Shufersal Ltd Class B · TASE:SAE
Shufersal Ltd Class B — Q2 2021 Earnings Presentation
34 slides from Shufersal Ltd Class B's earnings presentation, August 2021
Slide 1: Company Presentation Q2 2021
Company Presentation Q2 2021 August 2021
Slide 2: Disclaimer
Disclaimer This Presentation was prepared by Shufersal Ltd. (the “Company”). This presentation does not constitute an offering for the purchase or sale of the Company’s securities nor an invitation to receive said proposals, rather is solely intended for the provision of information. The information
Slide 3: Shufersal At a Glance
Shufersal At a Glance Founded in 1957 Three main segments(1): as Israel’s 1st modern supermarket, • Retail c-94% of sales Shufersal is the leading and largest • Retail stores food retailer in the country • Online • Private label • Finance • B2B Wide range of retails formats catering • Be (Pharma) c-
Slide 4: Shufersal – Major Anchors
Shufersal – Major Anchors Retail Customer Financial Organizational & Base Stability Human Capital 4
Slide 5: Shufersal Group
Shufersal Group Discount format Urban format Core activity Growth engines Anchors Additional activities 5
Slide 6: Favorable Macro-Economic Environment
Favorable Macro-Economic Environment Young and Growing Population(1) (mn) Stable Macro Environment with Controlled Inflation 50% of Population Storenext Food Retail Market Index(2) CAGR: 1.8% Below Age 30 15.2 Over 65 1.1% CAGR: 1.0% 1.9% 12% 11.1 0-14 0.6% 9.3 28% 7.1 0.2% 9.3mn 30-64 38% 14-29 -0.
Slide 7: Change in sales and CPI (StoreNext Food Market)
Change in sales and CPI (StoreNext Food Market) FMCG, Jan.- Jun. 2021 compared to Jan. - Jun. 2020 -0.1% CPI Change -2.9% -745 NIS in million Total decrease -2.8% in turnover Real change 7
Slide 8: Growth Strategy
Growth Strategy Growing online penetration; and a developing marketplace offering Establishment of two automatic online shipping centers- the first (Kadima) will be operational in mid-August Online Highly revenue synergetic Private Growing contribution with expansion into pharma, Be Label stronger m
Slide 9: Shufersal H1 2021 – Key Metrics
Shufersal H1 2021 – Key Metrics NIS 15.2bn 10.7% -2.9% Revenue 12m EBITDA Margin HoH Decrease in Same Store Sales c. 20% 20.6% 26.8% Food Retail Market Share(1) Online Share(2) Private Label Share(2) 301 Shufersal Stores 652k NIS 2.6B 89 Be Stores Cardholders Property Owned Value c. 16,300 NIS 6.9bn
Slide 10: Shufersal has shown tremendous growth and profitability in Q2 2021
Shufersal has shown tremendous growth and profitability in Q2 2021 QoQ growth Revenue EBITDA -2.8% Decrease of +7% Growth of NIS 102 million NIS 25 million Op. profit Net profit +11% Growth of +21% Growth of NIS 18 million NIS 17 million 10
Slide 11: Shufersal has shown tremendous growth and profitability in H1 2021
Shufersal has shown tremendous growth and profitability in H1 2021 HoH growth Revenue EBITDA -0.9% Decrease of +8% Growth of NIS 69 million NIS 60 million Op. profit Net profit +13% Growth of +24% Growth of NIS 45 million NIS 41 million 11
Slide 12: Retail
RETAIL
Slide 13: Same store sales – Retail
Same store sales – Retail 13.4% 8.6% 4.9% 3.2% 1.7% 0.2% 0.4% -0.6% (1) H1-2021 -3.0% Increase in same store sales Increase in same store sales vs. H1 2019 w/o covid-19 impact - estimates Increase in same store sales vs. H1 2019 with covid-19 impact 13 (1) Vs H1-2020
Slide 14: Strong and Steady Performance Across All Retail KPIs
Strong and Steady Performance Across All Retail KPIs Sales per sqm(1) Total Retail Revenues Avg. Commercial space (K NIS) (NISbn) per store(2) (K sqm) 27.9 27.6 14.4 14.3 1.78 1.73 12.6 24.7 24.8 12.2 1.68 1.67 LTM LTM LTM Q2-2021 Q2-2021 Q2-2021 (1) Shufersal stores, including online sales, excludi
Slide 15: Shufersal Online: Israel’s #1 E-commerce Website
Shufersal Online: Israel’s #1 E-commerce Website 1. Shufersal Online Overview #1 Market Share Outpacing Competitors… • Pioneered retail shift to online in Israel with 1st version of Shufersal Online website and application in 2013 • 1st mover advantage allows to maintain clear leadership • Nationwid
Slide 16: Consistent Expansion of Private Label
Consistent Expansion of Private Label 2018 2019 2020 H1.2021 Strategic Target % of sales 24.0 25.2 25.8 26.8 30.0 % % % % % Sales (NISbn) 3.3 3.9 3.0 1.9 • Meat • Ice creams • Deli salads • Ice Cream • Consistently expanding • Diapers • Gluten free products • Cleaning supplies • Baget into new categ
Slide 17: Shufersal B2B Tapping into Fragmented Wholesale Market
Shufersal B2B Tapping into Fragmented Wholesale Market Cash & Carry “Rural & Urban Region” • Opened 1st store in 2018, targeting urban mini- • Providing solutions for groceries in rural markets, kiosks and food service customer. Over 10K communities, “kibbutzim” and urban groceries. points of sale.
