Magnit · RUS:MGNT
Magnit — FY2015 Earnings Presentation
29 slides from Magnit's earnings presentation, Jan 27, 2016
Slide 1: Investor Presentation FY 2015 Results
INVESTOR PRESENTATION FY 2015 RESULTS published on January 27, 2016
Slide 2: Magnit at a Glance
Magnit at a Glance Magnit at a Glance №1 Russian Food Retail Multi-format Business Model Chain by Revenue Comprising Convenience, Hypermarkets, and Number of Stores “Magnit Family” & Drogerie Stores 2 361 Cities & Towns 12 089 Total Number 4 414 thous.sq.m. 5 882 Trucks 33 DCs of Stores Selling Spac
Slide 3: Key Metrics
Magnit at a Glance Key Metrics P 951bn 24,5 % Revenue Revenue growth = FY 2015 Y-o-Y Net EBITDA Net debt/ Margin Margin LTM EBITDA 6,19 % 10,93% 0,9* Guidance for 2016 New Stores 900-950 80 1 200 Convenience Hyper- Drogerie Stores markets Stores Capex RUB 65-70bn Source: Company, as of December 31,
Slide 4: Strategy
Magnit at a Glance Strategy Growth Multi-format Organic Geographic Density of Store Store Growth Scope Coverage Value Efficiency Low High Assortment Cost Vertical Centralization Prices Quality Management Integration 4
Slide 5: Russian Food Retail Market
Magnit at a Glance Russian Food Retail Market $320bn 65 % Market Modern Size Retail FY 2014 Penetration Market Composition by Format Non-Modern 35% 65% Modern Open Markets 7% Top-7 Retail Chains 22,5% Traditional Trade 28% Other chains Modern Non-Chain 26% Stores 16,5% Source: Infoline, as of Decemb
Slide 6: Magnit vs Peers
Magnit at a Glance Magnit vs Peers Selling Space Number thous. sq.m., Revenue Market Cap Market Share of Stores, eop 2014 eop 2014 RUB bn, eop 2014 US$ bn, eop 2015 %, eop 2014 Magnit 9 711 3 591 763,5 19,0 6 X5 5 483 2 572 633,9 5,1 5 Dixy 2 195 747 229,0 0,5 2 Okey 108 552 152,0 0,5 1 Lenta 132 70
Slide 7: Geographical Coverage
Operational Overview Geographical Coverage 2 361 Cities & Towns 7 Federal Regions North Southern Central Volga North Urals Siberia Caucasus West 353 336 Convenience Stores 1648 2578 2877 936 866 9 594 8 Hypermarkets 7 62 37 61 14 30 219 Magnit Family 6 42 30 49 11 9 8 155 76 Drogerie Stores 85 444 5
Slide 8: Logistics System
Operational Overview Logistics System 33 1 292 12 089 5 882 Trucks DCs thous.sq.m. Total Number Warehousing Space of Stores 3763 Centralization Ratio Central 9 405,002 % Volga 8 283,871 3101 FY2015 Future Targets Convenience Stores Southern 8 310,387 2396 Delivered from DC 90 92 Urals 3 142,533 1428
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 December 31, 2015 9
Slide 10: Direct Import and Private Label
Operational Overview Direct Import 9 % 757 International Open Direct Import Contracts Private Label 596 11 % 84% PL Share Food SKUs of Revenue Items M Source: Company, as of December 31, 2015 10
Slide 11: Employees
Operational Overview Employees 265 989 Employees 194 723 In-store 40 369 19 108 People in Regional 9 349 People Employed 2 440 Other People Engaged Personnel in Distribution Branches by Head Office 1000 employees P 28 617 = 4% Average Wage Rate Monthly Increase* Salary* Source: Company, as of Decemb
Slide 12: Competitive Attributes and Sales Catchment Area
Operational Overview Competitive Attributes Location Prices Quality Assortment Reliability Atmosphere (of Products) 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
Slide 13: Convenience Store
Convenience Store
Slide 14: Convenience Store
Operational Overview Convenience Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 455 P 244,01 sq.m. Total = 325 Selling Space sq.m. $4,00 3 years Traffic tickets/sq.m./day If Owned Sales Mix 89 % Food 2,8 4-6 years Sales Density 11% Non-
Slide 15: Hypermarket
Hypermarket
Slide 16: Hypermarket
