Magnit · RUS:MGNT
Magnit — Investor Presentation (October 2017)
25 slides from Magnit's investor presentation, Oct 20, 2017
Slide 1: Investor Presentation
INVESTOR PRESENTATION 9M 2017 OPERATIONAL RESULTS published on October 20, 2017
Slide 2: Magnit at a Glance
Magnit at a Glance Magnit at a Glance As of September 30, 2017 2 664 15 697 Total Number 5 563 5 899 36 Cities & Towns Selling Space Trucks DCs of Stores (thous.sq.m.) As of September 30, 2017 №2 $19 bn 8 % Market Share in Russian Retailer in Europe Capitalization Grocery Sector in Market Capitaliza
Slide 3: Key Metrics
Magnit at a Glance Key Metrics Figures for 9M 2017 Total Revenue 9M 2017 Revenue Growth Y-o-Y P = 841bn 6,44 % Net EBITDA Net Debt/ Margin Margin LTM EBITDA 3,29% 8,26% 1,3 as of 1H 2017 Guidance for FY 2017 New Convenience Stores(Gross) New Convenience Stores(Net) New Hypermarkets(Gross) New Hyperm
Slide 4: Mid-term Strategy
Magnit at a Glance Mid-term Strategy Organic Space Growth Multi-format Geographic Density of Store Store Growth Scope Coverage Vertical Integration Efficiency Production Agricultural Private Label Cost New Centralization Facilities Management Technologies 4
Slide 5: Russian Food Retail Market
Magnit at a Glance Russian Food Retail Market trillion RUB 13,7 69 % Market Modern Size Retail FY 2016 Penetration FY 2016 Market Composition by Format Non-Modern 31% 69% Modern Open Markets 7% Top-7 Retail Chains 26% Traditional Trade 24% Other chains 28% Modern Non-Chain Stores 15% Source: INFOLin
Slide 6: Magnit vs Peers
Magnit at a Glance Magnit vs Peers Selling Space Number Revenue Market Cap Market Share thous. sq.m., of Stores, eop 2016 RUB bn, eop 2016 US$ bn, eop 2016 %, eop 2016 eop 2016 Magnit 14 059 5 068 1 074,8 20,9 8 X5 9 187 4 302 1 033,7 8,8 8 Dixy 2 802 953 311,2 0,6 2 Lenta 240 1 146 306,4 4,0 2 Auch
Slide 7: Geographical Coverage
Operational Overview Geographical Coverage 2 664 Cities & Towns 7 Federal Regions North Southern Central Volga North Urals Siberia Caucasus West 373 524 Convenience Stores 1 790 3 360 3 394 1 192 1 110 11 743 9 Hypermarkets 9 68 39 66 15 30 236 Magnit Family 10 51 37 54 16 16 12 196 158 Drogerie Sto
Slide 8: Logistics System
Operational Overview Logistics System 36 1 605 15 697 5 899 Trucks DCs thous.sq.m. Total Number Warehousing Space of Stores 4 483 Centralization Ratio Central 9 477 % 4 988 Volga 10 469 9M2017 Future Targets Delivered from DC 2 551 87 Southern 8 308 88 1 431 Delivered from supplier Urals 3 141 13 12
Slide 9: Suppliers
Operational Overview Suppliers 5 800 Domestic Suppliers 1 200 Federal Suppliers 4 600 Local Suppliers 55% 45% Assortment Source: Company, as of September 30, 2017 9
Slide 10: Direct Import Private Label
Operational Overview Direct Import 9 % 757 International Open Direct Import Contracts (Annual Average) Private Label 597 10 % 82% PL Share Food SKUs of Revenue Items M Source: Company, Direct Import – as of December 31, 2016; Private Label – as of September 30, 2017 10
Slide 11: Employees
Operational Overview Employees 289 366 Employees 211 743 37 634 24 093 Regional 13 073 2 823 Head Office Other In-store Distribution Branches 1000 employees P 33 475 = Average Monthly Salary * Source: Company, as of September 30, 2017 *as of June 30, 2017 11
Slide 12: Competitive Attributes
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 P4 000-9 500 = Monthly Family Food Budget Overlap “Good” 43-45 % of Family Can
Slide 13: Convenience Store
Operational Overview Convenience Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 465 P 247,7 sq.m. Total = 327 Selling Space sq.m. $4,2 3 years Traffic tickets/sq.m./day If Owned Sales Mix 89 % Food 2,5 4-6 years Sales Density 11% Non-fo
Slide 14: Hypermarket
Operational Overview Hypermarket Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 6 476 P 580,6 sq.m. Total = 6-9 years 2 908 Selling Space sq.m. $10,0 Traffic Cost of New Store S: up to 3 000 tickets/sq.m./day per sq.m. of Total Space, thousand RUB M: 3
Slide 15: Magnit Family
Operational Overview Magnit Family Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 2 113 P 439,6 sq.m. Total = 6-9 years 1 101 Selling Space sq.m. $7,5 Traffic Cost of New Store tickets/sq.m./day per sq.m. of Total Space, thousand RUB Sales Mix 1,7 Owne
Slide 16: Drogerie Store
Operational Overview Drogerie Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 291 P 305,9 sq.m. Total = 233 Selling Space sq.m. $5,2 3 years Traffic tickets/sq.m./day If Owned Sales Mix 0,9 4-6 years 100% Non-food Sales Density sales/sq.
