X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Investor Presentation (January 2011)
31 slides from X5 Corporate Center's investor presentation, January 2011
Slide 1: Accelerating Growth – Investor Presentation
Accelerating Growth Investor Presentation Januaryy 2011
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: Agenda
Agenda I. Introduction II. Milestone Quarter, Record Year III. Kopeyka Acquisition – Building on X5’s Success in Discounters IV. Strategic Efficiency Program Update V. 2011 Outlook VI. Appendix 3
Slide 4: X5 - #1 Russia's Retailer
X5 - #1 Russia’s Retailer X5 R Retail t il G Group ttoday d # Company FY 2009 Net % % in Total Retail Sales in Top-10 Market (4) • FY 2010 consolidated(1) RUR net retail sales grew 24% to (USD mln)(3) RUR 342 bln bl or 30% iin USD tterms tto USD 11 11.2 2 bln; bl X5 + Kopeyka 10,445(5) 31.7% 5.3% •
Slide 5: X5 Multi-Format Approach
X5 Multi Multi--Format Approach X5 O Operates t StStores ffor E Every Lif Lifestyle t l and d Family F il Budget B d t Soft Discounters Net selling space: from 300 to 800 sq.m. A Average assortment: t t 3,000 3 000 SKU SKUs Pricing policy: Lowest price in the market on 100% of assortment Format stre
Slide 6: X5's Strategic Priorities
X5’s Strategic Priorities • Build multi-format • Build supply chain success advantages • Cash generation • Strengthen value • Drive D i efficiency ffi i and d • Focus on returns propositions margins • Liquidity • Drive LFL and top • Ensure support for management line growth long-term growth Customer
Slide 7: Agenda
Agenda I. Introduction II. Milestone Quarter, Record Year III. Kopeyka Acquisition – Building on X5’s Success in Discounters IV. Strategic Efficiency Program Update V. 2011 Outlook VI. Appendix 7
Slide 8: Milestone Quarter, Record Year
Milestone Quarter, Record Year X5 delivered on FY 2010 Outlook with RUR net sales growth of 24%, or 22% excluding initial Kopeyka contribution • FY 2010 consolidated(1) retail sales grew 24% in RUR (30% in USD) 2010 Net Retail Sales (1) • Q4 2010 net retail sales increased 35% yyear-on-year y in RUR
Slide 9: Recovery Supported by Macro Trends
Recovery Supported by Macro Trends M Macroeconomic T d (1) i Trends I fl ti Inflation i (1) Dynamics D 40 4.4% 5% 15% 4.2% 11.7% 3.6% 3.6% 4% 12% 30 11.6% 3% 9% 8.0% 2.3% 9.6% 20 6.8% 6.0% 5.5% 2% 6% 5.0% 5.5% 6.0% 5.4% 10 21.8 5.4% 4.5% 19.3 14.5 15.5 17 1 17.1 1% 3% 4 5% 4.5% 8.7 9.7 10.9 3.2% 7.1
Slide 10: Q4 2010 LFL Results
Q4 2010 LFL Results Q4 2010 LFL Sales Up 10% on Healthy Discounters and Improving Supermarkets • Soft discounters achieved 13% LFL growth in Q4 2010 Supermarkets’ Q4 2010 LFL Performance against last year’s high comparable base Based on RUR- RUR denominated gross sales • Supermarkets improved strong
Slide 11: Record Selling Space Expansion
Record Selling Space Expansion Record Organic g Store Openings p p y (1) Acquisition g and Kopeyka q Added Nearly y 1,100 , Stores for 2010 In Q4 2010 Number Of Stores, EoP 45 • Net 179 stores or 84 th. sq.m. of selling space added organically: 301 71 – 160 soft ft di discounters t 2,012 – 12 superm
Slide 12: Strengthened Regional Presence
Strengthened Regional Presence North-West region Moscow & the Region Net Retail Sales 2010: Net Retail Sales 2010: USD 2,789 mln USD 5,696 mln Breakdown: Breakdown: 55% Discounters 68% Discounters S P St. Petersburg b 33% Supermarkets As at 31 December 2010, 2010 X5 Retail Group was 9% Supermarkets
Slide 13: … And Distribution Infrastructure
… And Distribution Infrastructure Th Company's The C ' supply l centralization t li ti ratet totaled t t l d 70% for f 2010 ((versus iinitial iti l target of 67%) Region # of DCs 000 sq. m. Dry Fruit & Veg Veg. Fresh Frozen Non-Food Central 8 149.7 v v v v DC locations as at North West North-West 5
Slide 14: Q3 & 9M 2010 Financial Performance
Q3 & 9M 2010 Financial Performance(1) Net Sales EBITDA & EBITDA Margin USD mln EBITDA, USD mln EBITDA Margin, % 7 7% 7.7% 8 4% 8.4% 7.4% 7.6% 24% 28% 20% 17% 2,614 7,798 2,103 6,081 194 593 162 509 Q3 2009 Q3 2010 9M 2009 9M 2010 Q3 2009 Q3 2010 9M 2009 9M 2010 Gross Profit Net Profit / (Loss) Gross
Slide 15: Agenda
Agenda I. Introduction II. Milestone Quarter, Record Year III. Kopeyka Acquisition – Building on X5’s Success in Discounters IV. Strategic Efficiency Program Update V. 2011 Outlook VI. Appendix 15
Slide 16: Kopeyka – Strong Retail Operator
Kopeyka – Strong Retail Operator Strong Retail Operator... Russia’s 3rd largest soft discounter with ~ 660 stores(1) 20% Private Label penetration High in-store in store productivity Advanced IT systems on SAP platform Well developed franchising model Strong & professional management tea
