Magnit 1 q2015

INVESTOR PRESENTATION

1Q 2015 OPERATIONAL RESULTS published on April 22, 2015

2

Magnit at a Glance

Magnit at a Glance

As of March 31, 2015 Source: Company, Bloomberg, IFRS accounts for FY2014

2 180Cities & Towns

№1Russian Food RetailChain by Revenueand Number of Stores

10 120Total Numberof Stores

3 733thous.sq.m.Selling Space

28DCs

5 934Trucks

Multi-format Business ModelComprising Convenience, Hypermarkets,“Magnit Family” & Drogerie Stores

№3Retailer in Europein MarketCapitalization $24bn

MarketCapitalization >6%

Share in RussianGrocery Sector

Shareholder Structure as of FY2014

54,6%Free-float

37,6%Sergey Galitskiy, CEO

3,3%Other

4,5%Lavreno Ltd. (Cyprus)0,1

%

Source: IFRS accounts for FY2014, Company’s Estimates

Magnit at a GlanceKey Metrics

3

Guidance for 2015New Stores

764bn ($20bn)RevenueFY2014

6,25%

NetMargin

11,25%

EBITDAMargin

0,9

Net debt/LTM EBITDA

1 200ConvenienceStores 90

Hyper-markets 800

Drogerie Stores

28-32%

RUB SalesGrowth

9,5-11,0%

EBITDAMargin

RUB 65bn

Capex

P=

4

Magnit at a GlanceStrategy

Growth

Value Efficiency

Multi-format OrganicStore Growth

GeographicScope

Density of StoreCoverage

LowPrices

HighQuality

Assortment CostManagement

VerticalIntegration

Centralization

5

53

53%

47%

Discounters

25%

Super-markets

15%

Hyper-markets

13%

Traditional Stores

31%

Kiosks, Pavil-ions

6%

Open Markets

10%

Magnit at a GlanceRussian Food Retail Market

Market Composition by Format

$320bnMarketSizeFY 2014 % Modern

RetailPenetration

Non-Modern Modern

Source: Sberbank CIB Estimates for FY2014

6

Magnit at a GlanceMagnit vs Peers

*As of FY 2013Source: Companies, Infoline, Bloomberg, Magnit’s Estimates

Numberof Stores, eop 2014

Selling Spacethous. sq.m., eop 2014

RevenueRUB bn, eop 2014

Market CapUS$ bn, eop 2014

Market Share%, eop 2014

Magnit

X5

Dixy

Okey

Lenta

Auchan

Metro

9,711

5,483

2,195

108

132

85

80

3,591

2,572

747

552

701

789

619

763.5

633.9

229.0

152,0

194.0

287,4

183.2

21.5

3.3

0.8

1.2

2,9

6

5

2

1

2

2

2

Not public

Not public

*

*

*

*

Source: Company, as of March 31, 2015 7

1 239Drogerie Stores

8 581Convenience Stores

196Hypermarkets

104Magnit Family

28Distribution Centers

Operational OverviewGeographical Coverage

2 180Cities& Towns

7 FederalRegions

North Caucasu

s

Southern Volga North West

Urals SiberiaCentral


Operational OverviewLogistics System

10 120Total Numberof Stores

1 029thous.sq.m.Warehousing Space

28DCs

5 934Trucks

Central

Volga

Southern

Urals

North Caucasus

North West

Siberia

9

6

6

2

1

2

2

3157

2758

2039

1008

350

551

257

Centralization Ratio%

Magnit

Out-sourced

89

11

92

8

Convenience Stores

1Q2015

Magnit

Out-sourced

73

27

80

20

Hypermarkets

Source: Company, as of December 31, 2014 9

Operational OverviewSuppliers

5000DomesticSuppliers

4000Local Suppliers

1000Federal Suppliers

Assortment

55-60% 40-45%

10

Operational OverviewDirect Import

Source: Company, Direct Import - as of FY2014; Private Label – as of March 31, 2015

