Magnit · RUS:MGNT
Magnit — Q4 2021 Earnings Presentation
61 slides from Magnit's earnings presentation, Feb 4, 2022
Slide 1: Investor Presentation 4Q 2021 Results
Investor Presentation 4Q 2021 RESULTS
Slide 2: Disclaimer
Russian Market Overview Strategy Magnit Today 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 or on behalf of the Certain statements
Slide 3: Magnit at a Glance
Russian Market Overview Strategy Magnit Today 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 26,077 8,997 45 5,435 Total Number Selling Space, Distribution Trucks p
Slide 4: Geographical Coverage
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Geographical Coverage North North Caucasus Southern Central Volga West Urals Siberian Total 3,898 Cities & Towns Convenience Stores 476 2 523 4 394 4 302 1 855 1 630 1 010 16 190 7 Magnit Fede
Slide 5: Operating Highlights
Russian Market Overview Strategy Magnit Today 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 growth, % 1 808 26 077 1 510 8 997 20 725 2
Slide 6: Financial Performance
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Financial Performance Core Concise Profit & Loss achievements 1H 2019 1H 2020 1H 2021 YoY Sales, bn Rub 657.9 763.4 822.2 +7.7% Gross margin, % 23.6 23.5 23.4 (0.1)pp Improvement of sales dens
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 Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Macro environment provides further scope for consolidation – supportive for strong players Real GDP improved in 4.3% 2.5% 3Q2021 due to the gradual Real food retail s
Slide 9: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today 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 Modern retail market 4 Growth is coming ret
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 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 keep improving Continuous focus We foc
Slide 12: Our Strategy at a Glance
Russian Market Overview Strategy Magnit Today 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, best in NPS1 Smart expansion in core for
Slide 13: Dixy Acquisition: Potential Synergies
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Dixy Acquisition: Potential Synergies Commerce Operations • Procurement thanks to combined sourcing • New effective solutions for overlapping stores on a case- • Private label production, dire
Slide 14: Dixy Acquisition: Integration Management Focused on Synergies
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Dixy Acquisition: Integration Management Focused on Synergies Dixy Operates as a Separate Business Organizational Structure Post-acquisition New joint committees Integration management office
Slide 15: Dixy Acquisition: Integration Plan & Timeline
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Dixy Acquisition: Integration Plan & Timeline Phase 1: Learning & Quick Wins Phase 2: Capturing Value Phase 3: New Organization Until 01 Jan 2022 Until 01 Jan 2023 After 2H’22-1H’23 Timing • L
Slide 16: Sustainability Strategic Framework
Russian Market Overview Strategy Magnit Today 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% Best in class Employer #1 in environmental on the quality responsible
Slide 17: 2025 Sustainability Commitments
Russian Market Overview Strategy Magnit Today 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 labels and own production packaging be rec
Slide 18: 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 19: Magnit Umbrella Brand — Consumer Missions and Formats
Russian Market Overview Strategy Magnit Today 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 ventures matters is close to you Focus
Slide 20: Magnit Convenience Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit Convenience Store 01 A convenient and affordable store for everyday shopping 3D-tour Size of the Store. sq. m Overview Total size, 485 Routine shopping Food for tonight / now Selling sp
Slide 21: Magnit Convenience Store 02
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit Convenience Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 5,635 Leased 10.7% 84% leased Increase YoY 16% owned 3-4 years CAPEX th RUB Ave
Slide 22: Magnit Supermarket
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit Supermarket 01 Comfortable and affordable store for everyday and major shopping 3D-tour Size of the Store. sq. m Overview Total size, 4,314 Major shopping Special occasion Selling space
Slide 23: Magnit Supermarket 02
