Fix Price PJSC · RUS:FIXR
Fix Price PJSC — Fix Price — Investor Presentation (March 2021)
48 slides from Fix Price PJSC's investor presentation, March 2021
Slide 1: The Fastest Growing Value Retailer Globally
THE FASTEST GROWING VALUE RETAILER GLOBALLY March 2021
Slide 2: Disclaimer
DISCLAIMER IMPORTANT: Please read the following before continuing. The following applies to this such as “plans”, “targets”, “aims”, “believes”, “expects”, “anticipates”, “intends”, “estimates”, placed on any of the industry, market or competitive position data contained in this document, which has
Slide 3: Fastest Growing Value Retailer Globally
Fastest Growing Value Retailer Globally 3
Slide 4: The Fastest Growing Value Retailer Globally
THE FASTEST GROWING VALUE RETAILER GLOBALLY (1) OUR PROPOSITION OUR NUMBERS OUR AMBITION 4,200+ $2.6bn stores 2020 Revenue 2.4x 19%+ Consistently low prices Treasure hunt & essentials 93% $509mm 2020-25E variety value retail market increase(3) 2020-25E variety value retail market CAGR(3) Market shar
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 and beyond) Phase I Phase II Phase III Phase IV Phase V Format development Network expansion Multi-price point evolution High quality growth Cementing leadersh
Slide 6: Excellent LFL Growth and Profitability
EXCELLENT LFL GROWTH AND PROFITABILITY 16 CONSECUTIVE QUARTERS OF DOUBLE-DIGIT LFL SALES GROWTH(1)… …WHILST EXPANDING PROFITABILITY Average: Adjusted EBITDA(2) margin development IFRS 16 IAS 17(3) 19.0% COVID-19 lock-down 30.1% 19.4% 27.1% 26.6% 19.0% 4.7% 5.2% 13.1% Average: 20.3% 20.3% 20.6% 18.5%
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 Fastest Growing Value Retailer Globally 4
Slide 8: Leader in a Large and Growing Market
LEADER IN A LARGE AND GROWING MARKET 1 8
Slide 9: Value Retail Is Proven Globally
VALUE RETAIL IS PROVEN GLOBALLY FIX PRICE IS AMONGST THE GLOBAL SECTOR LEADERS(1) Revenue in USDbn(2) US USDbn(2) USDbn(2) Revenue 2.8 Revenue 4.5 Revenue 2.6 # stores 1,314 # stores 1,053 # stores 4,200+ ~111mm(3) ~134mm(3) ~249mm(4) (5) USDbn(2) USDbn(2) USDbn(2) USDbn(2) Revenue 31.3 Revenue 1.7
Slide 10: Variety Value Retail One of the Fastest Growing Segments of Russian Retail Market
THE VARIETY VALUE RETAIL IS ONE OF THE FASTEST GROWING SEGMENTS OF THE RUSSIAN RETAIL MARKET SUSTAINABLE GROWTH OF THE ADDRESABLE MARKET(1) RAPID EXPANSION OF THE VARIETY VALUE RETAIL MARKET Addressable market for variety value retail, incl. VAT, RUB bn Variety value retail market, incl. VAT, RUB bn
Slide 11: Fix Price = Variety Value Retail in Russia
FIX PRICE = VARIETY VALUE RETAIL IN RUSSIA FAVOURABLE CONDITIONS FOR VARIETY VALUE RETAIL IN THE ADDRESSABLE MARKET STRONG INCUMBENT POSITION 93% Market share(5) captured by Fix Price in Russia Number of stores Revenue Population in Russia and other core Stores CAGR Year of 218mm+ countries of opera
Slide 12: Unique Customer Value Proposition
UNIQUE CUSTOMER VALUE PROPOSITION 2
Slide 13: Deep Value Across a Diverse Product Offering
DEEP VALUE ACROSS A DIVERSE PRODUCT OFFERING UNCOMPROMISING EDLPs(1)… …CONSTANTLY CHANGING ASSORTMENT… $1.0 / ₽77 $1.3 / ₽99 Several anchor price $0.7 / ₽55 $2.0 / ₽149 points(2) ~65% of assortment is rotated c.90% $0.7 / ₽50 $2.7 / ₽199 of our products 35% is represented by consumables/regular segm
Slide 14: Driving Constant Newness in Assortment
DRIVING CONSTANT NEWNESS IN ASSORTMENT WHAT? HOW? 40-60 PRODUCTS LAUNCHED EVERY WEEK 8 SEASONAL DEDICATED TRACKING OF GLOBAL TRENDS DRIVING TREASURE HUNT EXPERIENCE COLLECTIONS Week 1 Week 2 Week 3 Week 4 LEVERAGING LONG-STANDING CONTINUOUS PARTNERSHIPS WITH Accessories BROWSING SUPPLIERS Household
Slide 15: 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 16: Growing Loyalty Programme with Attractive Benefits
GROWING LOYALTY PROGRAMME WITH ATTRACTIVE BENEFITS HOW IT WORKS BENEFITS FOR CUSTOMERS BENEFITS FOR US 1 point = RUB 1 when spent Get the maximum value Data and feedback of the active up to 10% through customised offers(1) of purchase amount is returned to the card in form of points client base Part