12

% Shareof Revenue579

PLSKUsM 86% Food

Items

Private Label

10 % International

Direct Import 860OpenContracts

11

Operational OverviewEmployees

Source: Company, as of March 31, 2015 *as of FY2014

258 629Employees

28 143AverageMonthlySalary ⃰� 9%

Wage RateIncrease ⃰�P=

186 089In-storePersonnel

42 717People Engagedin Distribution

19 720People in RegionalBranches

8 265People Employedby Head Office

1000 employees

Average Weighted Number of Employees – 230 627

1 838Other

12

Operational OverviewCompetitive Attributes

40 %

of FamilyBudgetSpent on Food

Location Quality(of Products)

Assortment Reliability AtmospherePrices

5 000People —MinimumPopulation

(1 500–1 600 Families)

4 000-9 500MonthlyFamily FoodBudgetP=

Overlap “Good”Cannibalization

Magnit #1

Magnit #2

500m

Competitor #1 Competitor #2

Competitor #3

500m

Sales Catchment Area

Source: Company’s Estimates

Convenience Store


Operational OverviewConvenience Store

452

sq.m.Total

321

sq.m.Selling Space

90% Food

10% Non-food

27% Owned

73% Leased

Format Description Key Operational Statistics OpeningSize of the Store Average Ticket Payback

Store Ownership Structure

Sales Mix

Traffictickets/sq.m./day

Sales Densitysales/sq.m./year

LFL 1Q2015 – 1Q2014,%

247,1P=$4,0

238 077P=$6 196

13,87

AverageTicket, RUB

0,17 Traffic

14,06

Sales

2,7

3 years

If Leased

If Owned

Cost of New Storeper sq.m. of Total Space, thousand RUB

Time to Maturity

6 months

4-6 years

Owned 42-108Leased 10-19

Hypermarket


Operational OverviewHypermarket

79% Food

21% Non-food

80% Owned

20% Leased

Format Description Key Operational StatisticsSize of the Store Average Ticket


Sales Mix



LFL 1Q2015 – 1Q2014,%

634,9P=$10,2

275 073P=$7 159

1,2

6 813

sq.m.Total

2 944

sq.m.Selling Space

14,38

AverageTicket, RUB

0,47 Traffic

14,91

Sales

OpeningPayback

6-9 years



8-15 months

Time to Maturity

S: up to 3 000M:

3 000-6 000

L: over 6 000

Magnit Family


Operational OverviewMagnit Family

2 243

sq.m.Total

1 117

sq.m.Selling Space

84% Food

16% Non-food

38% Owned

62% Leased



Sales Mix



LFL 1Q2015 - 1Q2014,%

459,6P=$7,4

371 659P=$9 673

2,1

6-9 years



8-15 months

15,23

AverageTicket, RUB

1,79 Traffic

17,29

Sales

Time to Maturity

Drogerie Store


Operational OverviewDrogerie Store

304

sq.m.Total

230

sq.m.Selling Space

100% Non-food

20% Owned

80% Leased



Sales Mix



LFL 1Q2015 – 1Q2014,%

277,2P=$4,5

104 643P=$2 724

9,97 AverageTicket, RUB

12,63

Traffic

23,86

Sales

1,1

3 years

If Leased

If Owned


Time to Maturity

6 months


4-6 years

21

Sizeof the Store

sq.m.

AverageTicket

TrafficTickets/

sq.m./day

DensitySales/

sq.m./year

SalesMix

LFL 1Q2015-1Q2014

%

Store Owner-

ship Structure

PaybackYears

Cost of New Store

per sq.m.of Total Space

Timeto Maturity

Months

• Total• Selling Space

• Food• Non-food

• Av.ticket• Traffic/ Sales

• Owned• Leased

20%80%

38%

62%

80%20%

27%73%

Operational OverviewFormat Summary

Source: Company, as of March 31, 2015; * Excludes selling space designated for leases

Hypermarket

DrogerieStore

MagnitFamily

2944*

Owned RUB 42-

108kLeased

RUB 10-19kP.247,1

$4,0

P.634,9$10,2

P.277,2$4,5

P.459,6$7,4

P.238 077$6 196

P.275 073$7 159

P.104 643$2 724

P.371 659$9 673

79%21%

1

84%16%

90%10%

Conveniencestore

6

8-15

6

8-15

3 (if leased)

