Shufersal Ltd Class B · TASE:SAE
Shufersal Ltd Class B — Q3 2021 Earnings Presentation
34 slides from Shufersal Ltd Class B's earnings presentation, November 2021
Slide 1: Company Presentation Q3 2021
Company Presentation Q3 2021 November 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 1.0% 1.1% 15.2 Over 65 CAGR: 1.9% 12% 11.1 0-14 9.3 28% 0.6% 7.1 0.5% 9.3mn 30-64 0.2% 38% 14-2
Slide 7: Change in sales and CPI (StoreNext Food Market)
Change in sales and CPI (StoreNext Food Market) FMCG, Jan.- Sep. 2021 compared to Jan. - Sep. 2020 +0.5% CPI Change -2.9% -745 NIS in million Total decrease -3.4% 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) started a running process during Q3.2021 Online Highly revenue synergetic Private Growing contribution with expansion into pharma, Be Label str
Slide 9: Shufersal 1-9.2021 – Key Metrics
Shufersal 1-9.2021 – Key Metrics NIS 15.0bn 10.6% -3.7% Revenue 12m EBITDA Margin Decrease in Same Store Sales c. 20% 19.9% 26.5% Food Retail Market Share(1) Online Share(2) Private Label Share(2) 302 Shufersal Stores 660k NIS 2.6B 91 Be Stores (3) Cardholders Property Owned Value (6) c. 16,700 NIS
Slide 10: Shufersal has shown growth in profitability in Q3-2021
Shufersal has shown growth in profitability in Q3-2021 QoQ growth Revenue 3.8 BN EBITDA 399 -3.6% Decrease of +6% Growth of NIS 141 million NIS 23 million (1) (2) Op. profit 186 Net profit 82 +3% Growth of -15% Decrease of NIS 6 million NIS 15 million (1) Before other income & expenses. (2) The decr
Slide 11: Shufersal has shown tremendous growth and profitability in 1-9.2021
Shufersal has shown tremendous growth and profitability in 1-9.2021 Jan.- Sep. 2021 compared to Jan. - Sep. 2020 Revenue 11.2 BN EBITDA 1,184 -1.8% Decrease of +7% Growth of NIS 210 million NIS 81 million (1) (2) Op. profit 567 Net profit 293 +10% Growth of +10% Growth of NIS 51 million NIS 26 milli
Slide 12: Retail
RETAIL
Slide 13: Same store sales – Retail
Same store sales – Retail 13.4% 7.9% 4.9% 3.8% 1.7% 0.2% 0.4% -0.6% (1) -4.0% Increase in same store sales Increase in same store sales vs. 1-9.2019 w/o covid-19 impact - estimates Increase in same store sales vs. 1-9.2019 with covid-19 impact 13 (1) Vs 1-9.2020
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 14.4 27.2 14.1 1.78 1.73 12.6 24.7 24.8 12.2 1.67 1.67 LTM LTM LTM Q3-2021 Q3-2021 Q3-2021 (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 1-9.2021 Strategic Target % of sales 24.0 25.2 25.8 26.5 30.0 % % % % % Sales (NISbn) 3.3 3.9 2.8 3.0 • Meat • Ice creams • Deli salads • Shampoo • Consistently expanding • Diapers • Gluten free products • Cleaning supplies • Baget into new catego
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 (1) Number of Stores Revenue (NISmn) Operating Profit (NISmn) Total 26 31 33 33 35 15.1% k sqm 28.3% 16.6% 815 6 86 91 708 609 710 73 83 85 552 -29 -19 -19 -70 2018 2019 2020 1-9.2020 1-9.2021 Q3 2021 same store sales
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 95% occupancy Segment income derived from rental rate as of Q3 2021 fees and ma
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 11,362 567 11,152 521 516 453 10% 4.7% 5.1% -1.8% 3.9% 4.5% 3.5% EBITDA (NISmn) Net Income (NISmn) 1,514 1,266 387 1,103 1,184 7% 293 265 268 267 786 10% 9.5% 9.9% 9.7% 10.6% 2.5% 2.6% 6.1% 2.1% 2.0% 2.
Slide 26: Consistently Improving Profitability Across Segments
Consistently Improving Profitability Across Segments Retail Real Estate Be 10,718 10,409 135 139 710 -2.9% 609 Revenue +16.6% (NISmn) +3.0% 1-9.2020 1-9.2021 1-9.2020 1-9.2021 1-9.2020 1-9.2021 6 Operating 387 6.2% 411 114 115 Profit(1) 3 % (NISmn) + % -19 1-9.2020 1-9.2021 1-9.2020 1-9.2021 1-9.202
Slide 27: Cash Flow Evolution
Cash Flow Evolution Capex Free Cash Flow(1) and Cash Conversion(2) (NISmn) (NISmn) 1,040 831 587 730 761 19 536 474 18 380 15 342 353 16 10 390 8 568 518 459 199 68.7% 364 334 343 50.6% 57.7% 25.3% 69.0% 70.2% (3) Purchase of PP&E Investment in Real Estate Total Commentary • Disciplined capex policy
Slide 28: Exceptional Liquidity and Balanced Debt Profile
Exceptional Liquidity and Balanced Debt Profile Cap Table Future Bond Repayments(2) (NISmn) 402 405 424 382 370 364 (NIS in millions) 30.09.2021 359 329 303 Non CPI Li nked Bonds 1,883 176 CPI Li nked Bonds 1,142 Total Debt 3,025 Ca s h & ST Inves tments (1,598) Net Debt 1,427 LTM Net Leverage exc.
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 3.3 3.0 2.9 3.0 2.6 2.5 2.2 2.1 2.1 1.4 2018 2019 2020 Net Debt* 1-9.2020 1-9.2021 2018 2019 Gross 2020 debt* 1-9.2020 1-9.2021 Note: excluding IFRS-16 liability (1) Liabilities to banking corporations, debentures, inc
Slide 30: Appendix
——__— SHUFERSAL
Slide 31: Consolidated Income Statement
Consolidated Income Statement (1) (NISmn) 1-9.2018 1-9.2019 1-9.2020 1-9.2021 Revenues 9,620 10,021 11,362 11,152 growth (%) 7.8% 4.2% 13.4% -1.8% Gross Profit 2,578 2,711 2,996 3,047 margin (%) 26.8% 27.1% 26.4% 27.3% Operating expenses (2,227) (2,306) (2,480) (2,480) Operating Profit 350 405 516 5
Slide 32: Balance sheet (assets)
Balance sheet (assets) (NISmn) 30.09.2020 30.09.2021 Cash and cash equivalents, Short-term deposits 1,114 1,598 Trade receivables 1,738 1,566 Other receivables & Other investments 186 179 Inventory 1,018 913 Total Current Assets 4,056 4,256 Long-term deposits 350 Investments in associate 87 210 Othe
Slide 33: Balance sheet (liabilities and equity)
Balance sheet (liabilities and equity) (NISmn) 30.09.2020 30.09.2021 Current liabilities Current maturities in respect of bonds & Credit from 338 347 banks Current maturities of lease liabilities 353 387 Trade payables 2,495 2,426 Other payables and Provisions 1,338 1,377 Total Current liabilities 4
Slide 34: Thank You
—_—_—_— a SHUFERSAL