Slide 17: Powerful Strategic Fit
Powerful Strategic Fit K Kopeykak Acquisition A i iti Adds Add to t X5’s X5’ Organic O i Strategy St t for f Leadership, L d hi Growth G th and d Value for Shareholders – Building on X5 Discounters’ Phenomenal Success Area of Focus Rationale Undisputed leader in discounters by far leaving behind n
Slide 18: Preliminary Integration Timetable
Preliminary Integration Timetable 2 2011-2012 2015 and after 2013-2014 1 Integration of purchasing functions Integration of 2 logistics 3 Staff training Rebranding and 4 re-launch of stores 5 IT platform integration 6 Early benefits of integration 7 Full impact of synergies 18
Slide 19: Performance Improvement Roadmap
Performance Improvement Roadmap 2011-2012 2013-2014 2015 and after ▲Early benefits of re-branding, ▲Benefits of re-branding ▲Sales per sq.m. mainly for regional stores ▲Competitive pricing to drive sales normalizing at levels close rebranded first density to X5 stores Net Sales ▼Short-term closing o
Slide 20: Transaction Financing
Transaction Financing Description Acquisition A i iti off 100% ownership hi off K Kopeyka k retail t il b business i and d property t Enterprise Value: RUR 51.5 bln Transaction Value Net N D Debt: b lless than h RUR 16.5 16 bln bl 100% cash ppayment y for equity q y Transaction T ti All cu
Slide 21: Agenda
Agenda I. Introduction II. Milestone Quarter, Record Year III. Kopeyka Acquisition – Building on X5’s Success in Discounters IV. Strategic Efficiency Program Update V. 2011 Outlook VI. Appendix 21
Slide 22: Strategic Efficiency Program
Strategic Efficiency Program …Impacts I t Every E Area A off X5’ X5’s B Business, i tto C Create t NNew C Competitive titi AdAdvantages t Support of Working g L Long-Term T Sales Cost Capital Scalable Growth Savings Project Improvement Expansion Efficient Supply Chain Management IT Systems Integrati
Slide 23: Progress Report
Progress Report X5’ multi- X5’s multi lti-year Strategic St t i Efficiency Effi i Program P has h made d good d progress in i 2010 IT Systems Integrated Supply In-Store Labour Asset Business Processes Transformation Chain Logistics Productivity Efficiency Improvement • Installed and fully • X5 reach
Slide 24: Agenda
Agenda I. Introduction II. Milestone Quarter, Record Year III. Kopeyka Acquisition – Building on X5’s Success in Discounters IV. Strategic Efficiency Program Update V. 2011 Outlook VI. Appendix 24
Slide 25: 2011 Outlook
2011 Outlook 2011 Outlook O tl k Gross sales to exceed RUR 500 billion (inclusive of VAT) representing top-line growth of approx. 40%. We expect this increase to be driven by organic RUR net sales growth in the low 20 percent range on a higher base compared to 2010, with the remainder contributed by
Slide 26: Agenda
Agenda I. Introduction II. Milestone Quarter, Record Year III. Kopeyka Acquisition – Building on X5’s Success in Discounters IV. Strategic Efficiency Program Update V. 2011 Outlook VI. Appendix 26
Slide 27: Q3 & 9M 2010 P&L Highlights
Q3 & 9M 2010 P&L Highlights(1) % change % change % change % change USD mln Q3 2010 Q3 2009 9M 2010 9M 2009 USD RUR USD RUR Net Sales 2 614 0 2,614.0 2 103 1 2,103.1 24% 21% 7 797 7 7,797.7 6 081 2 6,081.2 28% 19% incl. Retail 2,606.6 2,094.2 24% 21% 7,778.6 6,053.2 29% 20% Gross Profit 629.9 501.8 2
Slide 28: Q3 & 9M 2010 Cash Flow Highlights
Q3 & 9M 2010 Cash Flow Highlights % change % change % change % change USD mln Q3 2010 Q3 2009 9M 2010 9M 2009 USD RUR USD RUR Net Cash Flows from Operating Activities 72.8 151.0 (52%) (55%) (66.2) 190.5 n/a n/a Net Cash from Operating Activities before Changes in Working Capital 210.6 191.8 10% 7% 6
Slide 29: Balance Sheet (pre Kopeyka)
Balance Sheet (pre Kopeyka) Kopeyka) Hi hli ht Highlights D bt M Debt Maturity t it Profile P fil as att 30 30.09.10 09 10 USD mln • As at 30 September 2010, the Company’s total debt amounted to RUR 60 billion or USD 1,965 million (at RUR/USD exchange Denominated in RUR Denominated in USD rate of 30
Slide 30: X5 Share Capital Structure
X5 Share Capital Structure 0.1% 30.3% Alfa Group Founders of Pyaterochka X5 Management g 1.9% 47.9% Free Float Treasury Shares 19.8% Total number of shares – 67,893,218 q Equivalent of 271,572,872 GDRs 30
Slide 31: Contact information
Contact information IR Department Contact Details Anna Kareva Egor Voytenkov Anastasiya Kvon IR Director Senior IR Manager IR Manager X5 Retail Group N.V. X5 Retail Group N.V. X5 Retail Group N.V. 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr. Kalitnikovskaya, M
X5 Retail Group — Investor Presentation (January 2011) on 6ix