X5 Corporate Center · RUS:X5

X5 Corporate Center — X5 Retail Group — Q4 2020 Earnings Presentation

36 slides from X5 Corporate Center's earnings presentation, 2021

  1. Slide 1: Q4 2020 Financial Results

    | Results >X5 RETAIL GROUP inancia Q4 2020 F

  2. 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 information and opinio

  3. Slide 3: I. Highlights

    I. HIGHLIGHTS

  4. Slide 4: Strategic Highlights

    STRATEGIC HIGHLIGHTS  Market leader in Russian food retail, 12.8% market share in 12M 2020  Strategy is aimed at maintaining leadership  X5 is a multi-format retailer with focus on two largest segments of the Russian food retail - proximity and supermarkets  Balanced approach to expansion  Fast

  5. Slide 5: Key Results Q4 2020

    KEY RESULTS Q4 2020  12.7% revenue growth at  8.3% YoY selling space growth in Q4 2020 (12.6% net retail in 2020 (+1,410 new stores sales growth in Q4 2020) added, net)  5.1% LFL sales growth  13% of X5 stores operate in new in Q4 2020 concept as of Q4 2020 (new CVP launched in 2019)  6.2% EBIT

  6. Slide 6: Operational Highlights (Annual)

    OPERATIONAL HIGHLIGHTS (ANNUAL) Net retail sales dynamics, RUB bn LFL sales, % y-o-y growth CAGR 2016-2020: 17.8% 14.2% CAGR 2018-2020: 13.8% 1,973 1,728 1,525 1,287 7.7% 1,026 5.4% 5.5% 4.0% 1.5% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Selling space, th. sq. m Number of stores, end of per

  7. Slide 7: Financial Highlights (Annual)

    FINANCIAL HIGHLIGHTS (ANNUAL) Revenue dynamics, RUB bn Gross profit & gross margin CAGR 2016-2020: 17.6% CAGR 2016-2020: 18.2% CAGR 2018-2020: 15.2% 14.1% CAGR 2018-2020: 14.8% 24.2% 23.9% 24.1% 24.6% 24.6% 1,978 1,734 14.4% 1,533 1,295 487 1,034 426 370 309 250 2016 2017 2018 2019 2020 2016 2017 20

  8. Slide 8: Quality of New Openings

    QUALITY OF NEW OPENINGS Cash return on new store opened >30% +2.5 p.p. y-o-y Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Note: Opened 12-36 months ago Share of stores in ‘clinic’ 17,707 17,352 17,025 16,658 16,297 6.4% 6.3% 5.3% 4.1% 3.6% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Number of stores, eop Sha

  9. Slide 9: Sales Density Stabilisation / Impact of Regional Mix

    SALES DENSITY STABILISATION IMPACT OF REGIONAL MIX Unit: ‘000 RUB/m2 (annualised) Overall 262 260 256 257 253 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Moscow & St Petersburg Rest of Russia Moscow region & Leningrad region 355 376 353 375 374 374 214 347 370 342 211 333 207 204 202 Q4 Q1 Q2 Q3 Q4 Q4 Q

  10. Slide 10: II. Market Overview

    II. MARKET OVERVIEW

  11. Slide 11: Macro Environment (1/2)

    MACRO ENVIRONMENT (1/2) The main factor of the decline in real food The decrease in real disposable income in retail trade in 2020 was the self-isolation 2020 was due to the transition to part-time regime amid the spread of COVID-19, as well employment and the placement of as the seasonal factor of

  12. Slide 12: Macro Environment (2/2)

    MACRO ENVIRONMENT (2/2) Consumer sentiment deteriorated in Q2 The main factor behind the decline in 2020 driven by the situation with COVID-19 industrial production was the reduction in and slightly improved in H2 due to the domestic and foreign demand, which began easing of pandemic related restric

  13. Slide 13: X5 vs. Russian Food Retail in Top-Line Growth

    X5 VS. RUSSIAN FOOD RETAIL IN TOP-LINE GROWTH 33% 28% 28% 30% 25% 23% 21% 21% 20% 19% 18% 18% 14% 19% 13% 14% 12% 14% 11% 9% 10% 10% 9% 9% 8% 8% 10% 6% 7% 5% 8% 4% 4% 7% 2% 5% 4% 2% 3% 2% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 X5 y-o-y revenue growth Top-10 Market Food CPI Source: Infolin

  14. Slide 14: Russian Retail Market Snapshot

    RUSSIAN RETAIL MARKET SNAPSHOT Top 10 Russian food retailers % market share % market share # Company name 2020 2019 1 Х5 12.8% 11.5% 2 Magnit 8.8% 7.6% 3 DKBR 6.6% 5.7% 4 Lenta 2.7% 2.5% 5 Auchan 1.5% 1.5% 6 Svetofor 1.3% 0.7% 7 Metro 1.2% 1.1% 8 O`KEY 1.1% 1.0% 9 Monetka 0.8% 0.7% 10 Vkusvill 0.8%

