Magnit · RUS:MGNT
Magnit — H1 2024 Earnings Presentation
47 slides from Magnit's earnings presentation, August 2024
Slide 1: Investor Presentation 1H 2024 Results
Investor Presentation 1H 2024 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 30,109 10,376 47 6,080 Total Number Selling Space, Distribution Trucks points of Stores thou
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 640 4,387 Convenience 19 423 Cities Stores 3 005 5 100 5 062 2 237 2 036 1 343 & Towns Magnit 19 Supermarkets 122 80 121
Slide 5: Operating Highlights
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Operating Highlights 1 Net retail sales, RUB bln1 2 Number of stores, EOP 3 Selling space, th. sq. m Net retail sales YoY growth, % Selling space YoY growth, % 2,509 29,165 30,109 10,053 10,376 2,300 27,405 9,472
Slide 6: Financial Performance
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Financial Performance Concise Profit & Loss Core 1H 2022 1H 2023 1H 2024 YoY achievements Sales, bn Rub 1,136.3 1,229.5 1,460.1 +18.8% Gross margin, % 23.2 22.7 22.4 -0.3pp SG&A, % (19.7) (19.9) (20.5) -0.7pp Impr
Slide 7: Russian Market Overview
Russian Market Overview Russian Macro Environment • Top-10 Russian Food Retailers and Market Share Breakdown
Slide 8: Russian Macro Environment
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Russian Macro Environment 4.0% 5.8% Real GDP decelerated y-o- Real food retail sales 1 4 growth decelerated. y in 2Q 2024 vs 1Q 2024 Market leaders are gaining market share Real GDP YoY change, % YoY YoY in 2Q 202
Slide 9: Top-10 Russian Food Retailers and Market Share Breakdown
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Top-10 Russian Food Retailers and Market Share Breakdown Magnit is a leading company on the growing Russian food retail market Russian market share breakdown X5 Group 14.6% 100% Magnit 12.8% Mercury Retail 6.1% 43
Slide 10: Strategy
Strategy Our Strategic Ambition • Our Strategy at a Glance Sustainability
Slide 11: Our Strategic Ambition
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Our Strategic Ambition Uphold leadership by maintaining competitiveness in an ever-evolving environment that requires adaptability to structural challenges We aim to preserve our market share and its balanced grow
Slide 12: Our Strategy at a Glance
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Out Strategy at a Glance Magnit is focused on boosting efficiency in the prevailing market conditions Priorities to achieve the goal To be able to respond to structural Key first group (front-end) priorities inclu
Slide 13: Sustainability Strategic Framework
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Sustainability Strategic Framework To Become #1 Retailer with Purpose in Russia Ambitions 1. 2. 3. 4. 5. Leader Positive impact Fully Improvement of Employer #1 in reducing the on the whole responsible the quality
Slide 14: 2025 Sustainability Commitments
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix 2025 Sustainability Commitments Sustainable Health and 1 Environment 2 sourcing 3 Employees 4 Communities 5 well-being 50% 100% 70% 10% Healthy Private labels and own production packaging to be recyclable, Respons
Slide 15: Magnit Today
Magnit Today Magnit Umbrella Brand • Convenience Store • Supermarket • Drogerie Dixy Convenience Store Other Small Formats and Pilots E-commerce • Own Production & Private Label • Suppliers • Logistics System • Employees
Slide 16: 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 17: 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, 474 Routine shopping Food for tonight / now Selling space, 350 Minor stock-
Slide 18: 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 6,807 Leased 8.3% 87% leased Increase YoY 13% owned 3-4 years CAPEX th RUB Average ticket Number of
Slide 19: 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, 4,352 Major shopping Special occasion Selling space, 2,015 Routine shopp
Slide 20: 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 969 Leased -1.1% 47% leased 53% owned Increase YoY 6-7 years Average ticket Number of tickets LTM - sales
Slide 21: 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 22: 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 1,811 4.7% Leased 93% leased 7% owned Increase YoY 3-4 years CAPEX th RUB sq. m of selling space Averag
Slide 23: 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 756 3.8% Size of the Store, sq. m 92% leased Increase YoY 8% owned Total size,
Slide 24: Other Small Formats and Pilots
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Appendix Other Small Formats and Pilots 01 City Pharmacy Convenience Magnit Go Small store offering ready-to-go / ready-to-eat products as well as basic grocery and non-food Pharmaceutical & health care products a
Slide 25: Other Small Formats and Pilots
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Other Small Formats and Pilots 02 Soft Hard discounter discounter My Price First Choice(V1) Magnit Ultra- A no-frills, low-price store with a pleasant Technologically advanced and Convenience atmosphere and a smal
Slide 26: 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 Own Service Partners Express • Magnit delivery • Self-pickup available Stock-up E-Pharma Magnit Market Magnit Delivery has been integrated into the core Magnit m
Slide 27: Online Services Have Good Traction
