Fix Price PJSC · RUS:FIXR
Fix Price PJSC — Fix Price — Investor Presentation (February 2022)
60 slides from Fix Price PJSC's investor presentation, February 2022
Slide 1: Undisputed Leader in Russian Value Retail
UNDISPUTED LEADER IN RUSSIAN VALUE RETAIL February 2022
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 4,900+ $3.1bn stores 2021 Revenue 2.5x 21% Consistently low prices Treasure hunt & essentials 90% $599m 2021-26E variety value retail market increase(2) 2021-26E variety value retail market CAGR(2) Market share in var
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 – 2010) (2011 – 2014) (2015 – 2016) (2017 – 2020) (2021 and beyond) Phase I Phase II Phase III Phase IV Phase V Format development Network expansion Multi-price point evolution High quality growth Cementing leadersh
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 Large and Growing Market
LEADER IN 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) Revenue 2021 in USDbn(2) US USDbn(2) USDbn(2) Revenue 3.5 Revenue 6.5 Revenue 3.1(3) # stores 1,397 # stores 1,110 # stores 4,904 ~145m(5) ~135m(5) ~250m(5) USDbn(2) USDbn(2) USDbn(2) USDbn(2) Revenue 34.3 Revenue 2.9
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) 54.3tr 2026F Russian Total Retail Market 39.3tr 2021E Russian Total Retail Market 79 c.10x out of 85 bigger vs. the presence in Russian secon
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 CONSISTENT TAM GROWTH ACROSS ALL DISTRICTS RUB BN(3) RUB BN(3) Current TAM breakdown largely corresponds to Fix Price stores locations CAGR ’21E-’26E TAM: +11% VVR: +21% 4 888 4 475 2026E 4,88
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 218m+ countries of operation(1) Company market entry / Exit 2017 2021 2019 2020 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… Several $1.3 / ₽99 $2.0 / ₽149 anchor price $1.1 / ₽79 $2.7 / ₽199 points(2) New Price Point (Nov 2021) 64% of assortment is rotated 73% $0.8 / ₽59 New Price Point (Nov 2021) $3.4 / ₽249(3) New Pri
Slide 14: Driving Constant Newness in Assortment
DRIVING CONSTANT NEWNESS IN ASSORTMENT WHAT? HOW? 40-60 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 ₽199 1 the price can be 2 ₽79 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 17 1 point = RUB 1 when spent Get the maximum value Data and feedback of the up to 20% active client base m through customised offers(3) of purchase amount is returned to the card in form of points
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 70% of respondents pay attention to
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 4,900+ 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 • Top-10 suppliers account for 44% 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 processes help streamline store openin
Slide 26: Logistics Infrastructure Scaled for Growth
Sourcing Standardisation Property Management Logistics Technology LOGISTICS INFRASTRUCTURE SCALED FOR GROWTH th. sqm - DC space owned leased STEADY GROWTH OF DISTRIBUTION CENTER SPACE… St Petersburg th. sqm, eop 282 35 th. sqm • Expected gradual increase of DC space to support store rollout STRATEGI
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: Continuous Store Expansion
CONTINUOUS STORE EXPANSION GEOGRAPGICAL COVERAGE (2020 and 2021, eop) Russia LEGEND KEY RUSSIA SIBERIAN FD(1) (Number of stores) +554 +79 CENTRAL FD(1) +xx 4,445 512 +138 xx 433 xx 3,891 1,291 2020 2021 1,153 NORTH-WESTERN FD(1) SOUTHERN FD(1) +64 +70 461 397 552 482 FAR-EASTERN FD(1) VOLGA FD(1) +2
Slide 30: Approx. 15 Years of Store Runway Potential Ahead
APPROX. 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) Abili
Slide 31: 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 32: Best-in-Class Financial KPIs
BEST-IN-CLASS FINANCIAL KPIS 5
Slide 33: Strong Growth, Profitability and Cashflow
STRONG GROWTH, PROFITABILITY AND CASHFLOW 1 RAPID GROWTH AT SCALE 2 STRONG PROFITABILITY # of Stores (EoP) Revenue (RUBbn) IFRS16 EBITDA Margin +18% +21% Standardised Asset 4,904 230.5 store portfolio light model 19.4% 19.2% 190.0 с. 9 2.7% 19.0% Months Store 2021 Capex as a 4,167 CAPEX Payback(1) %
