X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Investor Presentation (August 2010)
30 slides from X5 Corporate Center's investor presentation, August 2010
Slide 1: Profitable Growth & Long-Term Leadership
Profitable Growth & Long-Term Leadership Investor Presentation August 2010 p. 1
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 & 2009 Highlights II. Q2 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 3
Slide 4: X5 - #1 Russia's Retailer
X5 - #1 Russia’s Retailer X5 Retail Group today • 2009 net sales - USD 8,717 mln; growth on 2008 of 25% on Russia’s Leading Food Retailers pro-forma basis (1) in RUR terms, 33% on consolidation basis (2) in RUR terms # Company FY 2009 Net % % in Total Retail Sales in Top-10 Market (6) • Q2 2010 net
Slide 5: X5 Multi-Format Approach
X5 Multi-Format Approach X5 Operates Stores for Every Lifestyle and Family Budget Soft Discounters Net selling space: from 300 to 800 sq.m. Average assortment: 3,000 SKUs Pricing policy: Lowest price in the market on 100% of assortment Format strengths: Price and convenience Supermarkets Net selling
Slide 6: 2009 Performance Score Card
2009 Performance Score Card 2009 Conditions Were a Successful Test of X5’s Strength and Endurance • Strengthened position as #1 retailer in Russia • Won customers thanks to “close-to-the-customer” approach Strategic Progress, • Expanded selling space well in excess of plan, while staying within CapE
Slide 7: Agenda
Agenda I. Introduction & 2009 Highlights II. Q2 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 7
Slide 8: Q2 2010 Operational Performance
Q2 2010 Operational Performance 18% net retail sales growth in RUR against a backdrop of weak consumer spending…. • …and drastically lower food inflation in Russia: 4.5% in June Q2 2010 Net Retail Sales 2010 year-on-year compared to 12% in June 2009 RUR bln • X5 continued to pursue its “close to the
Slide 9: Q2 2010 LFL Results
Q2 2010 LFL Results… … Industry-Leading Performance at Discounters with 11% LFL Sales Growth • X5‟s LFL sales growth at 4% in RUR terms year-on- year Supermarkets’ Q2 2010 LFL Performance • Strong Discounters LFL growth was achieved in Q2 Based on RUR- 2010 against a high base denominated gross sale
Slide 10: Selling Space Expansion in H1 2010
Selling Space Expansion in H1 2010 Selective and Efficient New Store Openings In Q2 2010 Number Of Stores, EoP • Net 73 stores or 29 th. sq.m. of selling space added: –72 soft discounters –one supermarket closed –two hypermarkets • 42 convenience stores added via gaining operational control of Expre
Slide 11: X5's Regional Presence
X5’s Regional Presence Further Strengthened Presence in the Regions North-West region Moscow & the Region • Increased share of regional sales from 19% in Net Retail Sales 2009: Net Retail Sales 2009: USD 2,433mln USD 4,460mln 2008 to 21.7% in Q2 2010 with regions Breakdown: Breakdown: Hypermarkets H
Slide 12: Paterson Integration Completed
Paterson Integration Completed Integration of Paterson was completed at the end of May Reinforces X5 positions in supermarkets, securing high quality locations in key geographies Strategic & Most stores fully compatible with X5‟s requirements both operationally and geographically… Operational Fi
Slide 13: Agenda
Agenda I. 2009 Highlights II. Q2 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 13
Slide 14: X5's Strategic Priorities
X5’s Strategic Priorities • Build multi-format • Build supply chain success advantages • Cash generation • Strengthen value • Drive efficiency and • Focus on returns propositions margins • Liquidity • Drive LFL and top • Ensure support for management line growth long-term growth Customer Operational
Slide 15: Strategic Efficiency Program
Strategic Efficiency Program… …Impacts Every Area of X5’s Business, to Create New Competitive Advantages Support of Working Long-Term Sales Cost Capital Scalable Growth Savings Project Improvement Expansion Efficient Supply Chain Management IT Systems Integration Business Processes Improvement Labou
Slide 16: Supply Chain Efficiency
Supply Chain Efficiency … Now We are Bringing It to a New Level… … to Create a Fully Integrated & Efficient Supply Chain Purchasing/ Optimal Warehouse Efficient Efficient Sourcing DC Network Productivity Transportation In-Store Structure Logistics Areas of Focus • Assortment • Optimization of DC • W
Slide 17: Distribution Infrastructure
Distribution Infrastructure Supply Centralization Rate Rose From 51% to 61% by Year-End 2009, Well Ahead of Target Region # of DCs 000 sq. m. Dry Fruit & Veg Fresh Frozen Non-Food Central 7 128.4 v v v v DC locations as at North-West 5 65.1 v v v v 30 June 2010 Volgo-Vyatsky 1 17.5 v v v Urals 4 21.