Slide 18: Israel’s Largest Retailer Club
Israel’s Largest Retailer Club Retailer Club Overview Growth Levers • #1 Loyalty programme with over 2mn members • Leverage Shufersal’s retail footprint in order to recruit new members • Retailer club offers unique discounts and benefits to members • Provide attractive non-bank credit offering • Gat
Slide 19: Be
Be —_—_—_— a SHUFERSAL
Slide 20: Be – Expansion into Pharma, Cosmetic and Toiletry
Be – Expansion into Pharma, Cosmetic and Toiletry 2017 2018 2019 2020 2021 • Acquisition of • Rebranding to Be • Consolidating • Continued growth • Add thousands STRATEGIC New Pharm chain • Conception of growth in same- in same-store sales of items to the TARGET • Provider of pharma strategic plan s
Slide 21: Be – Expansion into Pharma, Cosmetic and Toiletry (Cont’d)
Be – Expansion into Pharma, Cosmetic and Toiletry (Cont’d) Rapidly Growing Segment Number of Stores Revenue (NISmn) Operating Profit (NISmn) Total 26 31 33 30 35 k sqm 15.1% H1-2020 H1-2021 28.3% 73 83 86 81 89 815 11.7% 3 708 552 393 439 -19 -14 -29 -70 H1-2020 H1-2021 H1-2020 H1-2021 H1 2021 same
Slide 22: Real Estate
REAL ESTATE
Slide 23: Shufersal Real Estate
Shufersal Real Estate Segment Overview Owns 94 income-producing assets: c.70% of GLA are Shufersal stores, mainly commercial and offices c. 30% are leased to third parties • Consistently improving KPIs with 197K sqm with 97% occupancy Segment income derived from rental rate as of 2020 fees and manag
Slide 24: Financials
FINANCIALS ——__— SHUFERSAL
Slide 25: Robust Financial Performance
Robust Financial Performance Revenue (NISmn) Operating Profit(1) (NISmn) 15,233 718 12,847 13,360 521 453 13% 381 7,420 7,351 336 5.2% -0.9% 3.9% 4.7% 4.5% 3.5% H1-2020 H1-2021 H1-2020 H1-2021 EBITDA (NISmn) Net Income (NISmn) 1,514 387 1,266 265 268 24% 8% 785 211 786 725 170 2.5% 2.9% 9.5% 9.9% 9.
Slide 26: Consistently Improving Profitability Across Segments
Consistently Improving Profitability Across Segments Retail Real Estate Be 7,005 89 91 439 1.6% 6,891 393 Revenue (NISmn) + % H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 3 280 Operating 254 % 74 76 Profit(1) (NISmn) + % -14 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 26 (1) Before other inco
Slide 27: Cash Flow Evolution
Cash Flow Evolution Capex Free Cash Flow(1) and Cash Conversion(2) (NISmn) (NISmn) 1,040 587 536 730 19 474 18 380 15 510 550 16 215 390 568 235 518 459 4 9 199 68.7% 364 50.6% 57.7% 211 226 25.3% 70.3% 70.1% (3) H1-2020 H1-2021 H1-2020 H1-2021 Purchase of PP&E Investment in Real Estate Total Commen
Slide 28: Exceptional Liquidity and Balanced Debt Profile
Exceptional Liquidity and Balanced Debt Profile Cap Table Future Bond Repayments(2) (NISmn) 401 404 423 381 369 362 (NIS in millions) 30.06.21 343 357 303 Non CPI Li nked Bonds 1,882 176 CPI Li nked Bonds 1,121 Total Debt 3,004 Ca s h & ST Inves tments (1,117) Net Debt 1,887 LTM Net Leverage exc. IF
Slide 29: Debt Levels that support the company's strategy
Debt Levels(1) that support the company's strategy (NISbn) Net Debt(2) Gross debt 3.1 3.0 2.9 3.0 2.6 2.5 2.4 2.2 2.1 1.9 2018 2019 2020 Net Debt* H1-2020 H1-2021 2018 2019 Gross 2020 debt* H1-2020 H1-2021 Note: excluding IFRS-16 liability (1) Liabilities to banking corporations, debentures, includi
Slide 30: Appendix
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Slide 31: Consolidated Income Statement
Consolidated Income Statement (1) (NISmn) H1 2018 H1 2019 H1 2020 H1 2021 Revenues 6,316 6,578 7,420 7,351 growth (%) 6.9% 4.1% 12.8% -0.9% Gross Profit 1,701 1,780 1,967 2,022 margin (%) 26.9% 27.1% 26.5% 27.5% Operating expenses (1,465) (1,513) (1,631) (1,641) Operating Profit 236 267 336 381 marg
Slide 32: Balance sheet (assets)
Balance sheet (assets) (NISmn) 30.06.2020 30.06.2021 Cash and cash equivalents, Short-term deposits 763 1,117 Trade receivables 1,433 1,449 Other receivables & Other investments 179 163 Inventory 986 945 Total Current Assets 3,361 3,674 Long-term deposits 400 Investments in associate 88 196 Other in
Slide 33: Balance sheet (liabilities and equity)
Balance sheet (liabilities and equity) (NISmn) 30.06.2020 30.06.2021 Current liabilities Current maturities in respect of bonds & Credit from 320 331 banks Current maturities of lease liabilities 350 375 Trade payables 2,187 2,178 Other payables and Provisions 1,044 1,157 Total Current liabilities 3
Slide 34: Thank You
THANK YOU