Fix Price PJSC · RUS:FIXR
Fix Price PJSC — Fix Price — Investor Presentation (February 2024)
56 slides from Fix Price PJSC's investor presentation, February 2024
Slide 1: Undisputed Leader in Russian Value Retail
UNDISPUTED LEADER IN RUSSIAN VALUE RETAIL February 2024
Slide 2: Disclaimer
DISCLAIMER IMPORTANT: This document does not constitute or form part of, and should not be because they relate to events and depend on circumstances that may or may not occur the results of the Company's operations presented under IAS 17 after 1 January 2019 construed as an offer for sale or subscri
Slide 3: Undisputed Leader in Russian Value Retail
Undisputed Leader in Russian Value Retail 3
Slide 4: Undisputed Leader in Russian Value Retail
UNDISPUTED LEADER IN RUSSIAN VALUE RETAIL OUR PROPOSITION OUR NUMBERS OUR AMBITION 6,400+ $3.4bn stores 2023 Revenue(1) c.18,600 Total store potential in Consistently low prices Treasure hunt & essentials c.90% $622m Russia, Belarus and Kazakhstan(4) Market share in variety 2023 EBITDA(1) value reta
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 – 2014) (2015 – 2020) (2021 – 2023) (2024 and beyond) Phase I & II Phase III & IV Phase IV Phase V Format development Multi-price point evolution Cementing leadership Committed to further growth and expansion and hi
Slide 6: 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 Undisputed Leader in Russian Value Retail
Slide 7: Leader in a Large and Growing Market
LEADER IN A LARGE AND GROWING MARKET 1
Slide 8: Value Retail Is Proven Globally
VALUE RETAIL IS PROVEN GLOBALLY FIX PRICE IS AMONGST THE GLOBAL SECTOR LEADERS(1) LTM Revenue in USDbn(2) US USDbn(2) USDbn(2) Revenue 6.9(3) Revenue 6.5(4) Revenue 3.4(5) # stores 1,541 # stores 1,170 # stores 6,414 ~256m(7) ~149m(7) ~135m(7) USDbn(2) USDbn(2) USDbn(2) USDbn(2) Revenue 38.8 Revenue
Slide 9: We Are Disrupting Large and Growing TAM
WE ARE DISRUPTING LARGE AND GROWING TAM(1) SIGNIFICANT POTENTIAL IN THE GROWING ADDRESSABLE MARKET(1) FIX PRICE IS DRIVING ADDRESSABLE MARKET IN RUSSIA RUB(2) 42.5tr 2022 Russian Total Retail Market 81 c.90% presence in Russian market share in regions Variety Value Retail market in Russia(4) 2022 Ru
Slide 10: TAM and VVR Channel Are Gaining Shares in Retail Market
TAM AND VVR CHANNEL ARE GAINING SHARES IN RETAIL MARKET SUSTAINABLE GROWTH OF THE TAM(1) AND VVR(2) CHANNEL, RUB BN FILTERING ONLY RELEVANT PRODUCTS ACROSS CATEGORIES CAGR ‘18-’22 +15% +24% As % of addressable As % of total market category TAM VVR Food and Drinks 42% 7% 3,564 Homewares, Home Furnish
Slide 11: Fix Price = Variety Value Retail in Russia
FIX PRICE = VARIETY VALUE RETAIL IN RUSSIA FAVOURABLE CONDITIONS FOR VARIETY VALUE RETAIL STRONG INCUMBENT POSITION Number of stores, end of Market share(5) Year of Population in Russia and other core period 226m+ countries of operation(1) Company market entry / Exit 2017 2022 2019 2022 Population i
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… By 2023 retail sales $1.1 / ₽99 $1.7 / ₽149 Several $0.9 / ₽79 $2.2 / ₽199 anchor price points(2) $2.8 / ₽249 71% of assortment is rotated $0.7 / ₽59 ~77% $3.3 / ₽299 of our products $0.6/ ₽55 29%
Slide 14: Driving Constant Newness in Assortment
DRIVING CONSTANT NEWNESS IN ASSORTMENT WHAT? HOW? C.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 CONTINUOUS LEVERAGING LONG-STANDING Accessories BROWSING PARTNERSHIPS WITH 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 ₽299 1 the price can be 2 ₽59 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 26 1 point = RUB 1 when spent Get the maximum value Data and feedback of the up to 30% active client base m of purchase amount is returned to the card in form of points through customised offers(3)