Slide 17: Format Summary
Operational Overview Format Summary Size Average Traffic Density Sales LFL 9M2017- Store Owner- Payback Cost of New Time of the Store Ticket Tickets/ Sales/ Mix 9M2016 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 18: Summary P&L
Financial Overview Summary P&L 1H2016 / 1H2017 RUB MN 1H2016 1H2017 Y-o-Y Growth Net sales 521,527.57 555,024.83 6.4% Cost of sales (379,464.58) (402,478.35) 6.1% Gross profit 142,062.99 152,546.49 7.4% Gross margin, % 27.24% 27.48% SG&A (92,661.97) (106,643.26) 15.1% Other income, net 2,138.69 2,78
Slide 19: Revenue & Costs
Financial Overview Revenue & Costs Revenue Dynamics Net Income Dynamics RUB bn Sales Growth, RUB Sales Growth, RUB RUB bn +14,7% +6,4% +3,3% -20,5% 25 26 522 555 21 455 LFL LFL -0,5% -3,1% 1H2015 1H2016 1H2017 1H2015 1H2016 1H2017 SG&A Expense Structure 1H 2017 Margin Dynamics Revenue — 555 RUB bn i
Slide 20: Gross Margin Bridge EBITDA Margin Bridge
Financial Overview Gross Margin Bridge % of Sales 33 -70 b.p. +24 b.p. 31 27,94 27,24 -0,21 29 -0,76 0,06 0,45 27,48 27 25 23 21 19 17 15 GM Trading Margin Transport GM Trading Margin Transport GM 1H2015 1H2016 1H2017 EBITDA Margin Bridge % of Sales -80 b.p. -110 b.p. 12 10,69 -0,70 0,43 -0,75 0,09
Slide 21: Free Cash Flow
Financial Overview Free Cash Flow RUB mn 1H 2016 51 182 Working Capital Analysis -16 964 -6 796 -3 903 -21 018 Average Days Payable to Suppliers is 23 519 35 Days. -127 2 374 -20 982 15 102 -3 505 Adjusted Change in Net Interest Taxes OCF Capex Other Cash FCF Payment of Other Cash CF Inventory Manag
Slide 22: Balance Sheet
Financial Overview Balance Sheet RUB MN 2015 2016 1H2017 ASSETS Property plant and equipment 265,995.94 289,945.35 300,106.95 Other non-current assets 6,380.79 6,080.58 6,346.18 Cash and cash equivalents 8,390.90 16,559.27 5,607.38 Inventories 116,471.59 134,915.71 150,360.84 Trade and other receiva
Slide 23: Capex Figures
Financial Overview Capex Figures Buildings: Complete & under Machinery & Equipment Other Assets Land Construction FY 20161 31 691 16 326 373 1 455 RUB 50 bn RUB 500 mn 1CAPEX for 1H2017 amounts to RUB 26,549 mn Source: Company’s calculations based on IFRS accounts for 2016 23
Slide 24: 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 127 606 144 558 14,0 an Impeccable Credit History 138 951 % 111 047 32 976 12,0 Collaboration with 104 228 95 837 10,0 the Largest
Slide 25: Contact Information
Contact Information Contact Information Timothy Post Head of Investor Relations post@ir.magnit.com http://ir.magnit.com 15/2 Solnechnaya Street Krasnodar, 350072 Russian Federation 25