Apteki 36,6 · RUS:APTK
Apteki 36,6 — Pharmacy Chain 36.6 — Non-Deal Roadshow (July 2004)
36 slides from Apteki 36,6's roadshow presentation, Jul 12, 2004
Slide 1: Healthy, Fit & Strong
HEALTHY, FIT & STRONG Stockholm, Frankfurt, London, Moscow, 5-12 July, 2004
Slide 2: Strategic Goals
STRATEGIC GOALS Pursuing industry and internal We strive to be Russia’s leading growth health & beauty Creating a unique customer retailer and to value proposition become the preferred source Expanding into rapidly growing of medicines regions and health & beauty products Developing and sust
Slide 3: Russia's Retail Market Is Booming
RUSSIA’S RETAIL MARKET IS BOOMING RUSSIA’S Russia is the No. 1 RETAIL 10.70% GROWTH 9.50% Y-o-Y, % destination for 12% 9.20% 180.0 8.40% 10% 150.0 retail expansion 8% 120.0 (A.T.Kearney 6% 90.0 146.0 159.9 4% 111.4 123.3 134.7 60.0 research) 2% 30.0 MARKET 0% 0.0 USD billlions 2000 2001 2002 2003 20
Slide 4: Major Achievements of 2003
MAJOR ACHIEVEMENTS OF 2003 PHARMACY Sales growth by 30% compared to 2002 CHAIN 36.6 $14 mln raised through IPO 17 pharmacies opened and 4 rebranded Cost of debt financing decreased from 19% to 14% Direct purchases share increased from 19% to 36% Reached out to the regions through acquisi
Slide 5: Customer Value Proposition
CUSTOMER VALUE PROPOSITION Competitive prices We strive to increase the Convenient locations value of the company by providing our Excellent shopping experience customers with a reason to Reliable quality products come back. Wide assortment 55
Slide 6: 36.6 Is the Most Recognizable Brand
36.6 IS THE MOST RECOGNIZABLE BRAND 36,6 72,4% GUM 67,2% TsUM 63,2% IKEA 63,0% Detsky Mir 62,6% Starik Khottabych 58,9% Technosila 56,2% M.Video 56,2% Okhotny Ryad 52,3% Mir 51,2% Sportmaster 50,1% Partyia 49,0% Eldorado 47,2% Snezhnaya koroleva 46,3% Arbat-prestige 43,6% 66 Source: Gallup Media Sur
Slide 7: Stores Growth
STORES GROWTH 31 957 29 900 23 075 17 543 17 995 17 286 15 824 12 983 13 261 12 695 226 NET SALES, 185 USD thousands 52 54 57 59 64 NUMBER OF 41 41 43 STORES, eop 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04 77 Starting from 2004 the Company will include pharmacies in its core business, which u
Slide 8: The Retail Marketplace Is Still Fragmented
THE RETAIL MARKETPLACE IS STILL FRAGMENTED TOP-5 PLAYERS MARKET SHARE 5% 36% 6% 9% 9% FOOD ELECTRONICS PHARMACEUT H&B DIY ICALS Top-5 players 88 Source: UFG Research
Slide 9: 36.6 Is the Consolidator of Choice in Pharmacy Retail
36.6 IS THE CONSOLIDATOR OF CHOICE IN PHARMACY RETAIL SALES 2003, # of We strive: stores USD millions 300 To reach sales 250 over $800 million by 2008 200 76 150 To enjoy 10% of the Russian 55 45 45 100 pharmacy 39 50 retail market 0 36.6 natur produkt first aid rigla o3 99
Slide 10: Regional Expansion
with 226 REGIONAL EXPANSION pharmacies in 6 regions the Company MURMANSK 30 reaches out to MOSCOW 77 30 million NIZHNY consumers, NOVGOROD 41 and will strive to BELGOROD & deliver its value VORONEZH 4 proposition to 60 million BASHKIRIA 74 consumers by 2008 10 10
Slide 11: Regional Acquisitions
REGIONAL ACQUISITIONS pharmacies sales'03 mrkt. share sales'04E (own) USD millions USD millions LEKO, Bashkortostan 74 (34) 13,5 25% 17,0 NAD, Nizhny Novgorod 41 (31) 7,3 19% 12,0 11 11
Slide 12: 2004 Objectives
