X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Q1 2016 Earnings Presentation
33 slides from X5 Corporate Center's earnings presentation, Apr 28, 2016
Slide 1: Q1 2016 Financial Results
Q1 2016 FINANCIAL RESULTS MOSCOW, RUSSIAN FEDERATION 28 APRIL 2016 1
Slide 2: Disclaimer
DISCLAIMER T his presentation does not constitute or form part of and should not be construed as an advertisement of securities, an offer or This presentation includes statements that are, or may be deemed to be, “forward- looking statements”, with respect to the financial the Securities on the terr
Slide 3: I. Highlights
I. HIGHLIGHTS runepmapxer 6 Tlamépouxa cfeNep=kpecrox KAPYCEAb X5RETALGROUP | 3
Slide 4: Key Achievements in Q1 2016
KEY ACHIVEMENTS IN Q1 2016 The Company added 377 new Revenue increased by stores in Q1 2016, vs. 156 26.8% y-o-y stores in Q1 2015 359 stores refurbished Gross margin is on a stable 76% of Pyaterochka stores level of 24.3% despite difficult operating under new concept market environment
Slide 5: Operational Highlights
OPERATIONAL HIGHLIGHTS Net retail sales Traffic, mln customers Net selling space (eop), th. sq. m 29.6% 29.6% 31.0% 28.1% 28.3% 674 615 633 672 23.9% 26.5% 26.3% 26.7% 548 20.1% 3,514 3,080 3,333 2,844 228 231 2,682 182 199 195 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Slide 6: Accelerating Growth
ACCELERATING GROWTH Net Sales Growth, y-o-y Total LFL Sales Growth, y-o-y 28.3% 28.1% 26.7% 17.1% 26.5% 26.3% 15.6% 23.1% 13.3% 20.8% 13.1% 11.6% 16.6% 9.8% 8.1% 7.8% 13.9% 6.3% 10.4% 11.9% 3.9% 10.0% 8.6% 8.1% 7.8% 6.6% 0.0%0.5% 4.4% -0.7% -0.4% -1.1% -1.7% -3.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS Revenue Gross profit & gross margin SG&A (excl. D&A&I) 60 18.3% 17.6% 18.4% 19.4% 17.8% 20.0% 24.6% 25.0% 28.5% 28.6% 24.5% 24.1% 24.3% 50 44.6 41.3 15.0% 26.7% 26.7% 26.8% 56.4 36.1 49.0 40 33.4 35.2 44.9 48.1 56.2 182.7 199.9 196.1 230.1 231.6 30 10.0% 20 5.0% 10 0 0.0% Q1 201
Slide 8: II. Market Overview
II. MARKET OVERVIEW runepmapxer )X5RETALGROUP | 8
Slide 9: Challenging Consumer & Macro Environment
CHALLENGING CONSUMER & MACRO ENVIRONMENT Inflation and real wage growth Changing consumer attitudes: Percentage of consumers, which cut spending on different categories for the past month 30 65 25 60 20 55 15 50 10 45 5 40 0 35 -5 -10 30 -15 25 Nov 15 Dec 15 May 15 Aug 15 Sep 15 Jun 15 Jul 15 Mar-16
Slide 10: X5 Is Responding to the Challenge
X5 IS RESPONDING TO THE CHALLENGE Drivers for Macro and consumer X5 response pressure Increase in prices for locally produced products Declining/negative real wage growth Decline of food expenditures as a percentage of the customers budget Assortment Price strategy Supplier relations/ cooperat
Slide 11: Retail Market Snapshot
RETAIL MARKET SNAPSHOT Top 10 Russian Food retailers % in total market % in total market # Company name 2014 2015 1 Magnit [1] 6.2% 6.9% 2 Х5 5.2% 6.2% 3 Auchan 2.5% 2.5% 4 Dixy 1.9% 2.1% 5 Lenta 1.5% 1.8% 6 Metro 1.6% 1.5% 7 O‘Key 1.2% 1.2% 8 SPS Holding 0.4% 0.7% 9 Globus 0.4% 0.5% 10 Monetka 0.5%
Slide 12: III. Operational Results
III. OPERATIONAL RESULTS runepmapxer © Tlamépouxa SeNep=npecton 32 KAPYCEAD X5RETALGROUP | 12
Slide 13: Net Retail Sales Summary
