X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Merger or Acquisition (December 2010)
21 slides from X5 Corporate Center's merger presentation, Dec 6, 2010
Slide 1: Building on X5's Success in Discounters: Acquisition of Kopeyka Retail Chain
Building on X5’s Success in Discounters: Acquisition of Kopeyka Retail Chain 06 December 2010
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. Strategic Rationale II. Transaction III. Kopeyka Overview IV. X5 + Kopeyka V. Synergies and Roadmap 3
Slide 4: Strategic Rationale
Strategic Rationale Kopeyka Acquisition Adds to X5’s Organic Strategy for Leadership, Growth and Value for Shareholders – Building on X5 Discounters’ Phenomenal Success Area of Focus Rationale Undisputed leader in discounters by far leaving behind nearest competitors(1) Leadership Nearly 75% inc
Slide 5: Enhanced Leadership and Scale
Enhanced Leadership and Scale Acquiring of Kopeyka Will Enhance X5’s Number One Position In Russia 2009 Share in Top-10 Retailers(1) H1 2010 Net Selling Area(2) +5.4% ‘000 sq.m. +24% 31.7% 1,400 26.3% 1,123 1,065 16.2% 15.1% 12.9% 599 415 5.2% 5.3% 5.4% 6.4% 243 277 298 4.1% 177 3.1% 105 127 X5 X5 M
Slide 6: Discounters – Winning Format
Discounters – Winning Format Discounters Format – Growth Driver with Outstanding Potential for Food Retail Market in Russia Modern Retail Structure in Russia(1) Discounters per 100,000 of Population(2) 25% 24% 22% 22% 22% 22% 30% 32% 35% 36% 37% 38% 16.7 45% 44% 42% 43% 42% 41% 4.5 5.0 3.3 3.5 1.5 2
Slide 7: Kopeyka Strengthens X5's Leadership in Key Markets
Kopeyka Strengthens X5’s Leadership …in the Key Markets – Moscow and the Region As of 30 June 2010 Moscow and the Region Number of stores North-West Central X5 discounters:329 stores X5 discounters :470 stores 317 + Kopeyka: 432 stores Centr.- 739 Chernozemny Volgo-Vyatsky X5 discounters : X5 discou
Slide 8: Right Time for Consolidation
Right Time for Consolidation Top 5 Food Retail Chains, Market Share %(1) Consumer confidence index in Russia (2) 80% 5% Consumer confidence (rhs) 70% - 60% (5%) 50% (10%) 40% (15%) 30% (20%) (25%) 20% (30%) 10% (35%) 0% (40%) Republic Hungary Russia Germany France Poland UK Spain Turkey 1Q 05 2Q 05
Slide 9: Agenda
Agenda I. Strategic Rationale II. Transaction III. Kopeyka Overview IV. X5 + Kopeyka V. Synergies and Roadmap 9
Slide 10: Transaction Overview
Transaction Overview Description Acquisition of 100% ownership of Kopeyka retail business and property Enterprise Value: RUR 51.5 bln Transaction Value Net Debt: less than RUR 16.5 bln 100% cash payment for equity Transaction All customary guarantees and warranties Structure 100% assumpt
Slide 11: Agenda
Agenda I. Strategic Rationale II. Transaction III. Kopeyka Overview IV. X5 + Kopeyka V. Synergies and Roadmap 11
Slide 12: Kopeyka Snapshot
Kopeyka Snapshot Strong Retail Operator... Russia’s 3rd largest soft discounter with ~ 660 stores(1) 20% Private Label penetration High in-store productivity Advanced IT systems on SAP platform Well developed franchising model Strong & professional management team … With Strong Logistics
Slide 13: Agenda
Agenda I. Strategic Rationale II. Transaction III. Kopeyka Overview IV. X5 + Kopeyka V. Synergies and Roadmap 13
Slide 14: X5 + Kopeyka
X5 + Kopeyka Market Share(1) Net Retail Sales & EBITDA(2) 30% RUR bln 20% 16% 28% 3.7% 59 3.8 20% Total: 10.1% Total: 16.2% Total: 5.3% Total: 27.7 2.2% Total: 360 0.9% 12.5% 301 23.9 7.9% 4.4% Total market Moscow market Moscow region Net Retail Sales EBITDA market X5 Retail Group Kopeyka X5 Retail
Slide 15: Opportunities to Grow LFL Sales
Opportunities to Grow LFL Sales Substantial Upside Potential in Sales Density Through Traffic Improvement Kopeyka vs X5 discounters (LFL) Kopeyka vs X5 discounters Annualized Sales per Traffic per sq.m. Average Ticket sq.m. (000’ RUR)(1) (RUR) (1) 26% 25% 24% 399 259 23% 1,540 23% 207 19% 21% 21% 20
Slide 16: Complementing Distribution Infrastructure
Complementing Distribution Infrastructure 7 Kopeyka Distribution Centres Provide X5 with Additional Logistics Capacity X5 KopeykaFruit & Non-Food # of 000 # of 000 Fruit & Non- X5 DC locations as at Kopeyka DC locations as at Region Dry Fresh Frozen DCs sq. m. DCs sq. m. Veg. Food 30 June 2010 30 Ju
Slide 17: Agenda
Agenda I. Strategic Rationale II. Transaction III. Kopeyka Overview IV. X5 + Kopeyka V. Synergies and Roadmap 17
Slide 18: Significant Operational Synergies
Significant Operational Synergies Area of Focus Expected Synergy Benefits •Adds ~ 660 highly compatible stores and increases selling space by 25% Top-Line •Improvement in sales per sq.m. of existing Kopeyka stores achieved through: Growth ─ Rebranding, including layout and equipment upgrades, public
Slide 19: 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 19
Slide 20: 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 21: Time for Q&A
XS5RETAILGROUP Time for Q&A — ‘S Tameporwa nEPEKPECTOK BER APE
X5 Retail Group — Merger or Acquisition (December 2010) on 6ix