Magnit · RUS:MGNT
Magnit — Q1 2021 Earnings Presentation
65 slides from Magnit's earnings presentation, Apr 29, 2021
Slide 1: Investor Presentation 1Q 2021 Results
Investor Presentation 1Q 2021 RESULTS
Slide 2: Disclaimer
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Disclaimer This presentation ("Company Presentation") comprises certain written materials/ No representation or warranty, express or implied, is given by
Slide 3: Magnit at a Glance
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit at a Glance #1 retailer in Russia by number of stores with unrivalled infrastructure platform Key differentiation 21,900 7,606 39 4,153 Total Numbe
Slide 4: Geographical Coverage
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Geographical Coverage North North 3,770 Caucasus Southern Central Volga West Urals Siberian Total Cities & Towns Convenience 15,098 7 424 2,295 4,192 4,03
Slide 5: Operating Highlights
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Operating Highlights 1 Net retail sales, RUB bln 2 Number of stores, EOP 3 Selling space, th. sq. m Net retail sales YoY growth, % Selling space YoY growt
Slide 6: Financial Performance
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Financial Performance Core Concise Profit & Loss achievements 2018 2019 2020 YoY Sales, bn Rub 1,237.0 1,368.7 1,553.8 +13.5% Gross margin, % 23.9 22.8 23
Slide 7: Russian Market Overview
Russian Market Overview Russian Macro Environment • Russian Food Retail Market Potential
Slide 8: Russian Macro Environment
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Macro environment provides further scope for consolidation – supportive for strong players 1 Real GDP substantially improved in
Slide 9: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Food Retail Market Potential Magnit is a leading company on the growing Russian food retail market 1 Russian grocery 2 There is still room 3 Moder
Slide 10: Strategy
Strategy Our Strategic Goal • Our Strategy at a Glance • Implementation Plan Key Strategic Guidance 2021-2025 • Key Financial Guidance 2021-2025 Sustainability
Slide 11: Our Strategic Goal
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Our Strategic Goal Cement current leading federal retail positions growing market share significantly & profitably How we get there — at a glance We will
Slide 12: Our Strategy at a Glance
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Our Strategy at a Glance Consumer first Consumers Most efficient & promising ways to market Consumer centric decision making with enhanced Growing LFL, be
Slide 13: We Have a Clear Implementation Plan (1/2)
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix 1/2 We Have a Clear Implementation Plan STRATEGIC SHORT TERM MID & LONG TERM PILLAR within 1-2 years within 3-5 years Consumer first • Updated CVP incl. n
Slide 14: We Have a Clear Implementation Plan (2/2)
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix 2/2 We Have a Clear Implementation Plan STRATEGIC SHORT TERM MID & LONG TERM PILLAR within 1-2 years within 3-5 years Modern & efficient • All functional
Slide 15: Key Strategic Guidance 2021-2025
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Key Strategic Guidance 2021-2025 Thought through strategic plan to execute to capture tremendous business improvement Clear CVP initiatives to enhance con
Slide 16: Key Financial Guidance 2021-2025
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Key Financial Guidance 2021-2025 Benefits from lucrative EBITDA margin steadily moving to the direction of 8% within 2021-2025 leading to very attractive
Slide 17: Sustainability Strategic Framework
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Sustainability Strategic Framework #1 Retailer with Purpose in Russia Ambitions 1. 2. 3. 4. 5. Leader Positive impact 100% responsible Best in class Emplo
Slide 18: 2025 Sustainability Commitments
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix 2025 Sustainability Commitments Sustainable Health 1 Environment 2 sourcing 3 Employees 4 Communities 5 and wellness 50% 100% 70% 10% Healthy Private labe
Slide 19: Magnit Today
Magnit Today Magnit Umbrella Brand Convenience Store Supermarket • Drogerie Store Format Summary • Other Small Formats and Pilots • Launch of E-commerce • Own Production & Private Label • Logistics System Employees
Slide 20: Magnit Umbrella Brand — Consumer Missions and Formats
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Magnit Umbrella Brand — Consumer Missions and Formats Everything that Core offline formats incl. pharmacies in grocery and drogerie stores New promising v
Slide 21: Convenience Store
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Convenience Store 01 A convenient and affordable store for everyday shopping Size of the Store. sq. m Overview Total size, 486 Routine shopping Food for t
Slide 22: Convenience Store Key Operating Statistics
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Convenience Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 5,169 Leased 4.4% 83% leased Increase YoY 17% ow