NET RETAIL SALES SUMMARY Net retail sales breakdown by formats, RUB mln 171,369 37,541 19,017 2,674 230,601 182,053 Q1 2015 Q1 2016 KEY Pyaterochka, which continues to meet customers’ needs in a challenging macro DRIVERS environment, was the key driver for X5’s growth thanks to: Ambitious expansio
Slide 14: Expansion Summary
EXPANSION SUMMARY Net selling space, th. sq. m. Net selling space added, th. sq. m. Total store base increased to 7,397 stores as of 31 March 3,514 2016 31 Mar 2016 Continued investments into 74 33 existing stores resulted in 359 refurbishments in Q1 2016 2,682 31 Mar 2015 Pyaterochka was the
Slide 15: IV. Financial Results
IV. FINANCIAL RESULTS runepmapxer 6 Tlamépouxa c&oNep=kpectox Bt KAPYCEAD X5RETAILGROUP | 15
Slide 16: Capital Expenditures Overview
CAPITAL EXPENDITURES OVERVIEW Capex breakdown for Q1 2016 Capex breakdown by quarters, Rub mln Total Capex in Q1 2016: 14,329 Rub mln 420 stores 10.2% opened 25,604 1.4% New store openings 20,691 Refurbishments 16,826 14,329 Logistics 33.2% 55.3% 7,942 IT, Maintenance and other Q1 2015 Q2 2015 Q3 20
Slide 17: Debt Structure
DEBT STRUCTURE Debt profile Debt portfolio maturity Rub mln 31 Mar 2016 31 Mar 2015 100% 23% Total Debt 148,991 120,619 38% Short-Term Debt 46,059 14,407 % of total debt 30.9% 11.9% Long-Term Debt 102,932 106,212 30% % of total debt 69.1% 88.1% Net Debt 144,492 115,516 9% 31 Mar 2016 2016 2017 2018
Slide 18: SG&A Expenses Analysis
SG&A EXPENSES ANALYSIS Rub mln Q1 2016 Q1 2015 +/ ( - ), % SG&A (excl. D&A&I), incl.: 41,309 33,355 23.8 as % of Revenue 17.8 18.3 (42) bp Staff costs 18,145 14,592 24.3 as % of Revenue 7.8 8.0 (15) bp Lease expenses 10,625 8,367 27.0 as % of Revenue 4.6 4.6 1 bp Utilities 4,984 4,053 23.0 as % of R
Slide 19: Financial Statement (1/3) Profit and Loss Statement
FINANCIAL STATEMENT (1/3) PROFIT AND LOSS STATEMENT Rub mln Q1 2016 Q1 2015 +/( - ) +/ ( - ), % Revenue 231,611 182,725 48,886 26.8 Net retail sales 230,601 182,053 48,548 26.7 COGS (175,420) (137,829) (37,591) 27.3 Gross profit 56,191 44,896 11,295 25.2 Gross profit margin 24.3 24.6 (31) bp SG&A 46
Slide 20: Financial Statement (2/3) Balance Sheet
FINANCIAL STATEMENT (2/3) BALANCE SHEET Rub mln 31 March 2016 31 March 2015 +/( - ) +/( - )% Total current assets 104,841 93,190 11,651 12.5 Cash & cash equivalents 4,499 5,103 (604) (11.8) Inventories 62,920 52,800 10,120 19.2 Total non-current assets 302,212 244,426 57,786 23.6 Net PP&E 197,319 15
Slide 21: Financial Statement (3/3) Cash Flow
FINANCIAL STATEMENT (3/3) CASH FLOW Rub mln Q1 2016 Q1 2015 +/( - ) +/( - )% Net cash generated from operating activities 5,726 (2,251) n/a n/a Net cash from operating activities before changes in 16,688 13,573 3,115 22.9 working capital Change in Working Capital, incl.: (6,307) (11,139) 4,832 (43.4
Slide 22: X5 Regional Presence
X5 REGIONAL PRESENCE X5 today Multi-format presence in 9 regions North-West region Total stores – 7,397, including: Pyaterochka: 664 North region Volgo - Vyatsky region Perekrestok: 48 ― 6,636 Pyaterochka Pyaterochka: 168 Pyaterochka: 495 Karusel: 17 DC: 6 Perekrestok: 33 ― 486 Perekrestok Karus
Slide 23: X5 Distribution Capabilities
X5 DISTRIBUTION CAPABILITIES Warehouse space as of 31 March 2016 Space, Region # of DCs th. sq. m. Central 434 13 North-West 140 6 6 Volgo-Vyatsky 42 2 Ural 70 6 Central-Chernozemny 23 2 13 Povolzhsky 87 4 South 43 2 Total 839 35 2 2 6 4 Centralization level dynamics 2 85% 78% 78% 76% 75% 70% 2010 2