  15. Slide 15: III. Operational Results Q4 2020

    III. OPERATIONAL RESULTS Q4 2020

  16. Slide 16: X5 Operational Summary (Quarterly)

    X5 OPERATIONAL SUMMARY (QUARTERLY) Net retail sales Traffic, mln customers Net selling space (eop) 1,359 1,401 1,360 12.0% 11.0% 10.7% 1,327 9.6% 8.3% 15.9% 15.4% 1,205 13.2% 12.7% 11.0% 7,510 7,680 7,840 526 7,239 7,327 467 468 493 486 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020

  17. Slide 17: Q4 2020 Results: X5 Net Retail Sales Summary

    Q4 2020 RESULTS: X5 NET RETAIL SALES SUMMARY Net retail sales breakdown by retail format, RUB mln Hypermarkets Hypermarkets 24,296 12,818 91,930 Supermarkets 78,793 Supermarkets +12.6% 467,299 526,358 421,558 364,210 Proximity stores Proximity stores Q4 2019 Q4 2020 KEY DRIVERS  Pyaterochka, which

  18. Slide 18: Q4 2020 Results: Expansion Summary

    Q4 2020 RESULTS: EXPANSION SUMMARY Net selling space, th. sq. m Net selling space added in 8.3% Q4 2020, th. sq. m  Total store base increased to 17,707 stores as of 7,840 31 December 2020 7,239 Hypermarkets  Pyaterochka was the main driver (3) 36 for the store base increase with a 127 th. sq. m s

  19. Slide 19: X5 Regional Presence

    X5 REGIONAL PRESENSE X5 today  Multi-format presence in seven Federal Districts  Total stores – 17,707, including: ― 16,709 Pyaterochka stores ― 933 Perekrestok supermarkets ― 56 Karusel hypermarkets North North Format Unit Southern Central Volga Ural Siberian Total Caucasus Western 323 1,660 6,14

  20. Slide 20: X5 Distribution Capabilities

    X5 DISTRIBUTION CAPABILITIES Warehouse space as of 31 December 2020 Space, Federal district # of DCs th. sq. m Central 658 18 6 North-Western 150 6 Volga 230 9 18 Ural 148 6 9 6 Southern 141 5 5 Siberian 37 1 1 Total 1,364 45 Centralisation levels Highlights for Q4 2020  X5 continued the implementa

  21. Slide 21: IV. Financial Results Q4 2020

    IV. FINANCIAL RESULTS Q4 2020

  22. Slide 22: X5 Quarterly Financial Highlights

    X5 QUARTERLY FINANCIAL HIGHLIGHTS (QUARTERLY) Revenue Gross profit & gross margin SG&A (excl. D&A&I&LTI)[1] 25.3% 25.1% 17.9% 18.1% 17.9% 18.6% 15.6% 15.3% 24.3% 17.5% 12.9% 12.7% 23.9% 23.8% 24.2% 10.9% 98.5 14.3% 528.8 124.7 122.2 126.1 128.1 84.7 86.4 87.3 493.6 486.6 112.2 114.2 83.9 469.2 469.0

  23. Slide 23: X5 Capital Expenditures

    X5 CAPITAL EXPENDITURES Capex breakdown, Q4 2020 Capex dynamics by quarter, RUB mln 25,889 28,034 21,641 22,839 17,416 24% New store openings 33% Refurbishments Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 RUB Logistics IT 28 bn Expected change in Capex structure Maintenance 8.3% y-o-y 15% Other 3% 4% 8%

  24. Slide 24: X5 Debt Structure

    X5 DEBT STRUCTURE Debt profile Debt portfolio maturity 100% 29% RUB mln 31 Dec 2020 31 Dec 2019 Total Debt 261,947 227,933 32% Short-Term Debt 77,026 74,755 % of total debt 29.4% 32.8% 31% Long-Term Debt 184,921 153,718 % of total debt 70.6% 67.2% 8% Net Debt 241,939 209,331 31 Dec 2020 2021 2022 20

  25. Slide 25: Q4 2020: Adjusted SG&A Expenses Analysis

    Q4 2020: ADJUSTED SG&A[1] EXPENSES ANALYSIS Q4 2020 analysis as percentage of revenue 17.9% (75) b.p. 18.6% 0.9% 27 b.p. 1.1% 1.1% 14 b.p. 1.3% 1.1% 11 b.p. 1.2% 14.3% 2.1% (2) b.p. Third party services 2.1% 1.2% 1.1% Other expenses 1.1% 4.8% (4) b.p. 4.7% Other store costs 2.1% 0.6% Utilities Lease

