X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — FY2013 Earnings Presentation
39 slides from X5 Corporate Center's earnings presentation, Mar 7, 2014
Slide 1: Fourth Quarter and Full Year 2013 Financial Results Conference Call
Fourth Quarter and Full Year 2013 Financial Results Conference Call Stephan DuCharme, X5 CEO Sergey Piven, X5 CFO Moscow, Russian Federation 7 March 2014
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: X5 Financial & Operational Summary
X5 Financial & Operational Summary Net sales dynamics (RUR mln) Customer visits (mln) 534,560 491,122 454,185 1,918 1,793 1,639 342,580 276,543 1,218 996 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Selling space (sq. m.) # of stores (end of period) 2,223 4,544 1,970 3,802 1,727 1,555 3,002 2,4
Slide 4: 2013 Report Card & 2014 Guidance
2013 Report Card & 2014 Guidance 2013 2014 2012 2013 Guidance Guidance Net retails sales, RUR billion 491 - 533 - Net retail sales growth,% 8.3% 11.0 => 8.1% 8.7% 10.0 - 12.0% New stores growth, % 10.5% - 8.0% - LFL sales, % (2.2%) - 0.7% - Selling space, 000 sqm 1,970 - 2,223 - Selling space expans
Slide 5: Financial Overview – FY 2013 vs. FY 2012
Financial Overview – FY 2013 vs. FY 2012 5
Slide 6: Financial Highlights
Financial Highlights USD mln(1) FY 2012 FY 2013 +/( - ) +/( - )% (where applicable) Retail sales 15,762.0 16,726.1 964.1 6.1% Total revenues 15,795.2 16,784.7 989.5 6.3% COGS 12,071.1 12,691.9 620.8 5.1% Gross profit 3,724.2 4,092.8 368.6 9.9% Gross profit margin 23.6% 24.4% - - EBITDA 1,123.8 1,204
Slide 7: Sales & EBITDA Breakdown
Sales & EBITDA Breakdown 3,024 929 834 534,560 2,822 5,190 30,639 491,122 Net sales breakdown, Total: + 9.6% Total: + 4.9% Total: + 4.6% Total: + 62.0% RUR million Central: + 6.1% Central: + 4.4% Central: + 10.6% Central: + 62.0% NW: - 0.9% NW: + 6.3% NW: + 0.9% NW: - Other: + 25.0% Other: + 1.9% Ot
Slide 8: SG&A Breakdown
SG&A Breakdown FY % of Net FY % of Net % change USD mln 2012 Sales 2013 Sales y-o-y Staff Costs (1,298.5) 8.2% (1,356.0) 8.1% 4.4% Lease Expenses (598.5) 3.8% (716.1) 4.3% 19.7% D&A (932.4) 5.9% (409.9) 2.4% (56.0) % Utilities (326.7) 2.1% (357.9) 2.1% 9.6% Third Party Services (126.4) 0.8% (147.2)
Slide 9: Cash Flow Highlights
Cash Flow Highlights +/ - % USD mln FY 2012 FY 2013 +/( - ) change Net Cash From Operating Activities 609.2 891.3 282.1 46.3 % Net Cash from Operating Activities before Changes in Working Capital 1,135.2 1,218.8 83.6 7.4 % Change in Working Capital 7.8 72.8 65.0 836.5 % Net Interest and Income Tax P
Slide 10: Capital Expenditures Overview
Capital Expenditures Overview 2013 Capital Expenditures Capital Expenditures , USD mln 1 Reconstruction 902 & Maintenance 850 25% 709 406 New Store Openings 63% 170 Logistics, IT & Other 12% 2009 2010 2011 2012 2013 Total 2013 CapEx was USD 709 mln Note (1): Capital expenditures prior to 2011 do not
Slide 11: Condensed Balance Sheet
Condensed Balance Sheet1 USD mln 31 December 2012 31 December 2013 +/( - ) +/( - )% Total current assets 2,465.9 2,337.0 (129.0) (5.2) % incl. Cash & cash 407.9 232.6 (175.3) (43.0) % equivalents incl. Inventories 1,114.9 1,144.6 29.8 2.7 % Total non-current assets 7,116.4 6,887.3 (229.2) (3.2) % in
Slide 12: Debt Structure
Debt Structure Debt profile Debt portfolio maturity USD mln 31 Dec 2012 % in total 31 Dec 2013 % in total 37.3% Total Debt 4,027.3 3,376.9 31.8% 27.6% Short-Term Debt 1,680.9 41.7% 937.4 27.8% Long-Term Debt 2,346.4 58.3% 2,439.5 72.2% Net Debt / (Net Cash) 3,619.4 3,144.3 3.3% RUR/USD exch. rate, E
Slide 13: Quarterly Financial Results
Quarterly Financial Results 13
Slide 14: Financial Highlights
Financial Highlights USD million Q-o-Q Y-o-Y Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 (when applicable) +/( - )% +/( - )% Retail sales 4,307.8 4,152.5 4,209.8 3,748.5 4,703.2 25.5 % 9.2 % Total revenues 4,319.9 4,160.0 4,221.6 3,770.6 4,632.4 22.9 % 7.2 % COGS 3,278.2 3,144.0 3,223.4 2,825.5 3,499.0
Slide 15: SG&A Breakdown
SG&A Breakdown % of Net % of Net % of Net % of Net Q4 2012 Q4 2013 USD mln Q3 2013 Q4 2013 Sales Sales Sales Sales (341.6) 7.9% (347.8) 7.5% Staff Costs (314.0) 8.3% (347.8) 7.5% (156.7) 3.6% (189.6) 4.1% Lease Expenses (175.8) 4.7% (189.6) 4.1% (594.9) 13.8% (89.1) 1.9% D&A (102.4) 2.7% (89.1) 1.9%
