GDR OKEY Group ORD · RUS:OKEY
GDR OKEY Group ORD — O'KEY Group — Investor Presentation (January 2011)
28 slides from GDR OKEY Group ORD's investor presentation, January 2011
Slide 1: O'KEY Group S.A. Analyst Briefing
January 2011 O’KEY Group S.A. Analyst Briefing
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The materials contained in this presentation (“Presentation”) have been prepared solely for the use in this Presentation and have not been i
Slide 3: Summary overview
Summary overview Core hypermarket format with supplementary Overview supermarkets (as of December 31, 2010) A leading Russian food retailer in the hypermarket segment in Hypermarkets Supermarkets terms of revenue in 2009(1) Number of stores 35 22 One of the leading food retailers in St. Petersbu
Slide 4: Our historical performance demonstrates our ability to deliver growth and increase sales efficiency
Our historical performance demonstrates our ability to deliver growth and increase sales efficiency Retail Revenue LFL Revenue (RUB terms) 9,6% 7,2% 7,5% 6,6% 4,9% 4Q '09 1Q '10 2Q '10 3Q '10 4Q '10 SOURCE: Audited IFRS financial statements for 2007-2009, Management accounts 2010 SOURCE: Management
Slide 5: Circa 10 years of successful growth
Circa 10 years of successful growth Selling space dynamics 287 300 Supermarkets 25% 27 250 Selling space CAGR '07-'10 233 ths. sq.m. Hypermarkets 190 21 200 146 15 150 6 260 100 87 212 3 175 140 50 17 28 36 85 6 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 SOURCE: Company, audited IFRS financial s
Slide 6: Russia is one of the world's most attractive food retail markets
Russia is one of the world’s most attractive food retail markets Russia is one of the largest … with one of the lowest rates food retail markets in Europe … of penetration by modern retail … 300 272 100% Average 87% 88% 80% 80% 83% 221 80% 74% (2) 71% 72% 73% 73% 78% (US$bln.) 197 200 159 57% 143 12
Slide 7: O'Key has strong expertise in hypermarkets, format with appealing growth prospects
O’Key has strong expertise in hypermarkets, format with appealing growth prospects Distinctive expertise in hypermarkets Focused on one core format – hypermarkets Supermarkets (O‟Key Express brand) – a satellite format, providing a better fit for specific locations (i.e. residential areas) Str
Slide 8: Convenient locations only
Convenient locations only Typical hypermarket location Typical supermarket location Key statistics (as of December 31, 2010) Key statistics (as of December 31, 2010) Number of stores: 35 Av. selling space: 7,433 sq.m. Number of stores: 22 Av. selling space: 1,237 sq.m. Constant SKUs: 35,40
Slide 9: Distinctive concept emphasizing a pleasant and convenient shopping experience
Distinctive concept emphasizing a pleasant and convenient shopping experience Modern, well positioned and designed stores … Convenient locations with large parking areas and selling space Appealing interior design with good lighting, convenient shelf layout and no “warehouse” feel Family frien
Slide 10: Strong customer proposition with a particular focus on fresh & delicatessen and non-food products
Strong customer proposition with a particular focus on fresh & delicatessen and non-food products Wide product range … … with a focus on fresh & … as well as a high share delicatessen products … of non-food goods Up to 64,000 SKUs of food and non- food products at affordable prices Product matri
Slide 11: All customer needs are addressed and better products are offered at affordable prices
All customer needs are addressed and better products are offered at affordable prices … Pricing model allowing for significant Comments competitive advantages Products at affordable prices in three main segments: Basic Price Market Market Average entry highest Average + price price Prices
Slide 12: Customer loyalty and high brand equity
…which translates into our customers’ loyalty and high brand equity Higher than average basket (hypermarkets) … … and LFL traffic growth (RUB terms, 2009) … 900 795 10.6% 10% (Average ticket, 617 5.0% RUB, 2009) 600 555 528 521 5% 3.6% 300 0% (1.5%) O'KEY Continent X5 Retail Seventh (2.2%) Group Mag
Slide 13: We already have a large geographical presence
We already have a large geographical presence … Geographical coverage Historical store roll-out 60 57 1 Urals 3 50 Siberia 46 Murmansk 14 - 2 HM South 3 40 37 9 Centre 1 7 St. Petersburg(1) 7 30 5 - 15 SM 24 2 North-West - 15 HM 4 20 1 12 27 29 32 10 1 19 Moscow(2) 5 3 4 11 - 2 HM 0 1 4 1 - 1 SM Niz
Slide 14: … and an efficient supply chain
… and an efficient supply chain … “Smart” supply chain Delivery chain Local suppliers Suppliers Direct delivery Stores 2Q 2010 1% data 1% (costs O’KEY split) 53% 46% Logistics Delivery Delivery 53% 46% Cross-docking by trucks to stores Dispatching Federal suppliers Local suppliers Federal Fede
