2. Magnit at a Glance
Magnit at a Glance
As of June 30, 2015
Source: ⃰ as of FY2014, Company, Bloomberg, IFRS accounts for FY2014 2
2 233Cities & Towns
№1
Russian Food Retail
Chain by Revenue
and Number of Stores
10 728Total Number
of Stores
3 928thous.sq.m.
Selling Space
29DCs
5 926Trucks
Multi-format Business Model
Comprising Convenience, Hypermarkets,
“Magnit Family” & Drogerie Stores
№2
Retailer in Europe
in Market
Capitalization $26bnMarket
Capitalization
>6%Share in Russian
Grocery Sector ⃰
Shareholder Structure as of FY2014
54,6%
Free-float
37,6%
Sergey Galitskiy, CEO
3,3%
Other
4,5%
Lavreno Ltd. (Cyprus)0,1%
3. Magnit at a Glance
Key Metrics
3
Source: Management accounts for 1H2015,
Company’s Estimates,
* as of FY2014
New Stores
455bn 30,3%
Revenue
1H 2015
5,55%
Net
Margin
10,69%
EBITDA
Margin
0,9*
Net debt/
LTM EBITDA
1 350
Convenience
Stores
90
Hyper-
markets
950
Drogerie
Stores
26-28%
RUB Sales
Growth
10,5-11,3%
EBITDA
Margin
RUB 65bn
Capex
P=
Revenue growth
Y-o-Y
Guidance for 2015
4. Magnit at a Glance
Strategy
4
Growth
Value Efficiency
Multi-format Organic
Store Growth
Geographic
Scope
Density of Store
Coverage
Low
Prices
High
Quality
Assortment Cost
Management
Vertical
Integration
Centralization
6. Magnit at a Glance
Magnit vs Peers
6
Source: As of FY 2014; Companies, Infoline, Bloomberg, Magnit’s Estimates
Number
of Stores
Selling Space
thous. sq.m.
Revenue
RUB bn
Market Cap
US$ bn
Market Share
%
9,711
5,483
2,195
108
132
85
80
Magnit
X5
Dixy
Okey
Lenta
Auchan
Metro
3,591
2,572
747
552
701
789
619
763.5
633.9
229.0
152,0
194.0
338,0
210,0
21.5
3.3
0.8
1.2
2,9
6
5
2
1
2
3
2
Not public
Not public
7. 1 527Drogerie Stores 70 335 365 436 153 130
38
8 890Convenience Stores
201Hypermarkets
110Magnit Family
29Distribution Centers
4 29 20 38 6 9 4
7 57 34 59 12 27
5
337
1,573 2,336 2,734 843 797
270
Operational Overview
Geographical Coverage
7Source: Company, as of June 30, 2015
2 233 Cities
& Towns
7 Federal
Regions
North
Caucasus
Southern Volga North
West
Urals SiberiaCentral
1 6 9 7 2 2 2
8. Operational Overview
Logistics System
8Source: Company, as of June 30, 2015
10 728Total Number
of Stores
1 078thous.sq.m.
Warehousing Space
29DCs
5 926Trucks
9
7
6
2
1
2
2
Central
Volga
Southern
Urals
North Caucasus
North West
Siberia
3375
2904
2104
1105
358
588
294
405.002
221.236
207.195
94.357
40.799
73.601
35.438
Centralization Ratio
%
Magnit
Outsourced
90
10
92
8
Convenience Stores
1H2015 Future Targets
Magnit
Outsourced
73
27
80
20
Hypermarkets
10. Operational Overview
Direct Import
10
Source: Company,
Direct Import - as of FY2014,
Private Label – as of June 30, 2015
11%Share
of Revenue
587
PL
SKUs
M 85%Food
Items
Private Label
10%International
Direct Import
860
Open
Contracts
11. Operational Overview
Employees
11
Source: Company,
as of June 30, 2015,
*as of FY2014
259 766
Employees
28 143
Average
Monthly
Salary ⃰
9% Wage Rate
Increase ⃰
P=
187 273In-store
Personnel
41 115
People Engaged
in Distribution
20 706People in Regional
Branches
8 617People Employed
by Head Office
1000 employees
Average Weighted Number of Employees – 230 928
2 055Other
12. Operational Overview
Competitive Attributes
12
40%of Family
Budget
Spent on Food
Location Quality
(of Products)
Assortment Reliability AtmospherePrices
5 000
People —
Minimum
Population
(1 500–1 600 Families)
4 000-9 500
Monthly
Family Food
Budget
P=
Overlap “Good”
Cannibalization
Magnit #1
Magnit #2
500m
Competitor #1 Competitor #2
Competitor #3
500m
Sales Catchment Area
Source: Company’s Estimates
14. Operational Overview
Convenience Store
14Source: Company, as of June 30, 2015
454
sq.m.