2004 OBJECTIVES More than 50 pharmacies to be opened in Moscow and other regions Efficient integration of newly acquired pharmacies 50% growth in pharmacy sales through new openings and acquisitions More dynamic growth in sales by old stores (more than 9-months old) Control of costs and ex
Slide 13: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT 1Q04* 2003 2002 03/02,% NET SALES 46,4 147,8 118,7 24,5% GROSS PROFIT 17,8 59,8 46,0 30% EBITDA 4,0 13,8 15,1 -8,6% 8,8% 9,3% 12,7% OPERATING INCOME 2,6 8,4 10,4 -19,2% NET INCOME 0,7 1,0 3,3 -69,7% 1,5% 0,7% 2,8% 13 13 *Hereinafter IAS unaudited
Slide 14: Pharmacies 36.6: Income Statement
PHARMACIES 36.6: INCOME STATEMENT 1Q04 2003 2002 03/02,% NET SALES 30,2 76,3 58,8 29,8% GROSS PROFIT 10,5 24,4 19,2 27,1% GROSS MARGIN 35% 32% 33% EBITDA 2,9 1,2 2,6 -53,8% 9,7% 1,5% 4,4% D&A 0,8 2,0 1,7 n/a OPERATING INCOME 2,2 -0,9 0,9 n/a 14 14
Slide 15: Consolidated Income Statement, 1Q04
CONSOLIDATED INCOME STATEMENT, 1Q04 NET SALES up 49% 46,4 1Q03 GROSS 31,1 PROFIT 38,4% 1Q04 up from 35,0% 17,8 EBITDA 8,2% 10,9 up from 0,3% 3,8 2,3 0,1 EBIT 5,0% -1,1 up from -3,5% net sales gross profit ebitda ebit note: y-o-y basis 15 15
Slide 16: Pharmacies 36.6: Income Statement 1Q04
PHARMACIES 36.6: INCOME STATEMENT 1Q04 NET SALES up 61% GROSS 30,2 1q03 PROFIT 34,6% up from 31,4% 18,8 1q04 EBITDA 9,7% 10,5 up from 3,7% 5,9 2,9 2,1 EBIT 7,1% up from -6,4% net sales gross profit -0,7 ebitda -1,2 ebit note: y-o-y basis 16 16
Slide 17: Pharmacies 36.6: Old vs All Stores, 1Q04
PHARMACIES 36.6: OLD VS ALL STORES, 1Q04 Same store sales were up 10% yoy ALL OLD in the 1st quarter PHARMACIES PHARMACIES 2004 MLR only 32 pharmacies at least 9 months old as of 01jan03 GROSS MARGIN 36,4% 36,6% EBITDA MARGIN 10,1% 13,7% EBIT MARGIN 6,7% 10,3% NET INCOME* 2,9% 6,5% MARGIN 17 17 * Ad
Slide 18: Appendix
APPENDIX 18 18
Slide 19: Organization Chart
ORGANIZATION CHART OAO PHARMACY CHAIN 36.6 ZAO PHARMACIES 36.6 ZAO VEROPHARM Retail, Moscow Manufacturing OAO PHARMATSIA ZAO VREMJA Retail, Murmansk Wholesale LEKO GROUP ZAO PHARMSTATE Retail, Bashkiria Lease of property NAD GROUP KLADA TRUST Retail, Nizhny Novgorod Lease of 36.6 TM 19 19 * Everywhe
Slide 20: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT 1Q04* 2003 2002 03/02,% NET SALES 46,4 147,8 118,7 24,5% GROSS PROFIT 17,8 59,8 46,0 30% EBITDA 4,0 13,8 15,1 -8,6% 8,8% 9,3% 12,7% OPERATING INCOME 2,6 8,4 10,4 -19,2% NET INCOME 0,7 1,0 3,3 -69,7% 1,5% 0,7% 2,8% 20 20 *Hereinafter IAS unaudited
Slide 21: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET (major items) 1Q04 2003 2002 03/02 N-CURRENT ASSETS 70,0 60,1 45,9 14,2 CURRENT ASSETS 59,3 54,7 38,8 15,9 TOTAL ASSETS 129,3 114,8 84,7 30,1 EQUITY 42,2 40,2 24,4 15,8 TOTAL DEBT 56,4 43,1 36,3 6,8 CURRENT LIABILITIES* 22,9 24,0 17,7 6,3 21 21 *Hereinafter Current Liabili
Slide 22: Pharmacies 36.6: Income Statement
PHARMACIES 36,6: INCOME STATEMENT 1Q04 2003 2002 03/02,% NET SALES 30,2 76,3 58,8 29,8% GROSS PROFIT 10,5 24,4 19,2 27,1% GROSS MARGIN 35% 32% 33% EBITDA 2,9 1,2 2,6 -53,8% 9,7% 1,5% 4,4% D&A 0,8 2,0 1,7 n/a OPERATING INCOME 2,2 -0,9 0,9 n/a 22 22
Slide 23: Pharmacies 36.6 Balance Sheet
PHARMACIES 36.6 BALANCE SHEET (major items) 1Q04* 2003* 2002 03/02 N-CURRENT ASSETS 30,9 21,3 15,7 5,6 CURRENT ASSETS 17,6 13,8 13,1 0,7 TOTAL ASSETS 48,5 35,2 28,8 6,4 CURRENT LIABILITIES 16,4 17,2 10,9 6,3 23 23
Slide 24: Pharmacies 36.6: Old vs New Stores, 1Q04