Slide 15: … supported by innovative IT platform
… supported by innovative IT platform … Key elements of IT system Covered business segments Logistics & purchasing Assortment planning IBS Suite (implementation stage) Price management Retail analysis Start of implementation – August 2009 Accounting IT Platform Microsoft Dynamics AX Inve
Slide 16: The most efficient operations among Russian public food retailers
… which is why we have the most efficient operations among Russian public food retailers LFL sales growth (RUB terms, 2009) Revenue per sq.m.(1) (2009) 15% 12 10.1(2) 11.6% 9.0 10 8.6 (US$'000/sq.m.) 10.0% 7.9 10% 8 5.7 6 5% 4.2% 4.1% 4 2 0% 0 Dixy O'KEY Magnit Continent X5 Retail O'KEY Magnit Conti
Slide 17: Our competitive strengths make us confident that our strategy will realize our full potential
Our competitive strengths make us confident that our strategy will allow us to realize our full potential Strategic goals Key plans and targeted results Further penetrate the large and lucrative Moscow market Continue to expand further Expand presence outside St. Petersburg in cities with high p
Slide 18: Key financials snapshot
Key financials snapshot RUB millions 2006 2007 2008 2009 1H 2009 1H 2010 P&L Revenue 16,700 30,533 51,143 67,875 31,488 38,254 YoY growth 51.6% 82.8% 67.5% 32.7% n/a 21.5% Gross profit 3,421 6,468 10,761 14,768 6,597 8,107 Gross margin 20.5% 21.2% 21.0% 21.8% 21.0% 21.2% EBITDA 1,446 2,201 4,549 5,8
Slide 19: EBITDA margin evolution
EBITDA margin evolution EBITDA margin bridge 2007-2009 10% 0.7% 0.5% 8.9% 0.1% 8.7% 9% 0.3% 0.6% (0.04%) (0.6%) 8% 0.4% (0.4%) 7.2% Resulting from an 7% increase in the Share of (0.1%) average number of rented stores 6% employees per increased selling space 5% 4% (1) (1) EBITDA (1) GM Payroll Commun
Slide 20: We actively invest in our future growth and increase efficiency of our cash management
We actively invest in our future growth and increase efficiency of our cash management Total CAPEX dynamics(1) Trade Operating Cash Cycle(4) (Cash Flow data) 60 55 (2) 42 39 40 20 (Days) 0 (2) (20) (26) (40) (29) (29) (60) (65) (80) (72) (84) (100) 2007 2008 2009 Inventories and trade receivables(3)
Slide 21: Despite the aggressive roll-out, we pay special attention to our financial standing
Despite the aggressive roll-out, we pay special attention to our financial standing Net debt(1) Net debt / EBITDA 25 000 7x 6,5x 6x 5,1x 20 000 (RUB mln.) 15 122 5x 13 420 14 004 15 000 4x 11 222 3,0x 9 380 10 000 3x 2,4x 2,2x (2) 2x 5 000 1x 0 0x 2006 2007 2008 2009 1H 2010 2006 2007 2008 2009 1H 2
Slide 22: Corporate governance
Corporate governance Dividend policy and Corporate governance levels management incentive program Responsible for setting strategic goals for the Company Dividends at the target ratio of 25% of Board of Directors consists of 5 members including: Board of Group‟s net profit for the relevant per
Slide 23: O'Key Group – a unique opportunity in the Russian food retail sector
O’Key Group – a unique opportunity in the Russian food retail sector Highlights Comments # 3 Russian (excl. multinationals) food retailer in terms of revenue in 2009(1) A leading Russian food retailer with strong expertise in hypermarkets … Historical focus on hypermarkets, one of the most attra
Slide 24: Appendix
SONeY TT APPENDIX
Slide 25: Experienced top-management team combining best-in-practice international and local expertise (I)
Experienced top-management team combining best-in- practice international and local expertise (I) Patrick Longuet Sebastien Verhaeghe Dmitry Pryanikov Vladislav Kurbatov CEO Executive Director Financial Director Operations Director One of Supervises Director of the Joined the Europe’s most finance,
Slide 26: Experienced top-management team combining best-in-practice international and local expertise (II)
Experienced top-management team combining best-in- practice international and local expertise (II) Georges Kowalkowski Maksim Schegolev Eric Richard Vadim Korsynskiy Marketing & Sales Expansion Director Construction Director Commercial Director Development Director Responsible Responsible Responsibl
Slide 27: Transparent legal structure
Transparent legal structure Caraden Ltd Brookvalley Ltd Barleypark Ltd Free Float (Isle of Man) (Isle of Man) (Isle of Man) 14,2% 22,3% 56,2% 7,3% O’KEY GROUP SA (Luxembourg) 99% 99% 99% 99% O’KEY – 100% O’KEY Group Dorinda Mir Torgovli O’KEY LLC Logistics LLC LLC JSC CJSC Importing and Operatio
Slide 28: Established private label operations serve as a tool to address customer needs and pricing expectations
Established private label operations serve as a tool to address customer needs and pricing expectations Ultra fresh food products FMCG products Non-food products In store made products including O‟KEY labeled food and non-food products Other O‟KEY private label brands in fresh bakery and delic