Slide 24: Appendices I. Performance Summary of Key Formats
APPENDICIES I. PERFORMANCE SUMMARY OF KEY FORMATS 24
Slide 25: Pyaterochka Summary (1/2)
PYATEROCHKA SUMMARY (1/2) 6,636 stores at 31 Mar 2016, 2,590 th. sq. m. of selling space 33.8% increase y-o-y (at 31 Mar 2016), 39.3% increase y-o-y Q1 2016 net retail sales – 551 mln of customers (Q1 2016), RUB 171.4 bn, 26.5% increase y-o-y 32.3% increase y-o-y Q1 2016 LFL Results Share of X5's Q1
Slide 26: Pyaterochka Summary (2/2)
PYATEROCHKA SUMMARY (2/2) Q1 2016 net retail sales growth: Q1 2016 selling space growth: Q1 2016 sales densities: 32.3% increase y-o-y 39.3% increase y-o-y 1.9% decline y-o-y Net Sales Growth (% y-o-y) Net Selling Space Growth (% y-o-y) Sales Densities Net (th. RUB/sq.m. [1]) 34.8% 291289 35.3% 289
Slide 27: Summary of Pyaterochka Strategy
SUMMARY OF PYATEROCHKA STRATEGY Pyaterochka is a key growth engine for X5 thanks to its customer value proposition, which has already proved its efficiency and resilience to the crisis Focus on maximum sustainable growth rate, entry and development in new regions with full coverage of all location
Slide 28: Perekrestok Summary (1/2)
PEREKRESTOK SUMMARY (1/2) 486 stores at 31 Mar 2016, 494 th. sq. m. of selling space 20.0% increase y-o-y (at 31 March 2016), 17.7% increase y-o-y Q1 2016 net retail sales – 82 mln of customers (Q1 2016), RUB 37.5 bn, 18.2% increase y-o-y 14.6% increase y-o-y Q4 2015 LFL Results Share of X5's Q1 201
Slide 29: Perekrestok Summary (2/2)
PEREKRESTOK SUMMARY (2/2) Q1 2016 net retail sales growth: Q1 2016 selling space growth: Q1 2016 sales densities: 18.2% increase y-o-y 17.7% increase y-o-y 0.8% increase y-o-y Net Sales Growth (% y-o-y) Net Selling Space Growth (% y-o-y) Sales Densities Net (th. RUB/sq.m. [1]) 18.2% 17.7% 12.9% 16.4
Slide 30: Summary of Perekrestok Strategy
SUMMARY OF PEREKRESTOK STRATEGY Perekrestok has made significant progress fine-tuning its value proposition in 2015, including an updated product range, rebranding and refurbishment programme Development in Moscow and St. Petersburg is a priority, critical mass growth in regional cities with >1 ml
Slide 31: Karusel Summary (1/2)
KARUSEL SUMMARY (1/2) 91 stores as of 31 Mar 2016: 395 th. sq. m. of selling space 9.6% increase y-o-y (as of 31 Mar 2015), up 9.1% y-o-y Q1 2016 net retail sales: 31 mln of customers (Q1 2016), RUB 19.0 bn 6.3% increase y-o-y 2.5% increase y-o-y Q4 2015 LFL Results Share of X5's Q1 2016 sales: ~8%
Slide 32: Karusel Summary (2/2)
KARUSEL SUMMARY (2/2) Q1 2016 net retail sales Q1 2016 selling space Q1 2016 sales densities: growth: 6.3% increase y-o-y growth: 9.1% increase y-o-y 6.4% increase y-o-y Net Sales Growth (% y-o-y) Net Selling Space Growth (% y-o-y) Sales Densities Net (th. RUB/sq.m. [1]) 8.8% 9.1% 211 204 210 210 15
Slide 33: Summary of Karusel Strategy
SUMMARY OF KARUSEL STRATEGY Development and testing of value proposition is at the core of Karusel's strategic agenda, as well as a focus on operations and efficiencies Gradual finalisation and testing of compact city hypermarket model with focus on price perception Transition to active growth a