Slide 17: We Know Our Customers and Their Shopping Habits
WE KNOW OUR CUSTOMERS AND THEIR SHOPPING HABITS LARGE AND GROWING PORTRAIT OF FIX PRICE RUSSIAN CUSTOMERS ARE SENSITIVE TO KEY DEMOGRAPHICS CUSTOMER(2)(3) PRICES(4)… Russian population split by monthly income (%)(1) Division of audience by gender Russian customer 9 of 10 Russian customers tend to sa
Slide 18: Introduction to Our Stores
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 18
Slide 19: Operational Excellence
OPERATIONAL EXCELLENCE 3
Slide 20: 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 Direct sourcing backed by Fueling expansion at scale and LOGISTICS Across all 6,400+ stores(1) Platform scaled for growth sophisticated algorithms d
Slide 21: 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 HIGHLY EFFICIENT EFFECTIVELY MANAGING FX EXPOSURE SUPPLIER BASE TEAM ORGANISATION LEVERAGING A CLEAR SET OF TOOLS Department head 1 Increasing share o
Slide 22: 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 Fix Price: Supplier: price setter price taker Known to supplier Fixed price offered to customer Retail price (along with Fix Price’s forecast
Slide 23: 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 24: Proven Store Rollout Process
Sourcing Standardisation Property Property Management 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 Size / Traffic Revenue / Predominantly
Slide 25: Efficient Property Management Framework
Sourcing Standardisation Property Property Management 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 procedures help streamline 100% store
Slide 26: Logistics Infrastructure Scaled for Growth
Sourcing Standardisation Property Management Logistics Technology LOGISTICS INFRASTRUCTURE SCALED FOR GROWTH thous. sqm - DC space owned leased STEADY GROWTH OF DISTRIBUTION CENTER SPACE… St Petersburg thous. sqm, eop 36 thous. sqm • Proactive launch of new DCs to 484 5 support future store rollout
Slide 27: State of the Art IT Infrastructure Constantly Enhanced
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 28: Substantial Growth Potential
SUBSTANTIAL GROWTH POTENTIAL 4
Slide 29: Over 15 Years of Store Runway Potential Ahead
OVER 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) ~18,600(8) Ability
Slide 30: Tested Levers to Drive LFL Growth
TESTED LEVERS TO DRIVE LFL GROWTH Creating Growing active Investing in store Delivering constant range “Bonus Card” Managing pricing and customer essential products “newness” holders experience Attractive, clean, well-lit stores to Flexible price Higher spend, shop comfortably Drives desire Drives n
Slide 31: Best-in-Class Financial KPIs
BEST-IN-CLASS FINANCIAL KPIS 5
Slide 32: Strong Growth, Profitability and Cashflow
STRONG GROWTH, PROFITABILITY AND CASHFLOW 1 SCALE SUPPORTS GROWTH 2 STRONG PROFITABILITY # of Stores (EoP) Revenue (RUBbn) Adj. IFRS16 EBITDA Margin +13.3% +5.1% Standardised Asset 6,414 291.9 store portfolio light model 19.5% 5,663 277.6 с. 10 2.2% 19.2% 18.6% Months Store 2023 CAPEX as a CAPEX Pay
Slide 33: Strong Growth Algorithm
1 STRONG GROWTH ALGORITHM STRONG AND CONSISTENT UNIT GROWTH CADENCE SALES DENSITY(1) DECENT TOP LINE GROWTH Unit development (# of stores as of end of period) Sales density (RUB thous. per sqm) Revenue development (RUBm) % of % wholesale franchise 11% 11% 11% 12% 11% 11% revenue stores 14% 13% CAGR
