M.video · RUS:MVID

M.video — M.Video-Eldorado — H1 2020 Earnings Presentation

29 slides from M.video's earnings presentation, Aug 24, 2020

  1. Slide 1: First Half of 2020 Financial Results & Market Update

    M.Video-Eldorado First Half of 2020 Financial Results & Market Update AUGUST 24, 2020

  2. Slide 2: Content & Liability Disclaimer

    Content & Liability Disclaimer The information contained in this presentation or enclosed herewith is provided and intended for informational purposes only and should not be relied on for any investment decisions. The information provided in the presentation includes assumptions and financial inform

  3. Slide 3: 1H 2020 Highlights & Market Overview

    01 Content 1H 2020 Highlights & Market Overview

  4. Slide 4: New reality for retail and consumer electronics

    New reality for retail and consumer electronics 01 Post-pandemic tailwinds RETAIL = ONLINE  Work from home becoming the new normal  Digital devices and household 02 items = essential spending ONLINE = SMARTPHONE  Stay-at-home economy based on digital entertainment, DIY, connectivity and 03 consum

  5. Slide 5: Transformational period for our business

    ~ x2 growth in online sales ~ 60% of sales are online sales Transformational Mutually beneficial partnerships period for our business: Safety through technology initiatives  ONE Retail brought forward by ~2 yrs Smartphone-centric customer experience  Cooperation with other players augmented by sto

  6. Slide 6: Russian CE market demonstrated double-digit growth in 1H 2020

    Despite the pandemic, Russian CE market demonstrated double-digit growth in 1H 2020, as rouble weakening and WFH goods supported sales Market turnover dynamics, YoY % Russian CE market, RUB bn CE retail market turnover Non-food retail market turnover 7.3% 10.5% Y-o-Y growth 6.9% CE (1H 2019, CE (1H

  7. Slide 7: Group continued to outperform the overall market in H1 2020

    Group continued to outperform the overall market in H1 2020 due to strong online momentum, leadership in digital and WFH categories 27.6% The Group consistently 26.5% outperforms the market Group Market 01 in top line growth and Share, % 25.7% sales of core categories 16.9% 16.8% The Group continuou

  8. Slide 8: Group increased its share in online CE market

    Group increased its share in online CE market by more than 500 bps due to ONE RETAIL ramp-up and well-invested store-based infrastructure 26.9% Pandemic created strong online Group Online 22.6% 21.5% 01 momentum that Market Share, % benefits players with solid e-com footing 10.9% 11.4% The Group mai

  9. Slide 9: Growth of market share in key categories

    Growth of market share in categories Kitchen, Entertainment & Photo-Video, Mobile and Home Office Market share,% XXpp Group M.Video-Eldorado Group М.Video-Eldorado All other players 1.1 pp 0.1 pp 0.4 pp 3.3 pp 1.4 pp 17.3 13.4 14.9 20.5 26.5 27.6 40.7 40.9 37.6 38 2,3% vs Reforecast -1,1% vs Reforec

  10. Slide 10: Online-driven Business Augmented by Extensive Footprint

    Online-driven Business Augmented by Extensive Footprint (1) 1,037 stores in 252 Russian cities Inventory storage breakdown >US$2bn Unique and well-invested store-based Distribution Regional Stores invested in stores and logistics infrastructure since 1993 centers multiplatforms infrastructure solvin

  11. Slide 11: Partnerships and new initiatives

    Partnerships and new initiatives: sales and NPS boost, new customers acquisition Sales via Last mile Video calls with e-Payments marketplaces partnerships in-store assistants ~24% ~14% sales conversion of total turnover rate (1H’20) +RUB 4.6 bn +10 pp in net sales (1H’20) YoY growth 11

  12. Slide 12: 1H 2020 Operational and Financial Results

    02 Content 1H 2020 Operational and Financial Results

  13. Slide 13: 1H 2020 operational highlights

    1H 2020 operational highlights 1H 2020 Group Sales YoY Growth in net sales in 1H’20 driven by: Number of tickets Average ticket Turnover mn of transactions RUB, incl.VAT mn RUB 01 19.8% growth in sales delivered in 1Q’20 +7,6% 193,625 -4,6% 208,389 +12,8% 26.9 25.7 02 Better than expected performanc

  14. Slide 14: 1H 2020 Group revenue and gross profit

    1H 2020 Group revenue and gross profit  Strong revenue growth in 1Q’20 and better-than-expected 2Q’20 with ~2x growth in online sales  13% increase in average ticket and market-beating growth in home office and mobile digital devices amid work and study from home surge Revenue grew by Gross profit

  15. Slide 15: Group EBITDA and net income

    1H 2019 Group EBITDA and net income  Austerity measures and efficient inventory management yielded better-than-expected EBITDA and margins  Overall negative effect from COVID-19 is estimated at RUB 248 mn (protective gear, sanitation, rent losses) + 20.3% 7.7% 44.2% + EBITDA growth YoY EBITDA marg

