X5 Corporate Center · RUS:X5

X5 Corporate Center — X5 Retail Group — Q1 2015 Earnings Presentation

25 slides from X5 Corporate Center's earnings presentation, Apr 21, 2015

  1. Slide 1: First Quarter 2015 Financial Results Conference Call

    First Quarter 2015 Financial Results Conference Call Elena Milinova, X5 CFO Moscow, Russian Federation 21 April 2015 X5 RETAIL GROUP

  2. 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

  3. Slide 3: Delivering Growth

    DELIVERING GROWTH )X5RETAILGROUP % Tepexpectox

  4. Slide 4: Summary Highlights for Q1 2015

    SUMMARY HIGHLIGHTS FOR Q1 2015  Total revenue increased by 26.7%, year-on-year (y-o-y), to RUB 183 billion  X5’s best like-for-like (LFL) sales results in the past five years – total LFL sales increased by 17.1% in Q1 2015  EBITDA grew by 34.0%, y-o-y, and profit margin increased by 54 basis poin

  5. Slide 5: Financial Highlights

    FINANCIAL HIGHLIGHTS RUB mln(1) Q1 2015 Q1 2014 +/( - ) +/( - )% (where applicable) Total revenues 182,725 144,167 38,558 26.7% COGS 137,829 109,521 28,308 25.8% Gross profit 44,896 34,646 10,250 29.6% Gross profit margin 24.6% 24.0% - EBITDA 13,129 9,796 3,333 34.0% EBITDA margin 7.2% 6.8% - Profit

  6. Slide 6: Net Retail Sales Summary

    NET RETAIL SALES SUMMARY Q1 2015 NET RETAIL SALES BREAKDOWN, RUB MLN KEY DRIVERS Y-o-Y 34.7% 10.7% 8.6% 27.3% n/a 26.5%  Net retail sales grew by 26.5% Growth primarily due to an increase in new 3,064 1,415 606 182,053 selling space and improved LFL sales 33,404 (334) 143,898  Pyaterochka’s strong

  7. Slide 7: Expansion Summary – Q1 2015

    EXPANSION SUMMARY – Q1 2015 NET SELLING SPACE GROWTH DYNAMICS IN Q1 2015, th.sq.m. KEY DRIVERS 105 4 3 2,682  Strong organic opening programs at 2,572 Pyaterochka and Perekrestok (3)  Increased total store base to 5,639 stores by Q1 2015 end 31 December Pyaterochka Perekrestok Karusel Express 31 M

  8. Slide 8: Improving LFL Results

    IMPROVING LFL RESULTS X5 Q1 2015 LFL RESULTS X5 LFL SALES GROWTH 17.1% 17.1% 13.3% 11.6% 8.1% 13.7% 6.3% 3.9% 0.5% -0.4% -1.7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2015 2.9% X5 LFL TRAFFIC GROWTH 4.0% 2.9% 0.7% 0.1% Total Traffic Basket (0.4%) X5 Q1 2014 LFL RESULTS (2.1%) (1.2%) 6.3% (4.0%) 6.1% (6

  9. Slide 9: EBITDA Breakdown

    EBITDA BREAKDOWN +34.0% 13,129 9,796 0.41% (0.55%) mln RUB mln RUB 0.54% 7.2% 6.8% Q1 2014 EBITDA Gross margin Staff costs Other Q1 2015 EBITDA  Improvement in gross margin due to the improved logistics costs management as well as further optimization of assortment.  Staff costs declined as a perc

  10. Slide 10: Debt Structure

    DEBT STRUCTURE DEBT PROFILE DEBT PORTFOLIO MATURITY RUB mln 31 Mar 2015 31 Dec 2014 49% Total Debt 120,619 130,986 38% Short-Term Debt 14,407 15,834 % of total debt 11.9% 12.1% Long-Term Debt 106,212 115,152 12% % of total debt 88.1% 87.9% 1% Net Debt 115,516 105,363 2015 2016 2017 2018 Short-term d

  11. Slide 11: Cash Flow Highlights

    CASH FLOW HIGHLIGHTS RUB MLN Q1 2015 Q1 2014 +/( - ) +/ ( - ), % Net cash used in operating activities (2,251) (4,632) 2,381 51.4% Net cash from operating activities before changes in working 13,573 9,196 4,377 47.6% capital Change in Working Capital (11,139) (10,120) (1,019) 10.1% Decrease in trade

  12. Slide 12: Capital Expenditures Overview

    CAPITAL EXPENDITURES OVERVIEW Q1 2015 CAPITAL EXPENDITURES – 7,916 RUB MLN Q1 2015 CASH USED INVESTING - 7,820 RUB MLN Maintenance , Q2 2014 Q3 2014 Q4 2014 Q1 2015 IT & Other 9% 156 stores Logistics New Store 3% Openings 44% (4,911) 344 stores (6,590) Refurbishments (7,820) 44% (13,947) In Q1 2015,

  13. Slide 13: Condensed Balance Sheet

    CONDENSED BALANCE SHEET RUB MLN 31 MARCH 2015 31 DECEMBER 2014 +/( - ) +/( - )% Total current assets 93,190 110,509 (17,319) (15.7%) Cash & cash equivalents 5,103 25,623 (20,520) 80.1% Inventories 52,800 47,084 5,716 12.1% Total non-current assets 244,426 240,411 4,015 1.7 % Net PP&E 154,670 150,328