Slide 34: Efficient Work with Assortment Supports Strong Profitability
2 EFFICIENT WORK WITH ASSORTMENT SUPPORTS STRONG PROFITABILITY GROSS MARGIN ADJUSTED EBITDA MARGIN EBITDA Gross margin (%) Adjusted EBITDA margin (%) IFRS 16 IAS 17 Adjusted EBITDA (RUBbn) IFRS 16 IAS 17 54.2 54.2 34.0% 19.2% 19.5% 44.2 18.6% 33.1% 31.8% 43.1 41.4 34.2 15,5% 14,8% 14,2% 2021 2022 20
Slide 35: Asset Light Model with Consistent Unit Returns
3 ASSET LIGHT MODEL WITH CONSISTENT UNIT RETURNS LAST THREE YEARS CAPEX(1) CAPEX COMPOSITION CAPEX (RUBm) (12M 2023, %) CAPEX (% of revenue) 2.7% 4.3% 2.2% 17% New stores openings Distribution RUB DC centre CAPEX 0.8% 2.4% 0.6% 25% 6.6bn 58% (% of revenue) IT and Other OUTSTANDING UNIT ECONOMICS 12,
Slide 36: Industry Leading ROIC
3 INDUSTRY LEADING ROIC(1)(2) US DOLLAR STORES / VALUE RETAIL(3) INTERNATIONAL VALUE RETAIL(4) RUSSIAN RETAIL(4) Non-capitalised leases Capitalised leases (5) 94.7% Average: Average: Average: 17.0% 73.6% 22.0% 15.9% 29.8% 23.6% 26.1% 25.2% 16.1% 24.0% 16.1% 9.4% 12.2% 10.3% 6.2% 2023 2023 Five Dolla
Slide 37: Fast Inventory Turnover Drives Growth
3 FAST INVENTORY TURNOVER DRIVES GROWTH NET TRADE WORKING CAPITAL DEVELOPMENT(1) ROBUST INVENTORY DAYS AND DAYS PAYABLE LEVELS (RUBm) Inventory days(2) (days) and Days payable(3) (days) % of Inventory days Days payable 3.4% 3.3% 5.0% revenue 2021 78 2021 71 47,957 41,020 2022 80 2022 68 40,566 14,48
Slide 38: Commitment to Sustainable Development
COMMITMENT TO SUSTAINABLE DEVELOPMENT 6
Slide 39: Four Pillars to Drive ESG Agenda
COMPANY OVERVIEW: FOUR PILLARS TO DRIVE ESG AGENDA ESG strategic priorities – the 4Ps Our ESG practices are guided by four strategic priorities, the 4Ps – People, Product, Partners and Planet People Product We strive to form an assortment made up We want to create a comfortable and safe of high qual
Slide 40: Undisputed Leader in Value Retail
UNDISPUTED LEADER IN VALUE RETAIL Value retail business model proven globally 5.1% Revenue Growth(8) 6,400+ ~18,600(3) ~1/4bn addressable Strong financial algorithm 18.6% Fix Price stores(1) population – over 15 years of Adjusted EBITDA Margin (IFRS 16)(7) ~6,100 roll-out potential ahead 74% ROIC (I
Slide 41: Q4 and 12M 2023 Operating and Financial Results
Q4 AND 12M 2023 OPERATING AND FINANCIAL RESULTS
Slide 42: Key Achievements in Q4 / 12M 2023
KEY ACHIEVEMENTS IN Q4 / 12M 2023 RUB 82bn / RUB 292bn 252 / 751 17.6% Revenue Net store openings(1) Loyal customer base growth year-on-year 35.3% / 34.0% RUB 16bn / RUB 53bn RUB 9bn / RUB 36bn Gross margin EBITDA Net profit Source: Company information, Management Accounts for Q4 2023, FY 2022 and F
Slide 43: Continuous Store Expansion
CONTINUOUS STORE EXPANSION GEOGRAPHICAL COVERAGE (2022 and 2023, eop) LEGEND KEY RUSSIA NORTH-WESTERN FD(1) SIBERIAN FD(1) Russia (Number of stores) +658 +55 +104 CENTRAL FD(1) 5,756 521 576 699 +xx 5,098 595 +182 xx xx 1,650 1,468 FAR-EASTERN FD(1) +19 SOUTHERN FD(1) 119 100 +82 718 636 URALS FD(1)
Slide 44: Continuous Store Expansion
CONTINUOUS STORE EXPANSION FIX PRICE STORE PORTFOLIO GROWTH SELLING SPACE EXPANSION (Number of stores) (Thous. sqm) +13.5% +13.3% 1,391 6,414 1,225 156 5,663 703 138 624 1,234 5,711 1,087 5,039 31 December 2022 31 December 2023 31 December 2022 31 December 2023 Company-operated Franchised Company-op
Slide 45: LFL Performance
LFL PERFORMANCE 2-YEAR STACKED LFL SALES GROWTH(1)(2) COMMENTS ON QUARTERLY DYNAMICS LFL Sales (Current Year) LFL Sales (Prior Year) • In Q4 2023, LFL sales were 0.9% lower y-o-y due to softer consumer demand amid continued market 19.4% 24.9% 29.0% 16.0% 7.2% 5.9% 6.3% 8.0% 3.0% uncertainty. In a mi
