X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Merger or Acquisition (November 2009)
16 slides from X5 Corporate Center's merger presentation, Nov 25, 2009
Slide 1: Acquisition of Paterson Supermarket Chain
Acquisition of Paterson Supermarket Chain 25 November 2009 p. 1
Slide 2: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as an advertisement of securities, an offer or invitation to sell or issue or the solicitation of an offer to buy or acquire or subscribe for securities of X5 Retail Group N.V. or any of its subsidiaries or
Slide 3: Strategic, Operational & Financial Upside
Strategic, Operational & Financial Upside Paterson Acquisition Provides X5 with Strong Value Enhancement Opportunities Reinforces X5 positions in supermarkets… Strategic … by securing high quality locations… Fit …in key geographical markets Most Paterson stores are highly compatible with X5’
Slide 4: Transaction Overview
Transaction Overview Description Acquisition of 100% ownership of Paterson retail business and property Equity value: USD 189.5 mln Transaction Value Net Debt: no more than RUR 2,467.5 bln (approximately USD 85 mln) Enterprise Value: USD 275 mln 100% cash payment for equity Transaction A
Slide 5: Paterson Overview
——— =PEKPECTOK fi Paterson) OVenView PEKPECTSK Grins p.5
Slide 6: Paterson Overview: Business Highlights
Paterson Overview Business Highlights Privately-owned company founded in 1997 Majority of stores located in the Central region of Russia − As at 30 September 2009, Paterson operates 82 stores, including: • Moscow and the region: 37 stores • St. Petersburg: 11 stores • Tatarstan: 9 stores • 25 re
Slide 7: Paterson Overview: Financial Highlights
Paterson Overview Financial Highlights Net Sales RUR mln Net Sales(1): − 2008: RUR 13.2 bln 13,249 10,968 − 12M to Sep-09(2): RUR 11.0 bln 2008 (F) 12M to Sep-09 (F) Adjusted EBITDA(3): EBITDA & EBITDA Margin(3) − 2008: RUR 784 mln RUR mln 7.4% % 5.9% (EBITDA margin 5.9%) − 12M to Sep-09: RUR 81
Slide 8: Paterson Stores are Highly Compatible with X5 Requirements
Paterson Overview Paterson Stores are Highly Compatible with X5 Requirements Estimated Format Split for Paterson Stores Integration(1) Supermarkets Soft Discounters # of Selling Space, # of Selling Space, # of Selling Space, Location Stores sq.m. Stores sq.m. Stores sq.m. Moscow & the region 37 27,4
Slide 9: Strategic Step Up in Supermarkets
Strategic Step Up in Supermarkets… … in Key Geographic Markets(1) + 8 Paterson # of Stores as at 30.09.09 Net Retail Sales (FY 2008) St. Petersburg stores USD mln Moscow 262(1) 3,052 (2) Perekrestok: 20 stores Central Perekrestok: 81 stores 2,702 Perekrestok: 120 stores 210 North-West +14 Paterson +
Slide 10: Complementary Addition of Discounters
Complementary Addition of Discounters(1) +8 Paterson stores +3 Paterson stores Moscow Pyaterochka: 195 stores St. Petersburg +16 Paterson +4 Paterson Moscow Pyaterochka: 224 stores stores stores Central Pyaterochka: 398 stores North-West Urals Pyaterochka: 288 stores Pyaterochka:144 stores Privolzhs
Slide 11: Strong Operational Fit
Strong Operational Fit Opportunity to Leverage X5’s Scale, Operational Excellence and Supply Chain Infrastructure Virtually all Paterson stores are reachable by 13 Paterson X5 logistics infrastructure - supply stores X5 DC locations as at centralization to improve from 0% to over 30 September 2009
Slide 12: Strong Financial Upside
Strong Financial Upside Area of Focus Expected Synergy Benefits Improvement in sales per sq.m of existing Paterson stores through ─ Rebranding, including layout and equipment upgrades, publicity Sales campaigns & promos ─ Change in pricing and assortment policies in line with Perekrestok and Pyate
Slide 13: Substantial Upside in Sales per Square Meter
Substantial Upside … … in Sales per Square Meter Paterson Supermarkets(1) vs Perekrestok Paterson Discounters(1) vs Pyaterochka Annualized Sales Traffic per sq.m Average Check Annualized Sales Traffic per sq.m Average Check per sq.m (RUR) (RUR) per sq.m (RUR) (RUR) 397,563 384,045 800 1,123 361 569
Slide 14: Performance Improvement Roadmap
Performance Improvement Roadmap 12 Months to Sep-09(1) 2010 2011 ▲Early benefits of re-branding ▲Sales per sq.m. normalizing at ▲Competitive pricing to drive sales Perekrestok and Pyaterochka Net Sales density levels 10,968 (RUR mln) ▼Short-term closing of stores for re- branding, integration and IT
Slide 15: Preliminary Integration Timetable
Preliminary Integration Timetable December Q1 2010 Q2 2010 2009 1 Change in operational control 3 Staff assessment 4 Integration of purchasing functions 5 Integration of logistics 6 Staff training 7 IT platform replacement(1) 8 Stores rebranding & re-launch(1) (1) May require up to 4 weeks closings
Slide 16: Strategic, Operational & Financial Upside
Strategic, Operational & Financial Upside Paterson Acquisition Provides X5 with Strong Value Enhancement Opportunities ~20% increase in Moscow & the region Reinforces X5 positions in supermarkets… supermarket count Strategic ~40% increase in St. Petersburg … by securing high quality location
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