Slide 17: Introduction to Our Stores: Virtual Store
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 12
Slide 18: Operational Excellence
OPERATIONAL EXCELLENCE 3 18
Slide 19: 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 LOGISTICS Direct sourcing backed by Across all 4,200+ stores(1) Fueling expansion at scale and Platform scaled for growth sophisticated algorithms d
Slide 20: 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 SUPPLIER BASE EFFECTIVELY MANAGING FX EXPOSURE HIGHLY EFFICIENT TEAM ORGANISATION Average 63 65 72 Department head • Top-10 suppliers account for 39%
Slide 21: 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 INCREASING SHARE OF LOCAL SUPPLIERS(1) 2014 Fix Price: Supplier: price setter price taker Known to supplier Fixed price offered (along with F
Slide 22: 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 23: Proven Store Rollout Process
Sourcing Standardisation Property 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 Predominantly mid-term ₽4M Size / Traffic Revenue / (<3 yea
Slide 24: Efficient Property Management Framework
Sourcing Standardisation Property 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 processes 100% Fix Price proactively negotiates with prope
Slide 25: Logistics Infrastructure Scaled for Growth
Sourcing Standardisation Property Management Logistics Technology LOGISTICS INFRASTRUCTURE SCALED FOR GROWTH STEADY GROWTH OF DISTRIBUTION th. sqm - DC space CENTER SPACE… owned leased St Petersburg th. sqm, eop 14 th. sqm • Expected gradual increase of DC space 195 STRATEGICALLY 5 Moscow (x2) to su
Slide 26: State of the Art IT Infrastructure
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 27: Substantial Growth Potential
SUBSTANTIAL GROWTH POTENTIAL 4
Slide 28: Up to 15 Years of Store Runway Potential Ahead
UP TO 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) ~15,500(7) Ability
Slide 29: Tested Levers to Drive Repeat LFL Growth
TESTED LEVERS TO DRIVE REPEAT LFL GROWTH 16 CONSECUTIVE QUARTERS OF DOUBLE-DIGIT LFL SALES GROWTH(1) Creating Drives desire constant range to visit store COVID-19 “newness” 30.1% lock-down 27.1% 26.6% 20.6% Delivering 20.3% 18.5% 18.8% 20.3% 19.0% 18.3% Drives need 17.0% essential to visit store 16.
Slide 30: Best-in-Class Financial KPIs
BEST-IN-CLASS FINANCIAL KPIS 5 30
Slide 31: Strong Growth, Profitability and Cashflow
STRONG GROWTH, PROFITABILITY AND CASHFLOW 1 RAPID GROWTH AT SCALE 2 STRONG PROFITABILITY # of Stores (EoP) Revenue (RUBbn) IFRS16 Adjusted EBITDA Margin +19% +33% Standardised Asset +0.4pp 4,167 190.1 store portfolio light model 142.9 с. 9 3.2% 19.0% 19.4% Months Store CAPEX 2020 Capex as a 3,512 Pa
Slide 32: Strong Growth Algorithm
1 STRONG GROWTH ALGORITHM STRONG AND CONSISTENT UNIT GROWTH CADENCE > 30% TWO-YEAR STACKED LFL(1)(2) INDUSTRY-LEADING TOP LINE GROWTH Unit development (# of stores as of end of period) LFL development (%) LFL Sales (Current Year) Revenue development (RUBbn) LFL Sales (Prior Year) % of stores % whole
Slide 33: Efficient Cost Optimisation Supporting Strong Profitability
2 EFFICIENT COST OPTIMISATION SUPPORTING STRONG PROFITABILITY ROBUST GROSS MARGIN ADJUSTED EBITDA MARGIN ADJUSTED EBITDA GROWTH Gross margin development (%) Adjusted EBITDA margin development (%) IFRS 16 IAS 17 Adjusted EBITDA development (RUBbn) IFRS 16 IAS 17 35% (IFRS 16) 45% (IAS 17) 39% 36.8 (I
Slide 34: Asset Light Model with Consistent Unit Returns
3 ASSET LIGHT MODEL WITH CONSISTENT UNIT RETURNS LAST THREE YEARS CAPEX(1) CAPEX COMPOSITION CAPEX (RUBm) Key CAPEX components Other CAPEX components CAPEX (% of revenue) 3.9% 2.9% 3.2% New Store Openings CAPEX Refurbishment CAPEX Distribution center CAPEX 0.6% 0.8% 1.2% DC CAPEX IT and Other CAPEX
Slide 35: Tight Control and Continuous Focus on Working Capital
3 TIGHT CONTROL AND CONTINUOUS FOCUS ON WORKING CAPITAL EFFICIENT BUSINESS MODEL RESULTS IN CLOSE TO ZERO ... INDUSTRY LEADING INVENTORY DAYS AND DAYS TRADE NWC(1) AND… PAYABLE LEVELS Net trade working capital development (RUBm) Inventory days(4) (days) and Days payable(5) (days) % of revenue (1.6%)
