Investor Presentaiton
4
Converting Earnings Growth Into Strong
Cash Flow Generation Profile...
Comments
■ Strong conversion of EBITDA into Operating Cash Flow and
Free Cash Flow
Limited working capital financing needs due to attractive payment terms /
long payables, and improved inventory turnover in 2017
Decrease in financing expense on the back of deleveraging and
decreasing interest rates
■ Disciplined capex focused on store openings and selective investments in
IT & infrastructure; limited maintenance capex requirements
Strong Cash Conversion and Returns on Capital
72%
64%
60%
Cash Flow (RUBm)
DETSKY MIR
RETAIL
CHAIN
2013
2014
2015
2016
2017
Adjusted EBITDA²
2,771
4,463
6,185
8,203
10 663
Changes in NWC
(93)
(1,640) (4,300)
(362)
(1,123)
Cash Income Taxes Paid
(477)4
(657)
(1,190)
(1,468)
(1,523)
Net Finance Expense Paid
(507)
(795)
(1,879)
(1,813)
(1,645)
Other Operating Cash Flow
331
121
505
1,285
708
79%
77%
Operating Cash Flow
2,025
1,492
(679)
5,844
7,080
88%
78%
56%
61%
86%
Capital Expenditure
DC Construction
(772)
(1,945) (5,308)
(1,747)
(2,468)
(330) (2,842)
Store Openings, IT &
Maintenance
(772)
(1,615)
(2,465) (1,747) (2,468)
2013
2014
Adj. ROIC¹
2015
2016
2017
▪ (Adj. EBITDA LTM - Adj. Capex LTM) / Adj. EBITDA LTM
Source: The Group's consolidated financial statements for 2013 under US GAAP and 2014-2017 under IFRS. For the line items and the
years presented, there was no difference between the calculation of numbers or presentation under US GAAP and IFRS.
Calculated as operating profit LTM, adjusted for the effect of disposal of Yakimanka building in 2014 and LTI bonus payments, incl.
Income received from partial termination of employees' right to receive shares under the LTI program, divided by average capital invested.
Capital invested is calculated as Net Debt plus total equity/(deficit) minus amounts receivable under a loan granted to CJSC "DM-Finance"
and, for the year ended 31 December 2015, the net book value of the building occupied by the Bekasovo distribution centre and its
equipment (which was completed in 2015, but was not operational for most of 2015).
Free Cash Flow
1,253
(453)
(5,987)
4,097
4,612
2 Adj. EBITDA is calculated as profit for the year before income tax, FX gain/loss, gain on acquisition of controlling
interest in associate, impairment of goodwill, net finance expense, D&A, adjusted for the one-off effect relating to
disposal of the Yakimanka building in 2014, as well as share-based compensation and cash bonuses under the LTI
program
3 Adjusted for one-off items.
4 Calculated as Income tax expense plus deferred tax income benefit
23View entire presentation