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Online Services Have Good Traction 172,721 26,543 avg. # of orders per day in 1H 2024 stores connected, including including Magnit Market pharmacies 1,364 3,179 avg. ticket across all online services1 cities and t
Slide 28: 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 Private Label Share of Revenue Improve own brand portfolio to support to provide exclusive goods with better qu
Slide 29: Development of Own Production in 2023
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Development of own production in 2023 Magnit expanded own production of open field vegetables The Company started testing Russian tomato and potato varieties In 2023 Magnit opened about 2,000 bakeries in its conve
Slide 30: Suppliers
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Suppliers Magnit differentiates its product offering through tailored procurement initiatives, including strategic partnerships with suppliers >5 thous. 49% suppliers share of local suppliers >2.5 thous. local sup
Slide 31: Partnership with Farmers
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Partnership with farmers The Company actively cooperates with farmers producing unique, high-quality products >170 +35% partner farmers turnover of farm products in the retail 24% chain 1.9 thous. 45% 76% farm pro
Slide 32: Logistics System
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Logistics System North North Central Volga Southern West Urals Siberian Caucasus Total Centralization Ratio 1H 2024 92% Distribution Delivered from DC Centers* 15 11 8 5 4 3 1 47 8% 678 Direct supplies 498 1 Natio
Slide 33: Employees
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Appendix Employees 364 thousand Headcount of Employees 43 Distribution 291 8 Regional In-store branches 17 Head Office 4 Other Dixy Super- Drogerie Convenience formats markets Stores Stores Production & other 2 3
Slide 34: Operating and Financial Results
Operating and Financial Results Key Operating Highlights • Summary Profit & Loss Revenue & Costs • Gross Margin & EBITDA • Balance Sheet Debt Portfolio • CAPEX Analysis • Free Cash Flow
Slide 35: Key Operating Highlights
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Key Operating Highlights Return to parent slide 1 Net retail sales, RUB bln 2 Number of visits, mln A LFL sales growth, % Net retail sales YoY growth, % Number of visits YoY growth, % 12.1 1 449 12.6 10.7 3 010 3
Slide 36: Summary Profit & Loss
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Summary Profit & Loss RUB mln pre-IFRS 16 IFRS 16 1H 2024 1H 2023 YoY Growth 1H 2024 1H 2023 YoY Growth Net sales 1,460,058 1,229,456 18.8% 1,460,058 1,229,456 18.8% Cost of sales -1,132,800 -949,769 19.3% -1,131,
Slide 37: Revenue & Costs
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Revenue & Costs Revenue SG&A Expense YoY growth, % Structure Dynamics, % % 18.8% of sales of SG&A RUB bln RUB bln 1,460.1 1,229.5 Total 300.0 20.5% 100.0% Staff costs 136.5 9.4% 45.5% 1H 2023 1H 2024 Rent 61.1 4.2
Slide 38: Gross Margin & EBITDA
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Gross Margin & EBITDA Pre-IFRS 16 IFRS 16 Gross -33 b.p. Margin Bridge, As % 23,2% 22,7% 22,4% 22,5% of revenue YoY decrease Trading Transport margin -45 b.p. 1H 2022 1H 2023 1H 2024 1H 2024 9,3% EBITDA -136 b.p.
Slide 39: Balance Sheet
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Balance Sheet RUB mln ASSETS 30.06.2024 31.12.2023 EQUITY AND LIABILITIES 30.06.2024 31.12.2023 Equity attributable to the Property, plant and equipment 388,391 367,050 shareholders of the parent company 146,955 1
Slide 40: Debt Portfolio
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Debt Portfolio Debt portfolio maturity3 RUB bln 334.7 Low Currency Risk Debt Level Dynamics, No loans denominated in foreign currency RUB bln Short-term debt 894.6 857.8 867.1 Long-term debt Bonds 113.2 236.32 91,
Slide 41: CAPEX Analysis
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix CAPEX Analysis 1H 2024 1H 2023 RUB mln RUB mln Total 53,124 25,443 Construction in progress and buildings 18,338 10,345 34.5% 40.7% Machinery and 11,870 equipment 46.7% 23,987 45.2% Other assets 10,787 Land 20.3%
Slide 42: Free Cash Flow
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Free Cash Flow 136,363 1H 2023, (56,181) RUB mln (30,442) (12,877) 36,863 (26,694) Working Capital 244 10,413 (33,174) 7,303 Analysis (15,458) 35 Adjusted Change Net Taxes OCF Capex Other FCF EBITDA* in working in
Slide 43: Appendix
Appendix Russian Macro Environment Quarterly Operating Data Summary
Slide 44: Russian Macro Environment
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Russian Macro Environment Return to parent slide Real GDP decelerated y-o-y in 2Q 2024 vs Real disposable income grew y-o-y in 2Q 2024. 1 2 Inflationary trends are supportive for retailers 3 RDI growth accelerated
Slide 45: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Quarterly Operating Data Summary RUB bln 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 1Q 2023 2Q 2023 1H 2023 3Q 2023 4Q 2023 FY 2023 1H 2024 SALES TOTAL 547.7 588.6 594.4 621.3 2,352.0 596.8 632.7 1,229.5 628.5 686.7
Slide 46: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Appendix Quarterly Operating Data Summary 1Q 2022 2Q 2022 3Q 2022 4Q 2022 2022 1Q 2023 2Q 2023 1H 2023 3Q 2023 4Q 2023 2023 1H 2024 LFL sales growth 12.0% 13.1% 13.8% 10.0% 12.1% 6.1% 4.7% 5.4% 3.1% 8.0% 5.5% 10.7% Magnit
Slide 47: 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