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit Supermarket 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 937 Leased -0.4% 46% leased 54% owned Increase YoY 6-7 years Average ticket Number of
Slide 24: Magnit Drogerie Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance 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
Slide 25: Magnit Drogerie Store 02
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit Drogerie Store 02 Key operating statistics Store openings Selling space, thousand sq. m Payback period 1,604 12.3% Leased 92% leased 8% owned Increase YoY 2-3 years CAPEX th RUB sq. m o
Slide 26: Other Small Formats and Pilots
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Other Small Formats and Pilots City Pharmacy Discounters Magnit Go Small store offering ready-to-go / ready-to-eat Pharmaceutical & health care Discounter store offering A kiosk offering ready
Slide 27: Dixy Convenience Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Dixy Convenience Store A convenient and affordable store for everyday shopping Key operating statistics Selling space, thousand sq. m 718 Size of the Store, sq. m 92% leased Total size, 575 8%
Slide 28: Megamart Superstore
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Megamart Superstore Comfortable and affordable store for everyday and major shopping Key operating statistics Selling space, thousand sq. m 75 Size of the Store, sq. m 33% leased Total size, 5
Slide 29: Roll-Out of E-commerce Across All Missions
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Roll-Out of E-commerce Across All Missions Missions Magnit Own Partners Delivery Express Express (~60 mins) Casual small purchase Regular Stock-up (2 hours+) Big ticket purchase E-Pharma E-Pha
Slide 30: Online Delivery Already Has Good Traction
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Online Delivery Already Has Good Traction >62,000 20 avg. # of orders per day dark stores launched 1,074 301 avg. ticket across all online services1 cities in 64 regions served ~74,000 SKUs 69
Slide 31: Private Label, Own Production & Direct Import as Differentiation Pillars
Russian Market Overview Strategy Magnit Today 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 to provide exclusive goods with bette
Slide 32: Own Production — from Field / Site to Shelf
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Own Production — from Field / Site to Shelf 32
Slide 33: Suppliers
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Suppliers Suppliers Direct Import 1,400 Federal Suppliers 7% International Direct Import (Annual Average) 54% 750 Open 5,700 Assortment Contracts Domestic Suppliers 46% Private Label 4,300 16%
Slide 34: Logistics System
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Logistics System North North Central Volga Southern Urals West Siberian Caucasus Total Centralization Ratio 4Q 2021 91% Distribution Delivered from DC Centers 14 10 8 5 4 3 1 45 9% 652 Direct
Slide 35: Employees 357 thousand
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Employees 357 thousand Headcount of Employees 39 Distribution 289 9 Regional In-store branches 15 Head Office 4 Other Dixy Mega- Super- Drogerie Convenience formats mart markets Stores Stores
Slide 36: 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 37: Quarterly Operating Highlights
Russian Market Overview Strategy Magnit Today 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*, th. RUB/sq.m/year 8 997 Net retail
Slide 38: Summary Profit & Loss
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Summary Profit & Loss RUB mln IAS 17 IFRS 16 1H 2020 1H 2021 YoY growth 1H 2020 1H 2021 YoY Growth Net sales 763,361 822,230 7.7% 763,361 822,230 7.7% Cost of sales -583,840 -629,660 7.8% -583
Slide 39: Revenue & Costs
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Revenue & Costs Revenue SG&A Expense Structure Dynamics % % YoY growth, % RUB bln of sales of SG&A RUB bln 822,2 Total 168,0 20,4% 100,0% 763,4 7.7% Staff costs 75,4 9,2% 44,9% Rent 35,3 4,3%
Slide 40: Gross Margin & EBITDA
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Gross Margin & EBITDA IAS 17 IFRS 16 Gross -10 b.p. Margin Bridge, 23,6% 23,5% -0,0% 23,4% 23,4% As % -0,1% of revenue Transport YoY decrease Trading margin -9 b.p. 1H 2019 1H 2020 1H 2021 1H
Slide 41: Balance Sheet
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Balance Sheet RUB mln ASSETS 2020 1H 2021 EQUITY AND LIABILITIES 2020 1H 2021 Property plant and equipment 336,125 333,038 Equity 182,889 181,798 Right-of-use assets 308,445 312,774 Long-term
