Magnit · RUS:MGNT
Magnit — Non-Deal Roadshow (February 2018)
24 slides from Magnit's roadshow presentation, February 2018
Slide 1: Results of 2017, Priorities for 2018
Results of 2017 Priorities for 2018 1
Slide 2: Highlights of 2017
Highlights of 2017 Growth: • Improved Customer Value Proposition (CVP) Opened a record number of Convenience stores: 1,825 • Distinguished CVP for hypermarkets and Magnit Family gross stores Profitability: • Launched Magnit Family stores in a new concept Magnit remains one of the most profitable pub
Slide 3: Results of 2017
Results of 2017 Revenue bn RUR +6,4%, YoY Earnings surprises Forecasted Actual 346 325 328 326 Food inflation* 4,6% 1,1% 303 306 305 291 Competition New stores of main competitors, which overlap with Magnit stores 1 250 2 548 1Q16 2Q 3Q 4Q 1Q17 2Q 3Q 4Q Total Magnit Convenience stores, which overlap
Slide 4: Expansion Highlights
Expansion Highlights 120 mln 66 2 /3 Expansion in selling space in 2017 Russians served Regions Of the Russian by Magnit store network of presence territory New store New store Total num. Moscow, openings openings of stores south-western Gross Net EOP district Convenience stores 1 825 1604 12 125 Hy
Slide 5: Guidance for 2018
Guidance for 2018 Openings gross Convenience stores 1 500 7-9% Sales growth Y-o-Y Refurbishments 1 200 Drogerie stores Positive 700 incl. pharmacies LFL sales Hypermarkets 5 by 3Q18 Magnit Family 15 5
Slide 6: CAPEX Priorities for 2018
CAPEX Priorities for 2018 55bn RUR 40% Store openings 22% Store refurbishments 20% Vertical integration 13% Logistics system 5% IT and digital 6
Slide 7: Priorities for 2017–2018
Priorities for 2017–2018 1. Accelerate profitable growth Attract new customers 2. Retain existing customers Improve the overall brand image 3. Keep focus on efficiency 4. Improve the in-store atmosphere Launch redesign 5. Build effective marketing, in order meet customer expectations 6. Create and d
Slide 8: Expansion Overview
Expansion Overview 8
Slide 9: Expansion Priorities
Expansion Priorities Strategic goals Actions Expand to new regions Remain the largest retail chain • 12% of new store openings in new regions of Siberia in Russia by geographic scope (Krasnoyarsk Krai, Khakassia, Altay , Novosibirsk region, Kemerovo region and Tomsk region) Act as a logistics operat
Slide 10: Convenience Store Overview
Convenience Store Overview 10
Slide 11: Convenience Store Overview
Convenience Store Overview Fresh products. Everyday shopping missions. Close to home at the lowest prices. 846 bn RUB Key Categories Revenue in 2017 74% 89% Fresh Dairy Sausages Share of format in Share of food Magnit’s revenue in sales 53% 326 m 2 Share of refurbished Average selling Vodka Confecti
Slide 12: Convenience Store Priorities
Convenience Store Priorities Strategic goals Actions • Focus on fresh products through incentives, equipment, Lead in share of fresh among pricing, increased stock and supply competitors • Unify assortment for store clusters Offer lower prices for key • Adjust product range depending on location (co
Slide 13: Hypermarket Overview
Hypermarket Overview 13
Slide 14: Hypermarket Overview
Hypermarket Overview Compact hypermarket on the way home. Medium purchase with the minimum time spent. 146 bn RUB Key Categories Revenue 2017 13% 80% Fresh Meat Seafood Cheese Share of format in Share of food Magnit’s revenue in sales 5 2 887 m 2 Spirits Baby care Culinary Laundry New store openings
Slide 15: Hypermarket Priorities
Hypermarket Priorities Strategic goals Actions • Open test hypermarket in a new concept in the Ser ve as the nearest 2nd half of 2018 hypermarket to shopper • Adapt assortment to local preferences Maintain perception of the cheapest hypermarket in • Increase density of products per sq.m. Russia • In
Slide 16: Family Supermarket Overview
Family Supermarket Overview 16
Slide 17: Family Supermarket Overview
Family Supermarket Overview Convenient supermarket with favorable prices, comfortable customer service and the best offer for fresh products. 60 bn RUB Key Categories Revenue 2017 5% 84% Fresh Meat Prepared food Bakery Share of format in Share of food Magnit’s revenue in sales 15 1 101 m 2 Wine Beer
Slide 18: Family Supermarket Priorities
Family Supermarket Priorities Strategic goals Actions • Roll-out the new concept and refurbishment of existing Differentiate from Family supermarkets hypermarkets by acting as a value supermarket • Adapt assortment depending on location Ensure convenient and • Work-out distinctive strategy for seaso
Slide 19: Drogerie store Overview
Drogerie store Overview 19
Slide 20: Drogerie store Overview
Drogerie store Overview All necessary health, home, and beauty goods within walking distance 79 bn RUB Key Categories Revenue Make-up Pet food Laundry 7% + Share of format in Magnit’s revenue 700 230 m 2 Baby care Hygiene Skin care Pharmacy New store openings Average selling (gross) in 2018 space 20
Slide 21: Drogerie store Priorities
Drogerie store Priorities Strategic goals Actions • Integrate pharmacies into drogerie stores Work-out the concept of drogerie store combined • Enlarge exclusive assortment and brands in cosmetics, with pharmacy hygiene, baby care products Differentiate ser vice through • Extend product range and in
Slide 22: Efficiency Opportunities
Efficiency Opportunities 22
Slide 23: Efficiency Opportunities
Efficiency Opportunities Construction costs Staff costs Reducing costs for new store Increasing personnel productivity. openings (including refurbishment) Attraction of supplier’s merchandisers. Utilities expenses Cost Shrinkage costs Implementation of energy- leadership efficient technologies Logis
Slide 24: Strategic Projects
Strategic Projects Private labels Differentiation of entry-price and value for money brands Net Promoter Score (NPS) measurement Focus on friendly service Loyalty program Vertical integration Production facilities and agriculture Talent development 24