6-9

3 (if leased)

6-9

4-6 (if owned)

4-6 (if owned)

13.87

14.38

9.97

15.23

0.17

0.47

12.63

1.79

14.06

14.91

23.86

17.29

OwnedRUB 65-111k

LeasedRUB 31-35k

OwnedRUB 31-96k

LeasedRUB 12-19k

OwnedRUB 81-108k

LeasedRUB 31-54k

22

Financial OverviewSummary P&L

SG&A is presented net of Depreciation & Amortization (except for Depreciation of production fixed assets which was included in the Cost of sales)Source: Audited IFRS accounts for 2013 – 2014Please note: there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals

RUB MM 2013 2014 2014 / 2013Y-o-Y Growth

Net sales 579,694.88 763,527.25 31.7%

Cost of sales (414,431.89) (543,006.69) 31.0%

Gross profit 165,262.99 220,520.56 33.4%

Gross margin, % 28.51% 28.88%

SG&A (101,729.77) (134,169.75) 31.9%

Other income/(expense) 1,178.76 (501.27) -142.5%

EBITDA 64,721.23 85,909.67 32.7%

EBITDA margin,% 11.16% 11.25%

Depreciation & Amortization (14,184.35) (17,609.67) 24.1%

EBIT 50,536.88 68,300.00 35.1%

Net finance costs (4,782.83) (6,273.47) 31.2%

Profit before tax 45,754.05 62,026.53 35.6%

Taxes (10,133.67) (14,340.69) 41.5%

Effective tax rate 22.15% 23.12%

Net income 35,620.38 47,685.84 33.9%

Net margin, % 6.14% 6.25%

Source: IFRS accounts for FY2012–2014 23

Financial OverviewRevenue & Costs

2012 2013 2014

0

5

10

15

20

25

30

35

26.5

28.5 28.9

10.6 11.2 11.3

5.6 6.1 6.3

Revenue DynamicsRUB bn

Net Income DynamicsRUB bn

Margin DynamicsSG&A Expense Structure

Revenue — 764 RUB bnGrossMargin

EBIDTAMargin

NetMargin

%

+29,2%

7,5% 14,5%

+31,7%+41,8%

+33,9%

LFLLFL

Sales Growth, RUB

Sales Growth, RUB

2012 2013 2014

449580

764

2012 2013 2014

2536

48

1,84 (0,37) ― Packaging & Raw Materials

2,23 (0,44) ― Repair & Maintenance

55,01 (10,93) ― Payroll & Related Taxes

1,93 (0,38) ― Taxes, Other than Income Tax

11,57 (2,30) ― Deprecation & Amortization

20,62 (4,10) ― Rent & Utilities

4,51 (0,90) ― Other

in SG&A,% in Revenue, %

2,29 (0,46) ― Advertising

20%

151 719 RUB mn

Source: IFRS accounts for FY2012 – 2014 24

GM2012

Trading Margin Transport Losses GM2013

Trading Margin Transport Losses GM2014

15

17

19

21

23

25

27

29

31

33

26.53

28.51 28.881.85 0.08 0.050.13 0.32 0.08

Financial OverviewGross Margin Bridge

EBITDA Margin Bridge

% of Sales

% of Sales

+198 b.p.

+37 b.p.

+60 b.p. +9 b.p.

EBIDTA2012

GrossMargin

Salaries Rent & Utilites

Other EBIDTA2013

GrossMargin

Salaries Rent & Utilites

Advertising Other EBIDTA2014

0

2

4

6

8

10

12

14

10.5611.16

11.25

1.970.37 0.291.01

0.35 0.010.11 0.28 0.18

Source: IFRS accounts for FY2013–2014 25

Financial OverviewFree Cash Flow

Working Capital Analysis

The Average Days Payable to Suppliers is 38 Days.

