY 2018 Pro-forma Combined Reporting
Appendix II. M.Video – Eldorado Group FY 2018 Pro-forma Combined Reporting (based on management accounts, unaudited) 31
Slide 32: Appendix II. Group Pro-Forma Statement of Profit & Loss
Appendix II. Group Pro-Forma Statement of Profit & Loss in millions of Russian Rubles (VAT excl.) 2018 2017 Change YoY Revenue 352,519 304,720 +15.7% Gross profit 86,709 72,599 +19.4% Gross margin, % 24.6% 23.8% +0.8pp EBITDA 21,274 15,282 +39.2% EBITDA Margin, % 6.0% 5.0% +1.0pp Note: Eldorado resu
Slide 33: Appendix II. Group Pro-Forma SG&A Expense Breakdown
Appendix II. Group Pro-Forma SG&A Expense Breakdown in millions of Russian Rubles (VAT excl.) 2018 2017 Payroll and related taxes 24 914 21 029 as % of Revenue 7.1% 6.9% Lease expenses 19 020 16 526 as % of Revenue 5.4% 5.4% Advertising & promotional expenses 6 915 6 281 as % of Revenue 2.0% 2.1% Ma
Slide 34: Contact information
Contact information PJSC “M.video” Address: 105066, Russia, Moscow Nizhnaya Krasnoselskaya Str., 40/12 bld 20 Tel: +7 495 644 28 48, ext. 1425 E-mail: ir@mvideo.ru Corporate web-site: invest.mvideo.ru Listing: The Moscow Stock Exchange Ticker: MVID For investors’ requests, please, contact: Ekaterina