Slide 46: Extended CVP and Continued Robust Price Advantage
EXTENDED CVP AND CONTINUED ROBUST PRICE ADVANTAGE 68% OF ASSORTMENT UNDER RUB 99(1) RETAIL SALES MIX % of retail sales % of SKU Q4 2022 Q4 2023 0.1% 0.1% 0.1% 0.03% 4% 4% 15% 15% 8% 18% 11% 26% 25% 24% Food 37% 47% 36% 20% 25% 25% 48% Drogerie 21% 37% 31% 12% 10% 48% 50% Non-food Q4 2022 Q4 2023 Q4
Slide 47: Revenue Growth and Robust Profitability
REVENUE GROWTH AND ROBUST PROFITABILITY TOTAL REVENUE GROSS PROFIT (RUBm) (RUBm) LFL Sales Gross profit 35.3% 33.1% 34.0% 3.9% (0.9)% 10.1% (4.1)% 34.0% dynamics margin + 5.1% + 7.8% + 7.8% 291,865 277,644 99,172 + 11.7% 32,898 91,994 31,432 81,669 75,757 28,794 8,907 25,789 8,406 246,212 258,967 67
Slide 48: Revenue Growth and Robust Profitability (Cont'd)
REVENUE GROWTH AND ROBUST PROFITABILITY (CONT’D) ADJUSTED EBITDA (IFRS 16) OPERATING PROFIT (RUBm) (RUBm) Adjusted 19.9% 19.5% 19.5% 18.6% Operating 15.3% 14.2% 14.8% 13.0% EBITDA margin profit margin (IFRS 16) + 0.03% (7.6)% 54,198 54,212 41,060 + 5.8% + 0.1% 37,927 15,071 15,938 11,623 11,632 Q4 2
Slide 49: SG&A Expenses Analysis
SG&A EXPENSES ANALYSIS SG&A BREAKDOWN COMMENTS (% of revenue) • Selling, general and administrative expenses (SG&A) excluding LTIP and D&A expenses rose 142 bps y-o-y to 16.0% of revenue due to higher staff costs, advertising IFRS 16 expenditures, bank charges and other expenses as well as the negat
Slide 50: Capital Expenditures to Support Further Growth
CAPITAL EXPENDITURES TO SUPPORT FURTHER GROWTH CAPEX(1) CAPEX COMPOSITION (RUBm) (Q4 2023, %) 14% New stores openings CAPEX 6% 8.6% 1.9% 4.3% 2.2% (% of revenue) RUB DC 1.5bn 80% IT and Other 12,015 COMMENTS 6,558 • CAPEX for Q4 2023 amounted to RUB 1.5 billion, down from RUB 6.5 6,518 billion in Q4
Slide 51: Net Working Capital Dynamics
NET WORKING CAPITAL DYNAMICS NET TRADE WORKING CAPITAL DEVELOPMENT(1) ROBUST INVENTORY DAYS AND DAYS PAYABLE LEVELS (RUB m) Inventory days(3) (days) and Days payable(4) (days) NTWC as % Inventory days Days payable 3.3% 5.0% of revenue (2) FY 2022 80 FY 2022 68 41,020 47,957 FY 2023 84 FY 2023 67 14,
Slide 52: Conservative Debt Level and Superior Cash Flow Generation
CONCERVATIVE DEBT LEVEL AND SUPERIOR CASH FLOW GENERATION NET DEBT / (CASH)(1) FCF DYNAMICS(3) (RUB m) (RUB m) Leverage % of ratio(2) (0.04)x (0.6)x revenue 9.0% 11.2% 32,572 24,857 11,441 -- (5,000) (1,656) 9,903 (10 ,000) 21,131 (15 ,000) 14,954 (20 ,000) FY 2022 FY 2023 (22,644) (25 ,000) FY 2022
Slide 53: Appendix
APPENDIX
Slide 54: P&L Summary
P&L SUMMARY In millions of Russian roubles 2021 2022 2023 Revenue 230,473 277,644 291,865 Retail revenue 203,328 246,212 258,967 Wholesale revenue 27,145 31,432 32,898 Cost of sales (157,073) (185,650) (192,693) Gross profit 73,400 91,994 99,172 Gross margin, % 31.8% 33.1% 34.0% SG&A (excl. LTIP and
Slide 55: Balance Sheet Summary
BALANCE SHEET SUMMARY In millions of Russian roubles 31.12.2021 31.12.2022 31.12.2023 ASSETS Non-current assets 29,804 40,532 45,045 Property, plant and equipment 18,142 19,692 29,317 Right-of-use assets (non-current) 9,636 11,598 12,586 Other non-current assets(1) 2,026 9,242 3,142 Current assets 5
Slide 56: Cash Flow Summary
CASH FLOW SUMMARY In millions of Russian roubles 2021 2022 2023 Profit before tax 30,596 37,825 38,038 Cash from operating activities before changes in working capital 46,155 56,889 55,416 Changes in working capital (9,646) (1,688) (7,476) Net cash generated from operations 36,509 55,201 47,940 Net