Slide 23: Supermarket
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Supermarket 01 Comfortable and affordable store for everyday and major shopping Size of the Store. sq. m Overview Total size, 4,276 Major shopping Special
Slide 24: Supermarket Key Operating Statistics
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Supermarket 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 943 Leased -0.4% 36% leased 64% owned Increase YoY 6-7
Slide 25: Drogerie Store
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Drogerie Store 01 Within walking distance to buy beauty and health products Magnit Cosmetic is #1 Health and Beauty Specialist retailer in Russia by sales
Slide 26: Drogerie Store Key Operating Statistics
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Drogerie Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 1,460 9.0% Leased 90% leased 10% owned Increase YoY
Slide 27: Format Summary
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Format Summary Size of the Store Average ticket LTM-sales density*, Sales LFL Ownership sq.m (excl. VAT), th RUB/ mix 1Q 2021 structure RUB sq.m/year Food
Slide 28: Other Small Formats and Pilots
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Other Small Formats and Pilots 01 City Pharmacy Discounters Magnit Go Small store offering ready-to-go / ready-to-eat Pharmaceutical & health care Discoun
Slide 29: Launch of E-commerce Across All Missions
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Launch of E-commerce Across All Missions FROM STATUS 2 in Krasnodar – pilot Superstore 40 in 20 regions – scaling in 2021 Stock-up (2 hours+) Dark Store 1
Slide 30: Online Delivery Already Has Good Traction
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Online Delivery Already Has Good Traction >8,600 2 avg. # of orders per day dark stores launched ~1,100 86 avg. ticket for all services1 cities in 53 regi
Slide 31: Private Label, Own Production & Direct Import as Differentiation Pillars
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Private Label, Own Production & Direct Import as Differentiation Pillars Private Label Own production Direct import Improve own brand portfolio to support
Slide 32: Own Production — from Field / Site to Shelf
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Own Production — from Field / Site to Shelf 32
Slide 33: Suppliers
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Suppliers 54% Suppliers 1,400 Federal Suppliers 5,700 Assortment Domestic Suppliers 46% 4,300 Local Suppliers Direct Import Private Label 7% International
Slide 34: Logistics System
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Logistics System North North Central Volga Southern Urals West Siberian Caucasus Total Centralization Ratio 1Q 2021 91% Distribution Delivered from DC Cen
Slide 35: Employees
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Employees 315,698 Headcount of Employees 33,370 254,241 Distribution 10,664 Regional In-store branches 12,606 Head Office Other formats Super- markets Dro
Slide 36: OMNI / Digital Transformation
OMNI / Digital Transformation Digital • OMNI Retail • Magnit Future Ecosystem Services • Fundamental Re-Org • Integration of Scalable Industrial Solutions
Slide 37: Digital — Important Across All Steps of a Consumer Journey
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Digital — Important Across All Steps of a Consumer Journey 1 2 3 4 5 Pre-shopping In-store E-grocery Payment Post-shopping experience experience • Loyalty
Slide 38: OMNI Retail is at the Core of Magnit's Future Ecosystem
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix OMNI Retail is at the Core of Magnit’s Future Ecosystem We aim to build an ecosystem Magnit brand at the center with multi-format & omni-channel offering…
Slide 39: All Magnit Future Ecosystem Services within a Single Super App
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix All Magnit Future Ecosystem Services within a Single Super App Ecosystem Loyalty services Digital card Magnit Pay Personal promo Magnit Mobile Partnership
Slide 40: We Already Started a Fundamental Re-Org of Core IT
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix We Already Started a Fundamental Re-Org of Core IT Detailed 12-month tech reorg plan and KPIs have been developed, team is assembled and ready to go Own d
Slide 41: Integration of Scalable Industrial Solutions
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Integration of Scalable Industrial Solutions ERP / HCM F&R WMS TMS Enterprise Resource Forecast & Warehouse Transportation Planning / Human Replenishment
Slide 42: Operating and Financial Results
Operating and Financial Results Quarterly Operating Highlights • Summary Profit & Loss Revenue & Costs • Gross Margin & EBITDA • Balance Sheet Debt Portfolio • Working Capital • CAPEX Analysis • Free Cash Flow
Slide 43: Quarterly Operating Highlights
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Quarterly Operating Highlights Return to parent slide 1 Net retail sales, RUB bln 2 Number of visits, mln 3 Selling space, th. sq. m 4 LTM - sales density