Slide 36: Superior Cash Flow Generation, Strong Balance Sheet and Shareholder Returns
3 SUPERIOR CASH FLOW GENERATION, STRONG BALANCE SHEET AND CONSISTENT SHAREHOLDER RETURNS FCF DYNAMICS(1) DIVIDENDS DECLARED (RUBm) Lease Payments FCF (Post-Lease Payments) (RUBm) % of revenue 11% 15% 16% Payout ratio(2) 73% 104% 186% 32,644 30,628 13,740 21,631 6,633 11,699 23,110 14,942 2018 2019 2
Slide 37: Strong Management and Corporate Governance
STRONG MANAGEMENT AND CORPORATE GOVERNANCE 6
Slide 38: Management Team with Proven Track Record
MANAGEMENT TEAM WITH PROVEN TRACK RECORD 2007-2009 foundation Subsequent hires 2020 and beyond ZERO ROTATION Dmitry Kirsanov Valery Ryazanov Inna Kondratyeva Oleg Shtainagel Vladimir Pogonin IN SENIOR MANAGEMENT Chief Executive Officer Sales Director Head of Category Management Logistics Director Re
Slide 39: Corporate Governance: Board of Directors
CORPORATE GOVERNANCE: BOARD OF DIRECTORS With effect from the IPO, the Board of Directors will consist of 7 members, 3 of which will be INEDs Sergey Lomakin Artem Khachatryan Dmitry Kirsanov Chairman and Founding Shareholder Founding Shareholder Executive Director Highly experienced Board of Directo
Slide 40: Fix Price ESG Agenda Is Embedded in Company Culture
FIX PRICE ESG AGENDA IS EMBEDDED IN COMPANY CULTURE E ENVIRONMENTAL Minimizing environmental impact 20-35% reduction in electricity consumption(1) ~2.5x reduction in consumption of stretch film(2) Increased offering of healthy lifestyle products ~6.5x less energy consumed at Fix Price’s DC(3) Good D
Slide 41: Undisputed Leader in Value Retail
UNDISPUTED LEADER IN VALUE RETAIL Value retail business model proven globally 33% Revenue Growth(10) 4,200+ ~15,500(3) ~1/4bn addressable Strong financial algorithm 19.4% Fix Price stores(1) population – up to 15 years of Adjusted EBITDA Margin (IFRS 16)(9) ~4,600 roll-out potential ahead c.100% ROI
Slide 42: Appendix
APPENDIX
Slide 43: P&L Summary
P&L SUMMARY IAS 17 IAS 17 IAS 17 IFRS 16 IFRS 16 In millions of Russian rubles 2018 2019 2020 2019 2020 Revenue 108,724 142,880 190,059 Growth, % 34.8% 31.4% 33.0% Cost of sales (74,838) (96,919) (128,544) Gross profit 33,886 45,961 61,515 Gross margin, % 31.2% 32.2% 32.4% SG&A (excl. D&A) (20,037)
Slide 44: Balance Sheet Summary
BALANCE SHEET SUMMARY IAS 17 IFRS 16 IFRS 16 In millions of Russian rubles 31.12.2018 31.12.2019 31.12.2020 ASSETS Non-current Assets 12,071 18,930 25,297 Property, plant and equipment 9,108 10,882 13,308 Right-of-use assets (non-current) – 6,220 8,554 Other non-current assets 2,963 1,828 3,435 Curr
Slide 45: Cash Flow Summary
CASH FLOW SUMMARY IAS 17 IFRS 16 IFRS 16 In millions of Russian rubles 2018 2019 2020 Profit before tax 12,269 17,535 26,310 Cash from operating activities before changes 15,152 28,216 38,338 in working capital Changes in working capital 732 (2,428) (1,548) Net cash generated from operations 15,884
Slide 46: SG&A Breakdown
SG&A BREAKDOWN IAS 17 IFRS 16 IFRS 16 In millions of Russian rubles 2018 2019 2020 Staff costs 9,085 13,361 17,329 % of revenue 8.4% 9.4% 9.1% Amortisation of right-of-use assets -- 6,921 7,618 % of revenue -- 4.8% 4.0% Other depreciation and amortisation 1,476 1,772 2,247 % of revenue 1.4% 1.2% 1.2
Slide 47: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION IAS 17 IFRS 16 IFRS 16 In millions of Russian rubles 2018 2019 2020 Profit for the period 9,128 13,173 17,575 Add: Income tax expense 3,141 4,362 8,735 Add: Interest expense 205 1,040 1,125 Less: Interest income (87) (194) (376) Add: D&A 1,464 8,695 9,865 EBITDA 13,851
Slide 48: Impact of IFRS 16 Standard
IMPACT OF IFRS 16 STANDARD NET INCOME RECONCILIATION SG&A RECONCILIATION In millions of Russian rubles 2019 2020 In millions of Russian rubles 2019 2020 SG&A expense 27,879 34,932 Profit for the period 13,173 17,575 Rent expense and associated non-lease components net of 7,373 8,156 variable lease c