Total
322
sq.m.
Selling Space
90% Food
10% Non-food
27% Owned
73% Leased
Format Description Key Operational Statistics Opening
Size of the Store Average Ticket Payback
Store Ownership Structure
Sales Mix
Traffic
tickets/sq.m./day
Sales Density
sales/sq.m./year
LFL 1H2015 – 1H2014,%
244,0P=
$4,3
238 077P=
$6 196
12,06
Average
Ticket, RUB
-0,15
Traffic
11,89
Sales
2,8
3 years
If Leased
If Owned
Cost of New Store
per sq.m. of Total Space, thousand RUB
Time to Maturity
6 months
4-6 years
Owned 42-108
Leased 10-19
16. Operational Overview
Hypermarket
16Source: Company, as of June 30, 2015
80% Food
20% Non-food
79% Owned
21% Leased
Format Description Key Operational Statistics
Size of the Store Average Ticket
Store Ownership Structure
Sales Mix
Traffic
tickets/sq.m./day
Sales Density
sales/sq.m./year
LFL 1H2015 – 1H2014,%
620,5P=
$10,8
275 073P=
$7 159
1,2
6 770
sq.m.
Total
2 934
sq.m.
Selling Space
10,16
Average
Ticket, RUB
-1,36
Traffic
8,66
Sales
Opening
Payback
6-9 years
Cost of New Store
per sq.m. of Total Space, thousand RUB
Owned 65-111
Leased 31-35
8-15 months
Time to Maturity
S: up to 3 000
M: 3 000-6 000
L: over 6 000
18. Operational Overview
Magnit Family
18Source: Company, as of June 30, 2015
2 230
sq.m.
Total
1 116
sq.m.
Selling Space
85% Food
15% Non-food
37% Owned
63% Leased
Format Description Key Operational Statistics Opening
Size of the Store Average Ticket Payback
Store Ownership Structure
Sales Mix
Traffic
tickets/sq.m./day
Sales Density
sales/sq.m./year
LFL 1H2015 – 1H2014,%
448,7P=
$7,8
371 659P=
$9 673
2,2
6-9 years
Cost of New Store
per sq.m. of Total Space, thousand RUB
Owned 81-108
Leased 31-54
8-15 months
9,82
Average
Ticket, RUB
-0,91
Traffic
8,82
Sales
Time to Maturity
20. Operational Overview
Drogerie Store
20Source: Company, as of June 30, 2015
300
sq.m.
Total
229
sq.m.
Selling Space
100% Non-food
17% Owned
83% Leased
Format Description Key Operational Statistics Opening
Size of the Store Average Ticket Payback
Store Ownership Structure
Sales Mix
Traffic
tickets/sq.m./day
Sales Density
sales/sq.m./year
LFL 1H2015 – 1H2014,%
272,1P=
$4,7
104 643P=
$2 724
12,21
Average
Ticket, RUB
11,32
Traffic
24,92
Sales
1,1
3 years
If Leased
If Owned
Cost of New Store
per sq.m. of Total Space, thousand RUB
Time to Maturity
6 months
Owned 31-96
Leased 12-19
4-6 years
21. Size
of the Store
sq.m.
Average
Ticket
Traffic
Tickets/
sq.m./day
Density
Sales/
sq.m./year
Sales
Mix
LFL 1H2015-
1H2014
%
Store Owner-
ship Structure
Payback
Years
Cost of New
Store
per sq.m.