Slide 44: Summary Profit & Loss
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Summary Profit & Loss RUB mln IAS 17 IFRS 16 2019 2020 YoY growth 2019 2020 YoY Growth Net sales 1,368,705 1,553,777 13.5% 1,368,705 1,553,777 13.5% Cost
Slide 45: Revenue & Costs
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Revenue & Costs Revenue SG&A Expense Structure Dynamics YoY growth, % % % RUB bln 1,553.8 RUB bln of sales of SG&A 1,368.7 13.5% Total 318.2 20.5% 100.0%
Slide 46: Gross Margin & EBITDA
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Gross Margin & EBITDA IAS 17 IFRS 16 Gross 74 b.p. Margin Bridge, 23.9% 22.8% 0.7% 0.1% 23.5% 23.5% As % of revenue Transport YoY growth Trading margin -4
Slide 47: Balance Sheet
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Balance Sheet RUB mln ASSETS 2019 2020 EQUITY AND LIABILITIES 2019 2020 Property plant and equipment 352,986 336,513 Equity 188,533 182,889 Right-of-use a
Slide 48: Debt Portfolio
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Debt Portfolio Low Currency Risk Debt Level Dynamics, Debt portfolio maturity* No loans denominated in foreign currency RUB bln RUB bln Short-term debt Lo
Slide 49: Working Capital
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Working Capital 1 2 Target for 2020–2025 Projects to improve stock days Improvement Cross-functional collaboration of supply • Optimize package size of wo
Slide 50: Working Capital
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Working Capital 3 4 Projects to improve Structural influencing payment days and factors overdue receivables • New SQM addition — new stores have lower sal
Slide 51: CAPEX Analysis
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix CAPEX Analysis 2020 2019 RUB mln RUB mln Total 31,990 58,607 Machinery and equipment 12,841 (40%) Construction in progress and buildings 13,690 (43%) Othe
Slide 52: Free Cash Flow
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Free Cash Flow (13,385) 2019, (14,071) Working Capital RUB mln Analysis (2,897) (58,607) 43 1,440 (1,337) (29,993) (17,846) Average Days Adjusted Change N
Slide 53: Corporate Governance
Corporate Governance Corporate Governance Overview • Best in Class Retail Management Team • Guidance For FY 2021
Slide 54: Corporate Governance Overview
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Corporate Governance Overview Board Committees Overview Status Independent Non-Executive CEO Non-Executive Director Director Charles Pat James Timothy Jan
Slide 55: Best in Class Retail Management Team
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Best in Class Retail Management Team Highly experienced retail leadership team — long on local Russian expertise Jan Anna Andrey Maria Ruslan Dmitry Flori
Slide 56: Guidance for FY 2021
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Guidance for FY 2021 Number of Store Openings (all ~2,000 formats, gross) Refurbished Stores (all ~700 formats) CAPEX RUB 60–65 bn 56
Slide 57: Appendix
Appendix Russian Macro Environment • Russian Food Retail Market Potential • Top-10 Russian Food Retailers • Convenience Store • Supermarket Drogerie store • Quarterly Operating Data Summary
Slide 58: Russian Macro Environment
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Return to parent slide Real GDP in 4Q 2020 substantially improved to -- Inflation remains supportive for retailers. Food In 4Q 2
Slide 59: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Russian Food Retail Market Potential Return to parent slide 1 Grocery retail market, 2 Modern VS Traditional 3 Market Share, % 4 Share of TOP-5 retail cha
Slide 60: Top-10 Russian Food Retailers
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Top-10 Russian Food Retailers Return to parent slide X5 12.8% Magnit 10.9% DKBR 6.6% 39.5% Lenta 2.7% 34.5% Share of TOP-10 Auchan 1.5% Svetofor 1.3% Shar
Slide 61: Convenience Store
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Convenience Store Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2019 2020
Slide 62: Supermarket
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Supermarket Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2019 2020 2021
Slide 63: Drogerie Store
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Drogerie Store Return to parent slide Net retail sales Selling space LTM - sales density* LFL RUB mln th sq. m th RUB/sq.m/year YoY growth, % 2019 2020 20
Slide 64: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Quarterly Operating Data Summary RUB bln 1Q 2019 2Q 2019 3Q 2019 4Q 2019 FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 SALES TOTAL 317.2 340.7 3
Slide 65: Contact Information
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation 1Q 2021 Operating and Financial Results Corporate Governance Appendix Contact Information Magnit Investor Relations Team magnitIR@magnit.ru magnit.com/en twitter.com/magnitIR 15/2 Solnechnaya Street. Krasnodar, 350072, Russi