Slide 18: IT Systems Transformation
IT Systems Transformation Operational Excellence in Our Business Management Platforms 2012 IT SAP Implementation in line with initial schedule Infrastructure SAP for Retail Successfully launched in a pilot region in 2009 Stores X5 earned SAP‟s #1 ranking for “Highest Own HR Management Quality SA
Slide 19: In-Store Labour Productivity
In-Store Labour Productivity… … Can be Substantially Enhanced through Improving Efficiency of… In-Store and Working Workplace Store Personnel Personnel Core Processes Hours Management Education Management Areas of Focus • Merchandising • Efficient planning of • Optimization of • Performance • Educat
Slide 20: X5's Strategic Efficiency Program
X5’s Strategic Efficiency Program…. …is a Multi-Year Effort But We Are Already Delivering Results SG&A(1) as % of Sales (1) Excluding ESOP & D&A p. 20
Slide 21: Agenda
Agenda I. 2009 Highlights II. Q2 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 21
Slide 22: Q2 2010 Financial Performance
Q2 2010 Financial Performance(1) Net Sales EBITDA & EBITDA Margin USD mln 25% 20% Gross Profit Net Profit / (Loss) 22% (1)All P&L numbers are provided on pro-forma basis p. 22
Slide 23: Q2 2010 P&L Highlights
Q2 2010 P&L Highlights(1) USD mln Q2 2010 Q2 2009 % change % change y-o-y, USD y-o-y, RUR Net Sales 2,640.9 2,111.2 25% 17% incl. Retail 2,637.7 2,099.6 26% 18% Gross Profit 637.8 520.8 22% 15% Gross Margin, % 24.1% 24.7% SG&A (excl. D&A) (449.2) (358.0) 25% 18% % of revenue 17.0% 17.0% ESOP Expense
Slide 24: Key Q2 2010 P&L Developments
Key Q2 2010 P&L Developments Net sales increased 17% year-on-year in RUR terms to RUR 79,850 mln or 25% in USD terms to USD 2,641 mln; Gross profit totaled USD 638 mln, for a gross margin of 24.1%; EBITDA amounted to USD 220 mln, for an EBITDA margin of 8.3%; X5 reported a net profit of USD
Slide 25: Q2 2010 Cash Flow Highlights
Q2 2010 Cash Flow Highlights % change % change USD mln Q2 2010 Q2 2009 USD RUR Net Cash Flows from Operating Activities (9.5) 77.9 n/a n/a Net Cash from Operating Activities 238.6 210.2 13% 6% before Changes in Working Capital Change in Working Capital (176.9) (56.1) 215% 207% Net Interest and Incom
Slide 26: Debt Financing and Liquidity
Debt Financing and Liquidity Highlights Debt Maturity Profile as at 30.06.10 • As at 30 June 2010, the Company‟s total debt amounted to RUR USD mln 59 billion or USD 1,899 million (at RUR/USD exchange rate of 31.19). Net debt totaled RUR 56 billion or USD 1,794 million. 1,886.2 • Net debt totaled RU
Slide 27: Agenda
Agenda I. 2009 Highlights II. Q2 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 27
Slide 28: 2010 Outlook
2010 Outlook 2010 Outlook Net new store addition: Hypermarkets: 7-10 stores; Supermarkets: ~15 stores; Discounters: 200-250 stores. Capital Expenditures of up to RUR 18 bln Due to significantly lower food inflation to date and in the official forecast rate for the year, X5 provides a more conserv
Slide 29: X5 Share Capital Structure
X5 Share Capital Structure Total number of shares – 67,893,218 Equivalent of 271,572,872 GDRs p. 29
Slide 30: 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
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