of Total Space
Time
to Maturity
Months
• Total
• Selling Space
• Food
• Non-food
• Av.ticket
• Traffic/ Sales
• Owned
• Leased
17%
83%
37%
63%
79%
21%
27%
73%
Operational Overview
Format Summary
21Source: Company, as of June 30, 2015; * Excludes selling space designated for leases
Hypermarket
Drogerie
Store
Magnit
Family
454
6,770
300
2,230
322
2934*
229
1,116
Owned
RUB 42-108k
Leased
RUB 10-19k
2.8
1.2
1.1
2.2
P.244,0
$4,3
P.620,5
$10,8
P.272,1
$4,7
P.448,7
$7,8
P.238 077
$6 196
P.275 073
$7 159
P.104 643
$2 724
P.371 659
$9 673
80%
20%
100%
85%
15%
90%
10%
Convenience
store
6
8-15
6
8-15
3 (if leased)
6-9
3 (if leased)
6-9
4-6 (if owned)
4-6 (if owned)
12.06
10.16
12.21
9.82
-0.15
-1.36
11.32
-0.91
11.89
8.66
24.92
8.82
Owned
RUB 65-111k
Leased
RUB 31-35k
Owned
RUB 31-96k
Leased
RUB 12-19k
Owned
RUB 81-108k
Leased
RUB 31-54k
22. Financial Overview (1H2015 reviewed financial results will be released in August 26-28, 2015)
Summary 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 – 2014
Please note: there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals
22
RUB MM 2013 2014
2014 / 2013
Y-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%
23. Financial Overview (1H2015 reviewed financial results will be released in August 26-28, 2015)
Revenue & Costs
23Source: IFRS accounts for FY2012–2014
26.5
28.5 28.9
10.6 11.2 11.3
5.6 6.1 6.3
0
5
10
15
20
25
30
35
2012 2013 2014
Revenue Dynamics
RUB bn
Net Income Dynamics
RUB bn
Margin DynamicsSG&A Expense Structure
Revenue — 764 RUB bn
Gross
Margin
EBIDTA
Margin
Net
Margin
%
+29,2%
7,5% 14,5%
+31,7%
+41,8%
+33,9%
LFLLFL
Sales Growth, RUB
Sales Growth, RUB
449
580
764
2012 2013 2014
25
36
48
2012 2013 2014
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
24. 26.53
28.51
28.88-0.081.85 0.08 0.05 0.13 0.32
15
17
19
21
23
25
27
29
31
33
GM
2012
Trading Margin Transport Losses GM
2013
Trading Margin Transport Losses GM
2014
Financial Overview (1H2015 reviewed financial results will be released in August 26-28, 2015)
Gross Margin Bridge
24Source: IFRS accounts for FY2012 – 2014
EBITDA Margin Bridge
% of Sales
% of Sales
+198 b.p.
+37 b.p.
+60 b.p.
+9 b.p.
10.56
11.16 11.25
-1.01
-0.35 -0.01
-0.11
-0.28 -0.18
1.97
0.37 0.29
0
2
4
6
8
10
12
14
EBIDTA
2012
Gross
Margin
Salaries Rent & Utilites Other EBIDTA
2013
Gross
Margin
Salaries Rent & Utilites Advertising Other EBIDTA
2014
25. Financial Overview (1H2015 reviewed financial results will be released in August 26-28, 2015)
Free Cash Flow
25Source: IFRS accounts for FY2013–2014
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
88,999
60,711
5,617
11,760
-9,330
-6,433
-12,525
-55 936
-15 825
21 968
842
Adjusted
EBIDTA
Change in
Working capital
Net Interest
Paid
Taxes
Paid
OCF Capex Other Cash
Flow
from Investing
Activities
FCF Payment of
Dividents
Other Cash
Flow
from Financing
Activities
CF
65,358
44,624
-7,608 -6,521
-8,163
-4,550
-8,021
-52 488 256
-9 545 10 632
26. Financial Overview (1H2015 reviewed financial results will be released in August 26-28, 2015)
Balance Sheet
Source: Audited IFRS accounts for FY2012 - 2014
Please note: there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals 26
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 Overview (1H2015 reviewed financial results will be released in August 26-28, 2015)
Capex Analysis
27Source: 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 1 350 950
25 000 9 000 8 000 5 000 2 000 4 000 5 000 2 000 1 000 4 000
28. 63,369
73,761
95,667
50,916
67,830
77,975
25,122
36,320
51,257
38,247
37,441
44,410
2012 2013 2014
Net Debt
Short-term Debt
Long-term Debt
%
Financial Overview (1H2015 reviewed financial results will be released in August 26-28, 2015)
Debt Burden
28Source: IFRS accounts for FY 2012 - 2014
11.7
13.0 12.9
0
2
4
6
8
10
12
14
2012 2013 2014
1.1
1
0.9
0
0.5
1
1.5
2
2012 2013 2014
Debt Level Dynamics
RUB mn
Credit Metrics Credit Profile
EBIDTA / Finance Expenses
Net Debt / LTM EBITDA
The Company Has
an 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 Denominated
Matching Revenue Structure
No Interest Rate Risk:
Interest Payments are Made
at Fixed Rates
39,6%
49,2%
53,6%
46% of Debt is Long-term
Approximately 35%
of LT Debt is Rub Bonds
29. Contact Information
Contact Information
29
Timothy Post
Head of Investor Relations
+7 (961) 511-7678
post@ir.magnit.com
http://ir.magnit.com
15/2 Solnechnaya Street
Krasnodar, 350072
Russian Federation