Slide 34: Strong Growth Algorithm
1 STRONG GROWTH ALGORITHM STRONG AND CONSISTENT UNIT GROWTH CADENCE IMPROVING SALES DENSITY(1) INDUSTRY-LEADING TOP LINE GROWTH Unit development (# of stores as of end of period) Sales density (RUBth per sq.m) Revenue development (RUBbn) % of stores % wholesale 13% 10% 11% 14% 13% 12% franchised rev
Slide 35: Efficient Cost Optimisation Supporting Strong Profitability
2 EFFICIENT COST OPTIMISATION SUPPORTING STRONG PROFITABILITY GROSS MARGIN STABILITY EBITDA MARGIN EBITDA GROWTH Gross margin development (%) EBITDA margin development (%) IFRS 16 IAS 17 EBITDA development (RUBbn) IFRS 16 IAS 17 20% (IFRS 16) 19% 35% (IAS 17) (IFRS 16) 45% 44.2 (IAS 17) 19.0% 19.4%
Slide 36: 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 2021, %) 14% CAPEX New stores openings (% of revenue) 2.9% 3.2% 2.7% 4% DC RUB Distribution center CAPEX 0.8% 1.2% 0.8% 6,279m Refurbishments (% of revenue) 31% 51% IT and Other Including C
Slide 37: 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 Capitalised leases 138.0% Average: Average: Average: 23.0% 20.7% 16.9% 90.9% 46.1% 27.1% 28.7% 18.5% 16.0% 22.0% 20.8% 19.3% 11.9% 10.2% 7.2% 2
Slide 38: Superior Cash Flow Generation, Strong Balance Sheet and Consistent Shareholder Returns
3 SUPERIOR CASH FLOW GENERATION, STRONG BALANCE SHEET AND CONSISTENT SHAREHOLDER RETURNS FCF DYNAMICS(1) DIVIDENDS DECLARED (RUBm) Lease Payments FCF (Post-Lease Payments) (RUBm) % of revenue 15% 16% 13% Payout ratio(2) 104% 186% 73% 32,644 30,618 30,170 21,553 13,74 15,588 23,100 20,973 14,864 2019
Slide 39: Strong Management and Corporate Governance
STRONG MANAGEMENT AND CORPORATE GOVERNANCE 6
Slide 40: Management Team with Proven Track Record
MANAGEMENT TEAM WITH PROVEN TRACK RECORD 2007-2009 foundation Subsequent hires 2021 and beyond ZERO ROTATION Dmitry Kirsanov Inna Kondratyeva Oleg Shtainagel Victoria Smirnova Vladimir Pogonin IN SENIOR MANAGEMENT Chief Executive Officer Head of Category Management Logistics Director Head of Marketi
Slide 41: Corporate Governance: Board of Directors
CORPORATE GOVERNANCE: BOARD OF DIRECTORS With effect from the IPO, the Board of Directors will consist of 7 members, 3 of which will be INEDs Sergey Lomakin Artem Khachatryan Dmitry Kirsanov Chairman and Founding Shareholder Founding Shareholder Executive Director Highly experienced Board of Directo
Slide 42: Our Path to Sustainability
OUR PATH TO SUSTAINABILITY ESG Committee IPO ESG assessment In November 2021, Fix Price announced it On 10 March 2021, In 2021, Fix Price undertook was setting up an ESG Committee. The Fix Price went public a comprehensive assessment Committee consists only of independent on the London of all its bu
Slide 43: Four Pillars to Drive ESG Strategy
COMPANY OVERVIEW: FOUR PILLARS TO DRIVE ESG STRATEGY ESG strategic priorities – the 4Ps In 2021 we conducted an in-depth analysis of our ESG practices and identified the following strategic priorities This 4P approach is helping us create a roadmap of metrics and activities to further embed ESG into
Slide 44: Undisputed Leader in Value Retail
UNDISPUTED LEADER IN VALUE RETAIL Value retail business model proven globally 21% Revenue Growth(10) 4,900+ ~18,600(3) ~1/4bn addressable Strong financial algorithm 19.2% Fix Price stores(1) population – over 15 years of EBITDA Margin (IFRS 16)(9) ~5,300 roll-out potential ahead c.90% ROIC (IFRS 16)
Slide 45: Operating and Financial Results Q4 and 12M 2021
OPERATING AND FINANCIAL RESULTS Q4 AND 12M 2021
Slide 46: Key Achievements in Q4 / 12M 2021
KEY ACHIEVEMENTS IN Q4 / 12M 2021 14.5% / 21.3% 151 / 737 3.2% / 7.2% Revenue growth Net store openings(1) LFL sales year-on-year growth RUB 13.4bn / RUB 44.2bn 20.1% / 19.2% 10% / 47% (2) EBITDA EBITDA margin Loyal customer base growth Source: Company information, Management Accounts for Q4 2020 an
Slide 47: Key Financials & Operational Targets
KEY FINANCIALS & OPERATIONAL TARGETS Key metric 2021 guidance 2021 fact Net store openings(1) ~700 in 2021 ✓ 737 LFL(2) growth ~10% area in 2021-2022 ✓ 9% (3) Adjusted EBITDA margin Consistent with latest historical performance with ✓ 19.2%, unchanged from the average level for FY 2019-2020, despite