PHARMACIES 36.6: OLD VS NEW STORES, 1Q04 old net sales 62% new gross profit 65% ebitda 85% ebit 96% 24 24
Slide 25: Pharmacies 36.6: SG&A Breakdown, 1Q04
PHARMACIES 36.6: SG&A BREAKDOWN, 1Q04 35,0% 30,0% Other 6,1% expenses 6,7% 25,0% 4,2% 20,0% Rentals, etc. 10,1% 10,1% 7,3% 15,0% 10,0% Personnel 14,0% 11,7% 13,3% 5,0% 0,0% FY2002 FY2003 1Q2004 %% of sales 25 25
Slide 26: Pharmacies Portfolio
PHARMACIES PORTFOLIO sales $76,3 36.6 pharmacies million pharmaceuticals pioneered the open-plan format 48% and were the first pharmacies to sell H&B products 52% health & beauty 26 26
Slide 27: Pharmacies 36.6: Investments 2003
PHARMACIES 36.6: INVESTMENTS 2003 $11,7 pharmacy opening cost down to million $180,000 on average 1,4 semi-automatic assembly line at the warehouse introduced to 1,7 significantly increase productivity and extend the logistics capacity 4,6 strategic projects including category management, new
Slide 28: Key Performance Indicators
KEY PERFORMANCE INDICATORS 3Q02 4Q02 1Q03 2Q03 3Q03 4Q04 1Q04 NUMBER OF PURCHASES 2 568 3 005 3 288 3 213 2 945 3 604 3 315 thousands AVERAGE PURCHASE 4,94 5,27 5,33 5,60 5,87 6,40 7,09 USD SALES/M2, 1 943 2 197 2 237 2 214 2 063 2 594 2 501 USD 28 28
Slide 29: Veropharm: Income Statement
VEROPHARM: INCOME STATEMENT 1Q04* 2003* 2002 03/02,% NET SALES 12,0 52,8 43,9 20,4% GROSS PROFIT 6,7 31,3 23,4 33,6% GROSS MARGIN 55,6% 59,2% 53,3% EBITDA 1,9 15,5 13,5 14,2% 16,5% 29,3% 30,9% D&A 0,6 2,9 3,1 n/a OPERATING INCOME 1,4 12,5 10,5 n/a 29 29
Slide 30: Veropharm Balance Sheet
VEROPHARM BALANCE SHEET (major items) 1Q04* 2003* 2002 03/02 N-CURRENT ASSETS 35,0 34,4 31,2 3,2 CURRENT ASSETS 36,7 34,2 23,4 10,8 TOTAL ASSETS 71,7 68,5 54,5 14,0 CURRENT LIABILITIES 7,4 7,1 6,5 0,6 30 30
Slide 31: Veropharm: Income Statement, 1Q04
VEROPHARM: INCOME STATEMENT, 1Q04 NET SALES up 27% 12,0 1q03 GROSS PROFIT 55,8% 9,3 up from 49,5% 1q04 6,7 4,6 EBITDA 14,3% down from 16,1% 1,5 1,7 0,9 1,1 EBIT 9,1% down from 9,7% net sales gross profit ebitda ebit note: q-o-q basis 31 31
Slide 32: 36.6 Stock
36.6 STOCK MARKET CAP: US$ 104* MILLION NUMBER OF SHARES: 8 MILLION FREE FLOAT 20% IAS REPORTING since 2002 AUDITOR DELOITTE TRADING MICEX since JAN’03 (RU14APTK1007) RTS since FEB’04 (aptk) * AS PER RTS BOARD 32 32
Slide 33: Board of Directors
BOARD OF DIRECTORS Sergey KRIVOSHEEV Chairman The number of Board members Artem BEKTEMIROV was, at the recent AGM, brought Vasily RUDOMINO into line with amendments to the Companies Law Michael OBERMAYER Andrey AZAROV 33 33
Slide 34: Management Structure
MANAGEMENT Artem BEKTEMIROV STRUCTURE CEO Anastasia Svein Aage Andrei Oleg ANIKIN Boris RYABOV VAVILOVA OLSEN SLIVCHENKO Strategy & Business & Corporate Marketing Technology COO CFO finance & IR Development Julia REZVINA Victor VASILIEV Deputy COO General Counsel & Corporate Secretary Dmitry GODUNOV
Slide 35: Disclaimer
DISCLAIMER Some of the information contained herein may contain projections or other forward-looking statements regarding future events or the future financial performance of OAO Pharmacy Chain 36.6, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 199
Slide 36: Healthy, Fit & Strong
Artem BEKTEMIROV, Chief Executive Officer Svein Aage OLSEN, Chief Financial Officer Andrei SLIVCHENKO, Director, Corporate Finance and IR Address: 105082 Moscow, 36 Bolshaya Pochtovaya str. Tel.: +7 (095) 792-5207 Fax: +7 (095) 792-5206 E-mail: slivchenko@oao366.ru HEALTHY, FIT & STRONG