  26. Slide 26: Financial Statements (1/3): Profit and Loss Statement

    FINANCIAL STATEMENTS (1/3) PROFIT AND LOSS STATEMENT IAS 17 IFRS 16 RUB mln Q4 2020 Q4 2019 +/( - ) +/ ( - ), % Q4 2020 Revenue 528,760 469,217 59,543 12.7% 528,760 Net retail sales 526,358 467,299 59,059 12.6% 526,358 COGS (402,690) (356,976) (45,714) 12.8% (400,666) Gross profit 126,070 112,241 13

  27. Slide 27: Financial Statements (2/3): Balance Sheet (IFRS 16)

    FINANCIAL STATEMENTS (2/3) BALANCE SHEET (IFRS 16) RUB mln 31 Dec 2020 31 Dec 2019 Total current assets 206,284 179,754 Cash & cash equivalents 20,008 18,602 Inventories 144,393 127,462 Total non-current assets 966,945 894,576 Right-of-use assets 480,511 428,166 Net PP&E 322,707 315,257 Goodwill 104

  28. Slide 28: Financial Statements (3/3): Cash Flow Statement

    FINANCIAL STATEMENTS (3/3) CASH FLOW STATEMENT (IAS 17 AND IFRS 16) IAS 17 IFRS 16 RUB mln Q4 2020 Q4 2019 +/( - ) +/ ( - ), % Q4 2020 Net cash generated from 20,353 28,935 (8,582) (29.7)% 36,057 operating activities Net cash from operating activities before 32,858 29,740 3,118 10.5% 57,957 changes

  29. Slide 29: Appendix: Performance Summary of Key Formats

    APPENDIX PERFORMANCE SUMMARY OF KEY FORMATS

  30. Slide 30: Pyaterochka Summary (1/3)

    PYATEROCHKA SUMMARY (1/3) RUSSIA’S #1 PROXIMITY NETWORK BY REVENUE 16,709 stores as of 6,542 th. sq. m of selling space 31 December 2020, as of 31 December 2020, 8.8% increase y-o-y +9.5% y-o-y Q4 2020 net retail sales – 1,190 mln of customer visits in RUB 421.6 bn, Q4 2020, +2.0% y-o-y 15.7% increa

  31. Slide 31: Pyaterochka Proximity Stores Summary (2/3)

    PYATEROCHKA PROXIMITY STORES SUMMARY (2/3) Q4 2020 net retail sales: Q4 2020 selling space: Q4 2020 sales densities: 15.7% increase y-o-y 9.5% increase y-o-y 4.7% increase y-o-y Net sales growth (% y-o-y) Net selling space growth (% y-o-y) Net sales densities (th. RUB/sq. m[1]) 252 255 249 248 247 2

  32. Slide 32: Pyaterochka Format Strategy Highlights

    PYATEROCHKA PROXIMITY STORES SUMMARY (3/3) FORMAT STRATEGY HIGHLIGHTS  Increase number of loyal customers and maximise share of their wallet: − New CVP and further adaptation of assortment − Leadership in NPS and service level − Better personnel turnover and engagement − Focus on operational effici

  33. Slide 33: Perekrestok Supermarkets Summary (1/4)

    PEREKRESTOK SUPERMARKETS SUMMARY (1/4) RUSSIA’S #1 SUPERMARKET 933 stores as of 1,014 th. sq. m. of selling 31 December 2020, space as of 31 December 2020, 10.0% increase y-o-y 15.4% increase y-o-y Q4 2020 net retail sales of 154 mln customers in Q4 2020, RUB 91.9 bn, -4.8% y-o-y 16.7% increase y-o-

  34. Slide 34: Perekrestok Supermarkets Summary (2/4)

    PEREKRESTOK SUPERMARKETS SUMMARY (2/4) Q4 2020 net retail sales: Q4 2020 selling space: Q4 2020 sales densities: 16.7% increase y-o-y 15.4% increase y-o-y 1.3% decrease y-o-y Net sales growth (% y-o-y) Net selling space growth (% y-o-y) Net sales densities (th. RUB/sq. m[1]) 344 337 332 333 335 334

  35. Slide 35: Perekrestok Format Strategy Highlights

    PEREKRESTOK SUMMARY (3/4) FORMAT STRATEGY HIGHLIGHTS  Value proposition and adapting to customer needs: − Further adaptation of assortment with focus on fresh, F&V, ready-to-eat − Omni-channel development − Targeted loyalty system and personalised promo − Best-in-class service, further increase of

  36. Slide 36: Perekrestok Online: On Track to Becoming #1 in Russian E-Grocery

    PEREKRESTOK SUMMARY (4/4): ONLINE: ON TRACK TO BECOMING #1 IN RUSSIAN E-GROCERY Net sales, RUB mln Average customer spending per 4,747 month, RUB ths 3,592 11.6 2,836 2,096 6.7 x1.6 6.0 1,630 891 867 922 636 174 204 276 5.6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Before Online launch After Online launch

X5 Retail Group — Q4 2020 Earnings Presentation on 6ix