Inventory Management Days is 46 Days

Working Capital: RUB 6 927 mn as of 31.12.2014

RUB mn

2013

2014

Adjusted for loss from disposal of PPE, provision for doubtful receivables, foreign exchange gain, finance costs, gain on disposal of subsidiary and investment income

Calculated as additions + transfers of PP&E during the respective period

Does not include cash flow from financing activities

Adjust

ed

EBIDTA

Change in

Work

ing c

apital

Net Inte

rest

Paid

Taxe

s

Paid OCF

Capex

Other C

ash F

low

from

Inve

stin

g

Activ

ities

FCF

Paym

ent of D

ivid

ents

Other C

ash F

low

from

Fin

ancing

Activ

ities

CF

88,999

60,711

5,617

11,760

-9,330-6,433

-12,525

-55 936

-15 82521 968

842

65,358

44,624

-7,608 -6,521

-8,163-4,550

-8,021

-52 488 256

-9 545

10 632

26

Financial OverviewBalance Sheet

Source: Audited IFRS accounts for FY2012 - 2014Please note: there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals

RUB MM 2012 2013 2014

ASSETS

Property plant and equipment 158,752.58 195,158.25 232,968.80

Other non-current assets 3,948.69 5,762.40 6,043.82

Cash and cash equivalents 12,452.61 5,931.13 17,691.54

Inventories 41,025.62 56,095.41 81,475.66

Trade and other receivables 584.02 631.53 813.26

Advances paid 2,677.20 3,171.05 4,849.30

Taxes receivable 28.94 27.99 69.38

Short-term financial assets 876.66 1,150.64 475.18

Prepaid expenses 181.94 252.15 242.53

Income tax recoverable – – 131.86

TOTAL ASSETS 220,528.26 268,180.55 344,761.33

EQUITY AND LIABILITIES

Equity 99,235.71 126,162.14 143,651.62

Long-term debt 38,246.72 37,441.50 44,410.14

Other long-term liabilities 6,159.09 8,462.32 10,617.70

Trade and other payables 42,920.57 48,170.71 66,794.61

Short-term debt 25,121.90 36,319.76 51,256.67

Dividends payable 0.54 0.03 14,372.03

Other current liabilities 8,843.73 11,624.09 13,658.56

TOTAL EQUITY AND LIABILITIES 220,528.26 268,180.55 344,761.33

27

Financial OverviewCapex Analysis

Source: Company, as of December 31, 2014; Company’s Estimates

Construction in Progress & Buildings

Machinery & Equipment

Other Assets Land

36 297 11 553 5 156 2 930

FY 2014

RUB 56 bn

FY 2015 (plan)

RUB 65 bn

RUB 500 mn

Hypermarkets Distribution Centres

Convenience Stores

Acquisition & Construction of Conv.Stores

Buy-out of Leased Conv.Stores

Greenhouses Land for HyperMarkets

Store Renovation

Maintenance Drogerie Stores

90 5 1 200 800

25 000 9 000 8 000 5 000 2 000 4 000 5 000 2 000 1 000 4 000

Source: IFRS accounts for FY 2012 - 2014 28

2012 2013 2014

63,369

73,761

95,667

50,916

67,83077,97538,247

37,441 44,410

Net Debt

Long-term Debt

%

Financial OverviewDebt Burden

2012 2013 2014

0

2

4

6

8

10

12

14

11.7

13.0 12.9

2012 2013 2014

0

0.5

1

1.5

2

1.11

0.9

Debt Level Dynamics RUB mn

Credit Metrics Credit Profile

EBIDTA / Finance Expenses

Net Debt / LTM EBITDA

The Company Hasan Impeccable Credit History

Collaboration with

the Largest Banks

Low Debt Burden:Net Debt / EBITDA Ratio of 0,9

No Currency Risk: 100%of Debt is Rub DenominatedMatching Revenue Structure

No Interest Rate Risk:Interest Payments are Madeat Fixed Rates

39,6%49,2%

53,6%

46% of Debt is Long-term

Approximately 35%of LT Debt is Rub Bonds

29

Contact InformationContact Information

Timothy PostHead of Investor Relations

+7 (961) [email protected]://ir.magnit.com

15/2 Solnechnaya StreetKrasnodar, 350072Russian Federation

Date post:	15-Aug-2015
Category:	Data & Analytics
Upload:	magnit-ir-team
View:	260 times
Download:	0 times

Magnit 1 q2015

Data & Analytics