Magnit · RUS:MGNT
Magnit — 2Q 2022 Earnings Presentation
55 slides from Magnit's earnings presentation, Jul 28, 2022
Slide 1: Investor Presentation 2Q 2022 Results
Investor Presentation 2Q 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 26,731 9,258 45 5,412 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 3,963 Cities & Towns Convenience Stores 491 2 621 4 482 4 465 1 900 1 733 1 056 16 748 7 Magnit Federal 19 Regions Superm
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, % 1,808 39.0 26,077 26,731 8,997 9,258 1,510 20,725 21,5
Slide 6: Financial Performance
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Financial Performance Concise Profit & Loss Core 2019 2020 2021 YoY achievements Sales, bn Rub 1,368.7 1,553.8 1,856.1 +19.5% Gross margin, % 22.8 23.5 23.7 +0.1pp Improvement of sales densities SG&A, % (21.3) (20
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 Macro environment provides further scope for consolidation – supportive for strong players Real GDP in 1Q 2022 3.5% -1.8% improved y-o-y and Real food retail sales 1 4 decreased q-o-q due
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: Dixy Acquisition: Integration Plan & Timeline
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Dixy Acquisition: Integration Plan & Timeline Phase 1: Learning & Quick Wins Phase 2: Capturing Value Phase 3: New Organization Until 01 Jan 2022 Until 01 Jan 2023 After 2H’22-1H’23 Timing Phase completed In progr
Slide 14: Sustainability Strategic Framework
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Sustainability Strategic Framework #1 Retailer with Purpose in Russia Ambitions 1. 2. 3. 4. 5. Leader Positive impact 100% Best in class Employer #1 in environmental on the quality responsible corporate in industr
Slide 15: 2025 Sustainability Commitments
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix 2025 Sustainability Commitments Sustainable Health 1 Environment 2 sourcing 3 Employees 4 Communities 5 and wellness 50% 100% 70% 10% Healthy Private labels and own production packaging be recyclable, reusable Res
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, 482 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 5,836 Leased 10.6% 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, 4,329 Major shopping Special occasion Selling space, 1,999 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 934 Leased -1.0% 45% leased 55% owned Increase YoY 6-7 years Average ticket Number of tickets LTM - sales
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 1,649 9.9% Leased 92% leased 8% owned Increase YoY 2-3 years CAPEX th RUB sq. m of selling space Averag
Slide 24: My Price Discounter
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix My Price 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 Assortm
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 Magnit Go Small store offering ready-to-go / ready-to-eat Pharmaceutical & health care products as well as basic grocery and non-food A kiosk offering ready-to
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 754 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 Delivery Express Express (~60 mins) Casual small purchase Regular Stock-up (2 hours+) Big ticket purchase E-Pharma E-Pharma Current needs & R
Slide 28: Online Delivery Already Has Good Traction
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Online Delivery Already Has Good Traction >67,500 24 avg. # of orders per day dark stores launched 1,200 452 avg. ticket across all online services1 cities in 66 regions served ~80,000 SKUs available across all se
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: Own Production — from Field / Site to Shelf
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Own Production — from Field / Site to Shelf 30
Slide 31: Suppliers
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Suppliers Suppliers Direct Import 1,300 Federal Suppliers 7% International Direct Import (Annual Average) 24% 750 Open 5,500 76% Contracts Domestic Suppliers Private Label 4,200 16% Share of Revenue Local Supplier
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 2Q 2022 92% Distribution Delivered from DC Centers 14 10 8 5 4 3 1 45 8% 651 Direct supplies 470 1 Nation
Slide 33: Employees
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Appendix Employees 359 thousand Headcount of Employees 37 Distribution 295 7 Regional In-store branches 16 Head Office 5 Other Dixy Mega- Super- Drogerie Convenience formats mart markets Stores Stores Production &
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 66,7% 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 1 499 Net retail sales YoY growth, % N
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 2020 2021 YoY Growth 2020 2021 YoY Growth Net sales 1,553,777 1,856,079 19.5% 1,553,777 1,856,079 19.5% Cost of sales -1,188,049 -1,416,841 19.3% -1,188,022 -1,416,815
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, % % % 1,856.1 of sales of SG&A RUB bln RUB bln 1,553.8 19.5% Total 383.2 20.6% 100.0% Staff costs 166.6 9.0% 43.5% Rent 80.8 4.4% 21.1% 2020 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 +13 b.p. Margin Bridge, 23,5% 0,1% 0,0% 23,7% 23,7% As % 22,8% of revenue Transport YoY growth Trading margin +74 b.p. 2019 2020 2021 2021 11,5% EBITDA +13 b.p. Margin Br
Slide 40: Balance Sheet
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Balance Sheet RUB mln ASSETS 2020 2021 EQUITY AND LIABILITIES 2020 2021 Property plant and equipment 336,125 377,303 Equity 182,889 178,985 Right-of-use assets 308,445 397,835 Long-term debt 147,695 205,287 Other
Slide 41: Debt Portfolio
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Debt Portfolio Low Currency Risk Debt Level Dynamics, Debt portfolio maturity* No loans denominated in foreign currency RUB bln RUB bln Short-term debt 270.4 270.4 Long-term debt Bonds Low Interest Rate Risk 184.2
Slide 42: Working Capital
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Working Capital 1 2 Target for 2022–2025 Initiatives to improve stock days Improvement Cross-functional collaboration of working capital of supply chain, operations • Optimize package size and order quantity With
Slide 43: Working Capital
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Working Capital 3 4 Initiatives to improve payment Structural influencing factors days and overdue receivables • New SQM addition — new stores have lower sales density during ramp up stage • Optimization of accoun
Slide 44: CAPEX Analysis
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix CAPEX Analysis 2021 2020 RUB mln RUB mln Total 66,900 32,120 Machinery and equipment Construction in progress and buildings Other Land assets Please note: there may be small variations in calculation of totals, su
Slide 45: Free Cash Flow
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Free Cash Flow 30,217 (12,649) (13,089) 2020, 109,930 114,409 (31,990) Working Capital RUB mln 2,457 Analysis 84,876 (29,871) 42 (19,206) 35,798 Average Days Adjusted Change Net Taxes OCF EBIDTA in working interes
Slide 46: 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 47: Russian Macro Environment
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Russian Macro Environment Return to parent slide Real GDP in 1Q 2022 improved y-o-y and Inflation remains supportive for retailers. Real disposable incomes are improving. 1 2 3 decreased q-o-q due to the gradual d
Slide 48: 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 1 444 Traditional retail Mo
Slide 49: 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 12,7% Magnit 11,5% Mercury 5,9% 39.7% Retail Lenta 2,4% 34.3% Share of TOP-10 Svetofor 1,8% Auchan 1,4% Share of TOP-5 Russian food retailers Metro 1,1% Okey
Slide 50: 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, % Q 1 2 3 4 1 2 3 4
Slide 51: 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 Q
Slide 52: 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 YoY growth, % YoY growth, % Q
Slide 53: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Quarterly Operating Data Summary RUB bln 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 SALES TOTAL 376.0 387.3 383.2 407.2 1,553.8 397.9 424.3 489.3 544.6 1,856.1
Slide 54: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Quarterly Operating Data Summary 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 LFL sales growth 7.8% 7.2% 6.9% 7.5% 7.4% 4.1% 5.2% 8.6% 9.9% 7.0% 12.0% 13.1% Conve
Slide 55: 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