Slide 48: Continuous Store Expansion
CONTINUOUS STORE EXPANSION FIX PRICE PORTFOLIO EXPANSION SELLING SPACE EXPANSION (Number of stores) (Ths sqm) +737 +167 1,057 4,904 +147 +655 118 890 4,167 536 92 3,512 425 743 440 97 4,368 938 3,742 797 3,072 647 2019 2020 2021 2019 2020 2021 Company-operated Franchised Company-operated Franchised
Slide 49: LFL Performance
LFL PERFORMANCE LFL SALES (1) DYNAMICS AFFECTED BY COVID-RELATED RESTRICTIONS COMMENTS ON QUARTERLY DYNAMICS FY 2021 LFL sales (2) on Russian stores unaffected by restrictions: 9.0% • LFL sales increased by 3.2% in Q4 2021 on the back of new COVID-related restrictions: non- working week in November,
Slide 50: Extended CVP and Continued Robust Price Advantage
EXTENDED CVP AND CONTINUED ROBUST PRICE ADVANTAGE 68% OF ASSORTMENT UNDER RUB100(1) RETAIL SALES MIX % of retail sales % of SKU Q4 2019 Q4 2020 Q4 2021 1% 0% 0,4% 3% 2% 1% 14% 22% 12% 11% 17% 11% 25% 25% 27% 20% 20% Food 70% 64% 45% 64% 63% 44% 19% 20% 20% Drogerie 14% 13% 22% 21% 18% 24% 56% 55% 53
Slide 51: Strong Revenue Growth and Robust Profitability
STRONG REVENUE GROWTH AND ROBUST PROFITABILITY TOTAL REVENUE GROSS PROFIT (RUBm) (RUBm) LFL Sales growth Gross profit margin 12.7% 15.7% 3.2% 15.4% 15.8% 7.2% 34.0% 32.1% 32.9% 32.2% 32.4% 31.8% + 14.5% + 21.3% + 19.3% + 17.3% + 34.0% + 33.0% 230,473 + 33.8% 73,400 66,507 27,145 + 26.6% 190,059 21,8
Slide 52: Strong Revenue Growth and Robust Profitability (Cont'd)
STRONG REVENUE GROWTH AND ROBUST PROFITABILITY (CONT’D) EBITDA (IFRS 16) OPERATING PROFIT (RUBm) (RUBm) EBITDA margin (IFRS 16 ) Operating profit margin 21.5% 19.7% 20.1% 19.0% 19.4% 19.2% 15.9% 15.2% 15.5% 12.9% 14.2% 14.0% + 20.0% + 20.1% + 35.5% 32,326 44,155 + 45.9% 36,788 26,923 +16.8% + 16.6%
Slide 53: SG&A Expenses Analysis
SG&A EXPENSES ANALYSIS SG&A BREAKDOWN COMMENTS (% of revenue) • FY 2021 SG&A expenses decreased by 16 bps to 18.2% of revenue thanks to efficiencies in staff costs, rental and D&A expense as well as security and IFRS 16 advertising costs • In Q4 2021, SG&A expenses grew by 65 bps to 17.8% of revenue
Slide 54: Capital Expenditures to Support Further Growth
CAPITAL EXPENDITURES TO SUPPORT FURTHER GROWTH CAPEX(1) CAPEX COMPOSITION (RUBm) (Q4 2021, %) 5% 0.3% New stores openings CAPEX 4.4% 1.6% 3.2% 2.7% 32% RUB (% of revenue) DC 1,065m Refurbishments 63% IT and Other 6,279 COMMENTS • CAPEX decrease year-on-year in Q4 2021 was attributable to lower inves
Slide 55: Net Working Capital Dynamics
NET WORKING CAPITAL DYNAMICS 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 0.4% 0.6% 3.5% revenue 12M 2019 65 12M 2019 71 12M 2020 66 12M 2020 66 40,566 26,991 7,946 1
Slide 56: Appendix
APPENDIX
Slide 57: P&L Summary
P&L SUMMARY In millions of Russian rubles 2019 2020 2021 Q4 2019 Q4 2020 Q4 2021 Revenue 142,880 190,059 230,473 43,345 58,095 66,507 Retail revenue 123,194 166,025 203,328 37,114 51,327 59,086 Wholesale revenue 19,686 24,034 27,145 6,231 6,768 7,421 Cost of sales (96,919) (128,544) (157,073) (28,62
Slide 58: Balance Sheet Summary
BALANCE SHEET SUMMARY In millions of Russian rubles 31.12.2019 31.12.2020 31.12.2021 ASSETS Non-current assets 18,930 25,297 29,805 Property, plant and equipment 10,882 13,308 18,142 Right-of-use assets (non-current) 6,220 8,554 9,636 Other non-current assets 1,828 3,435 2,027 Current assets 34,730
Slide 59: Cash Flow Summary
CASH FLOW SUMMARY In millions of Russian rubles 2019 2020 2021 Q4 2019 Q4 2020 Q4 2021 Profit before tax 17,535 26,310 30,596 6,844 8,831 9,499 Cash from operating activities before changes in working capital 28,216 38,338 46,155 9,509 12,005 13,990 Changes in working capital (2,428) (1,548) (9,646)
Slide 60: EBITDA and Net Debt Reconciliation
EBITDA AND NET DEBT RECONCILIATION EBITDA (IAS 17) RECONCILIATION In millions of Russian rubles 2019 2020 2021 Q4 2019 Q4 2020 Q4 2021 EBITDA (IFRS 16) 27,150 36,788 44,155 9,317 11,442 13,363 Rental expense (7,221) (7,999) (9,840) (1,966) (2,251) (2,565) Utilities (153) (157) (153) (37) (38) (39) E