Slide 42: Debt Portfolio
Russian Market Overview Strategy Magnit Today 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 265.5 265.5 Long-term debt 1.8 Bonds Low
Slide 43: Working Capital
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Working Capital 1 2 Target for 2020–2025 Initiatives to improve stock days Improvement Cross-functional collaboration of working capital of supply chain, operations • Optimize package size and
Slide 44: Working Capital
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Working Capital 3 4 Initiatives to improve payment Structural influencing factors days and overdue receivables • New SQM addition — new stores have lower sales density during ramp up stage • O
Slide 45: CAPEX Analysis
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix CAPEX Analysis 1H 2021 1H 2020 RUB mln RUB mln Total 25,563 12,289 Machinery and equipment Construction in progress and buildings Other assets Please note: there may be small variations in cal
Slide 46: Free Cash Flow
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Free Cash Flow 1H 2020, Working Capital RUB mln Analysis 53,993 (28,777) (6,512) (4,269) 14,434 (12,289) 3 122 (14,453) 23,579 12 248 38 Average Days 976 Adjusted Change Net Taxes OCF EBIDTA i
Slide 47: Corporate Governance
Corporate Governance Corporate Governance Overview • Best in Class Retail Management Team • Guidance For FY 2022
Slide 48: Shareholder Structure
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation Operating and Financial Results Corporate Governance Appendix Shareholder Structure Information on persons who hold, dispose of votes accounted for and/or are beneficiaries of PJSC “Magnit” shares1 3,9% JSC Tander3 0,2% Mana
Slide 49: Corporate Governance Overview
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Corporate Governance Overview Board Committees Overview Status Independent Non-Executive Director Non-Executive Director Charles Naira Tim Jan Walter Alexey Vsevolod James Alexander Pierre- Se
Slide 50: Best in Class Retail Management Team
Russian Market Overview Strategy Magnit Today OMNI / Digital Transformation Operating and Financial Results Corporate Governance Appendix Best in Class Retail Management Team Highly experienced retail leadership team — long on local Russian expertise Jan Dunning Anna Bobrova Andrey Bodrov Francesco
Slide 51: Guidance for FY 2022
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Guidance for FY 2022 Number of Store Openings (all formats, gross) >2,000 Refurbished Stores (all formats) ~900 On-line GMV, RUB bn >2.0x CAPEX RUB 80–85 bn 51
Slide 52: 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 53: Russian Macro Environment
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Russian Macro Environment Return to parent slide Real GDP improved in 3Q2021 due to the gradual Inflation remains supportive for retailers. Real disposable incomes recovered on people getting
Slide 54: Russian Food Retail Market Potential
Russian Market Overview Strategy Magnit Today 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 chains, % USD bn Retail 100% China 1 328,
Slide 55: Top-10 Russian Food Retailers
Russian Market Overview Strategy Magnit Today 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% Share of TOP-5 Russian food retailers Met
Slide 56: Magnit Convenience Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit 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 2021 YoY growth, % YoY growth,
Slide 57: Magnit Supermarket
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit 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 YoY growth, % YoY growth, % Q 1
Slide 58: Magnit Drogerie Store
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Magnit 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 2021 1 2 3 4 1 2 3 4 1 2 3 4 YoY
Slide 59: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Quarterly Operating Data Summary RUB bln 4Q 2019 FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 SALES TOTAL 368.2 1,368.7 376.0 387.3 383.2 407.2 1,553
Slide 60: Quarterly Operating Data Summary
Russian Market Overview Strategy Magnit Today Operating and Financial Results Corporate Governance Appendix Quarterly Operating Data Summary 4Q 2019 FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 LFL sales growth 0.1% 0.4% 7.8% 7.2% 6.9% 7.5% 7.4% 4.1% 5.2% 8
Slide 61: Contact Information
Russian Market Overview Strategy Magnit Today 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, Russian Federation