  16. Slide 16: EBITDA margin and net income (IAS 17) evolution

    EBITDA margin and net income (“IAS 17”) evolution EBITDA margin (“IAS 17”) evolution Adjusted net income1 (“IAS 17”) evolution In RUB bn Group Group EBITDA EBITDA margin Adjusted Net (1H 2019) 6.9% Income 3.7 increased (1H 2019) by +0.8pp YoY +RUB 2.3 bn EBITDA improvement YoY Gross Margin (0.2pp) E

  17. Slide 17: 1H 2020 Group cash balance evolution

    1H 2020 Group cash balance evolution  Strong cash position gives the Group strategic optionality and allows to re-focus on shareholder returns RUB 6.3 bn RUB 4.7 bn RUB 19.0 bn Cash generated by Cash used in Cash generated by operating activities investing activities financing activities 1H 2020 ca

  18. Slide 18: 1H 2020 Group leverage

    1H 2020 Group leverage  The Group continued its deleverage to reach optimal gearing level  The Group looks at various opportunities to refinance its outstanding debt in 2021 Gross leverage decreased by Net leverage decreased by 0.1x 0.8x Gross debt / EBITDA (IAS 17) Net debt / EBITDA (IAS 17) 0.1x

  19. Slide 19: Quarter-to-date performance: continued tailwinds

    Quarter-to-date performance: continued tailwinds July Group net sales YoY 30%+  Continued store and mall reopening across the country  Pent-up demand, esp. for LHA August (mtd) Group net sales YoY 20%+  Decrease of outbound tourism  Continued demand for WFH products Foot traffic in mid-August Yo

  20. Slide 20: Market Update & Outlook

    03 Content Market Update & Outlook

  21. Slide 21: ONE Retail strategy fueled by digital transformation

    ONE Retail strategy fueled by digital transformation In 1H’20, IT spend and front projects capex rose 17% and 5% YoY, respectively despite overall CAPEX optimization to ensure online business surge Seamless customer experience Tech enablers for ONE RETAIL WEB Customer interaction Machine learning RT

  22. Slide 22: M.Video and Eldorado brands and CVP development

    M.Video and Eldorado brands’ and CVP development Both brands successfully Mobile app online sales navigated through the pandemic sharing expertise, 3.6 million > 500,000 >2x Catching up to M.Video best practice and inventory installations weekly average users ONE Retail New Customer New/Updated Ecos

  23. Slide 23: Medium-term Group and brands' strategic vision

    Medium-term Group and brands’ strategic vision Digital and online-based company with optionality to transform into multi-category marketplace-centric business The most tech-driven and The most accessible advanced consumer and ubiquitous consumer electronics specialist electronics (and more!) retaile

  24. Slide 24: Medium-term outlook

    Medium-term outlook Shareholder returns Strategy review Store roll-out ONE Retail and engagement  Leverage and  50-60 total store  Unlocking shareholder  Enhancing seamless strengthen online openings in 2020 by value through re- customer experience momentum year-end focusing on returns, through

  25. Slide 25: Appendix

    Content +t APPENDIX ie ‘ee . . . 4 ’ . MNidecEldorado

  26. Slide 26: Dual-brand CVP allowing for maximum audience outreach

    Dual-brand CVP allowing for maximum audience outreach ASSORTMENT PRICE SERVICE EXPERIENCE ACCESS  100% CE  Wide range of  Stores as coverage complementary innovation  24/7 easy and  Latest models Highly products and touch-points seamless and premium personalized services, best-in- with customer

  27. Slide 27: Group SG&A expense breakdown

    Group SG&A expense breakdown In millions of Russian rubles 1H 2020 1H 2019 “IAS 17” “IAS 17” Personnel Cost 11,004 10,940 As % of revenue 6.3% 6.8% Rent & utilities 10,210 10,864 As % of revenue 5.9% 6.7% Advertising & marketing 2,684 2,764 As % of revenue 1.5% 1.7% Warehouse services 1,922 1,632 As

  28. Slide 28: IR/disclosure calendar 2020 and IR policy

    IR/disclosure calendar 2020 and IR policy Direct-to-investor approach Sep Virtual NDR  More focus on direct investor outreach and engagement Sep Sberbank 1x1 conference via digital platforms  Find us soon on Closir – corporate access 2.0 platform Sep Refinitiv-EM ESG Forum Focus on online growth m

  29. Slide 29: Contact information

    Contact information PJSC “M.VIDEO” Address 105066, Russia, Moscow Listing Moscow Stock Exchange Nizhnaya Krasnoselskaya Str., 40/12 bld 20 Web-site Ticker invest.mvideo.ru MVID Maxim Novikov Maxim.Novikov@mvideo.ru For investors’ requests, please, Timur Akhmedzhanov contact: Timur.Akhmedzhanov@mvide

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