Operational Overview Hypermarket Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 6 615 P 614,3 sq.m. Total = 6-9 years 2 918 Selling Space sq.m. $10,1 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 17: Magnit Family
Magnit Family
Slide 18: Magnit Family
Operational Overview Magnit Family Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 2 161 P 446,9 sq.m. Total = 6-9 years 1 098 Selling Space sq.m. $7,3 Traffic Cost of New Store tickets/sq.m./day per sq.m. of Total Space, thousand RUB Sales Mix 2,0 Owne
Slide 19: Drogerie Store
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Slide 20: Drogerie Store
Operational Overview Drogerie Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 298 P 287,6 sq.m. Total = 229 Selling Space sq.m. $4,7 3 years Traffic tickets/sq.m./day If Owned Sales Mix 100 % Non-food 1,0 4-6 years Sales Density sales/sq
Slide 21: Format Summary
Operational Overview Format Summary Size Average Traffic Density Sales LFL 12M2015- Store Owner- Payback Cost of New Time of the Store Ticket Tickets/ Sales/ Mix 12M2014 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 • O
Slide 22: Summary P&L
Financial Overview Summary P&L 1H2014 / 1H2015 RUB MN 1H2014 1H2015 Y-o-Y Growth Net sales 349,047.11 454,808.63 30.3% Cost of sales (251,912.59) (327,748.22) 30.1% Gross profit 97,134.52 127,060.41 30.8% Gross margin, % 27.83% 27.94% SG&A (61,569.24) (79,406.25) 29.0% Other income, net 955.52 937.4
Slide 23: Revenue & Costs
Financial Overview Revenue & Costs Revenue Dynamics Sales Growth, RUB Net Income Dynamics RUB bn RUB bn Sales Growth, RUB +30,3% +29,0% +27,9% +33,8% 25 455 20 349 15 273 LFL LFL 10,6% 11,5% 1H2013 1H2014 1H2015 1H2013 1H2014 1H2015 SG&A Expense Structure Margin Dynamics Revenue — 455 RUB bn in SG&A
Slide 24: Gross Margin Bridge and EBITDA Margin Bridge
Financial Overview Gross Margin Bridge % of Sales +57 b.p. +11 b.p. 33 31 0,26 -0,03 -0,11 27,94 29 0,34 27,83 -0,42 0,64 27,26 27 25 23 21 19 17 15 GM Trading Margin Transport Losses GM Trading Margin Transport Losses GM 1H2013 1H2014 1H2015 EBITDA Margin Bridge % of Sales +22 b.p. +35 b.p. 0,57 0,
Slide 25: Free Cash Flow
Financial Overview Free Cash Flow RUB mn 1H 2014 2 936 Working Capital Analysis 36 952 -3 057 -3 927 32 904 -20 337 The Average Days Payable to Suppliers is 36 Days. 26 12 593 -8 427 -6 368 -2 202 Inventory Management Days is 47 Days 1H 2015 49 065 -2 238 -5 735 -4 755 36 337 -24 434 Working Capital
Slide 26: Balance Sheet
Financial Overview Balance Sheet RUB MN 2013 2014 1H2015 ASSETS Property plant and equipment 195,158.25 232,968.80 247,425.33 Other non-current assets 5,762.40 6,043.82 6,344.84 Cash and cash equivalents 5,931.13 17,691.54 11,915.01 Inventories 56,095.41 81,475.66 86,930.23 Trade and other receivabl
Slide 27: Capex Analysis
Financial Overview Capex Analysis Construction in Progress Machinery & Other Assets Land & Buildings Equipment FY 2014¹ 36 297 11 553 5 156 2 930 RUB 56 bn RUB 500 mn FY 2015 (plan) RUB 65 bn Hypermarkets Distribution Convenience Acquisition & Buy-out of Greenhouses Land for Store Maintenance Droger
Slide 28: Debt Burden
Financial Overview Debt Burden Debt Level Dynamics Credit Metrics Credit Profile RUB mn Net Debt EBITDA / Finance Expenses Short-term Debt The Company Has Long-term Debt 95 667 97 905 14,0 13,0 12,9 an Impeccable Credit History % 44 410 39 428 85 991 12,0 Collaboration with 77 975 73 761 10,0 the La
Slide 29: Contact Information
Contact Information Contact Information Timothy Post Head of Investor Relations +7 (961) 511-7678 post@ir.magnit.com http://ir.magnit.com 15/2 Solnechnaya Street Krasnodar, 350072 Russian Federation 29