  14. Slide 14: Quarterly Financial Highlights

    QUARTERLY FINANCIAL HIGHLIGHTS Y-o-Y RUB million Q1 2014 Q2 2014 Q3 2014 Q4 2014 FY 2014 Q1 2015 +/( - )% Revenue 144,167 155,579 152,539 181,588 633,873 182,725 26.7% Net retail sales 143,898 155,109 152,028 180,894 631,930 182,053 26.5% COGS (109,521) (117,469) (114,950) (136,951) (478,891) (137,8

  15. Slide 15: Operational Review

    OPERATIONAL REVIEW )X5RETAILGROUP % Tepexpectox

  16. Slide 16: X5 Regional Presence

    X5 REGIONAL PRESENCE NUMBER OF STORES BY REGION as of 31.03.2015 (1) OVERVIEW • Multi-format presence in 62 cities of European Russia, the Urals and Western North region Siberia with population > 200,000 (2) Pyaterochka: 87 • Total stores – 5,639, including: North-West region Petrozavodsk ― 4,958 Py

  17. Slide 17: X5 Distribution Capabilities

    X5 DISTRIBUTION CAPABILITIES DISTRIBUTION CENTER (DC) LOCATIONS WAREHOUSE SPACE (1) Space, Region # of DCs th. sq. m. Central 359.7 13 5 North-West 82.8 5 St. Petersburg Volgo-Vyatsky 41.9 2 Ural 58.7 5 MOSCOW Central-Chernozemny 34.2 3 Povolzhsky 71.7 3 13 South 41.3 2 Total 690.3 33 2 N. Novgorod

  18. Slide 18: Key Formats

    KEY FORMATS )XSRETAILGROUP % Mepexpecrox

  19. Slide 19: Pyaterochka Summary

    PYATEROCHKA SUMMARY “YOUR NEIGHBORHOOD STORE FOR DAILY SHOPPING NEEDS”  4,958 stores at 31 March 2015, 25 % increase y-o-y  1,859 thousand sq. m. of selling space (at 31 March 2015), 29% increase y-o-y  2014 Net sales – RUB 436 billion, 25% increase y-o-y  Q1 2015 Net retail sales – RUB 130 bill

  20. Slide 20: Establishing a Track Record - Pyaterochka

    ESTABLISHING A TRACK RECORD - PYATEROCHKA Net Sales Growth, % y-o-y Total LFL Sales Growth, % y-o-y 34.7% 21.7% 30.3% 29.1% 17.7% 15.7% 22.6% 11.1% 17.7% 8.2% 15.9% 15.9% 14.1% 5.2% 10.4% 9.1% 2.1% 2.6% 7.6% 7.7% 7.2% -0.1% -0.2% -1.7% -2.6% -2.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q

  21. Slide 21: Perekrestok Summary

    PEREKRESTOK SUMMARY “RUSSIA’S FAVORITE, HIGH QUALITY FRESH SUPERMARKET”  405 stores at 31 March 2015, 5.5% increase y-o-y  420 thousand sq. m. of selling space (at 31 March 2015), 6.9% increase y-o-y  2014 Net sales – RUB 116 billion; 4.5% increase y-o-y  Q1 2015 Net retail sales – RUB 32 billio

  22. Slide 22: Establishing a Track Record - Perekrestok

    ESTABLISHING A TRACK RECORD - PEREKRESTOK Net Sales Growth, % y-o-y Total LFL Sales Growth, % y-o-y 10.7% 7.5% 8.4% 8.1% 4.3% 5.6% 5.9% 6.2% 5.6% 5.5% 2.5% 2.9% 4.4% 4.3% 1.1% 0.3% 0.4% 0.6% 2.9% 2.0% 1.6% (0.0%) (2.0%)(2.7%) (2.8%) (3.4%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3

  23. Slide 23: Karusel Summary

    KARUSEL SUMMARY “YOUR DESTINATION STORE FOR ALL FOOD & HOUSEHOLD NEEDS”  83 stores at 31 March 2015, 2.5% increase y-o-y  362 thousand sq. m. of selling space (at 31 March 2015), 0.3% increase y-o-y  2014 Net sales – RUB 69 billion, 7.9% increase y-o-y  Q1 2015 Net retail sales – RUB 18 billion,

  24. Slide 24: Establishing a Track Record - Karusel

    ESTABLISHING A TRACK RECORD - KARUSEL Net Sales Growth, % y-o-y Total LFL Sales Growth, % y-o-y 7.1% 8.7% 7.4% 8.6% 7.0% 8.6% 7.8% 5.4% 5.6% 4.3% 4.1% 3.4% 6.3% 5.0% 4.5% 4.8% 0.6% (0.1%) (3.6%) (4.2%) (11.4%) (12.0%) (7.3%) (13.0%) (9.9%) (9.9%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1

  25. Slide 25: Strategic Focus

    STRATEGIC FOCUS  Creating shareholder value by improving customer value propositions Creating Stakeholder  Focus on customers and stores Value  Increase sales densities  Focus on operating efficiencies  Improve profitability and returns  Increase employee engagement and develop corporate cultu

X5 Retail Group — Q1 2015 Earnings Presentation on 6ix