Slide 16: Cash Flow Highlights
Cash Flow Highlights USD mln Q4 2012 Q4 2013 +/( - ) % change Net Cash From Operating Activities 486.1 709.5 223.4 46.0 % Net Cash from Operating Activities before Changes in Working Capital 348.5 351.5 3.1 0.9 % Change in Working Capital 309.2 426.3 117.0 37.8 % Net Interest and Income Tax Paid (17
Slide 17: Capital Expenditures Overview
Capital Expenditures Overview Q4 2013 Capital expenditures Net Investment Cash Flows, USD mln (1) 244.4 Reconstruction 225.9 & Maintenance 27% 152.4 159.2 New Store Openings 105.3 60% Logistics, IT & Other 13% Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 In Q4 2013, capex focused on organic expansion and
Slide 18: Operational Overview
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Slide 19: Right Team, Operational Model & Focus
Right Team, Operational Model & Focus Executive Board Perekrestok Express, E5.RU Pyaterochka Perekrestok Karusel Supported by Operations Operations Operations strong divisional teams of experienced Marketing Marketing Russian & International retailers Marketing/Category Management and Commercial Dep
Slide 20: X5 Regional Presence
X5 Regional Presence (1) FY 2013 Regional Store Breakdown Overview • Multi-format presence in 62 cities of North region Pyaterochka: 59 European Russia, the Urals and Ukraine with population > 200,000 (2) North-West region Petrozavodsk Pyaterochka: 529 • Total stores – 4,544, including: Perekrestok:
Slide 21: X5 Distribution Capabilities
X5 Distribution Capabilities Distribution center (DC) locations Warehouse Space (1) Space, Region # of DCs th sq. m. Central 346.2 15 North-West 80.4 5 5 Ural 45.1 5 St. Petersburg Povolzhsky 65.1 3 Volgo-Vyatsky 29.1 1 MOSCOW Central-Chernozemny 30.7 2 15 South 13.6 1 Total 610.2 32 N. Novgorod 2 3
Slide 22: Employees – Our Most Valuable Asset
Employees – Our Most Valuable Asset Personnel Overview X5 Headcount Average number of X5 and outsourced (O/S) employees per store 100,000 100,700 102,100 2012 2013 75,500 Chain X5 O/S Total X5 O/S Total 68,500 Pyaterochka 15 4 19 13 4 17 Perekrestok 52 30 82 48 29 77 Karusel 148 51 199 143 50 193 Co
Slide 23: X5 Brands’ Overview
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Slide 24: Pyaterochka
Pyaterochka Selling space (sq. m.) 1,414,102 Surprising customers everyday! 1,191,353 We want to move closer to customers, and 996,054 surprise with cleanliness, freshness and new assortment. 586,311 493,016 Best prices/economical shopping 419,207 Clear, easy store navigation Convenient locati
Slide 25: Perekrestok
Perekrestok Selling space (sq. m.) 383,459 397,750 #1 Supermarket for fresh! 347,266 313,024 Develop fresh categories with an accent on 284,359 quick and easy purchases: 222,362 Number one supermarket for fish Fruits & Vegetables, bread, meat and prepared food – quality and freshness Attractiv
Slide 26: Karusel
Karusel Selling space (sq. m.) 371,293 368,249 375,808 351,753 Convenient shopping, fair prices! 285,581 232,462 Why I shop at Karusel: I can find everything I need for my weekly shopping and more… I don’t overpay – good value for money, no need to drive further 2008 2009 2010 2011 2012 2013 I
Slide 27: Express Convenience Stores
Express Convenience Stores Selling space (sq. m.) 35,223 26,683 12,671 9,222 Convenient urban shopping Convenient shopping in high-traffic zones (near subways, airports, train stations, 2010 2011 2012 2013 office buildings, etc.) Net retail sales dynamics (RUR mln) Large selection of ready to go
Slide 28: Internet Retail Channel - E5.RU
Internet Retail Channel - E5.RU E5.RU Business Model E5.RU at a Glance Russian E-commerce market highlights • Largest internet audience in Europe (monthly audience ~50 mln) • Simple navigation • Market size in 2012 ~ USD 15 bln • Easy order – minimal clicks • Fragmented market structure with Top-10
Slide 29: Corporate Governance
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Slide 30: Corporate Governance
Corporate Governance Corporate Governance Supervisory Board Audit Committee Independent General Meeting of (3 members) Name Position Directors(1) Shareholders Mr. Dmitry Dorofeev Chairman Nomination and Remuneration Committee Mr. Mikhail Fridman Member (4 members) Supervisory Board Mr. David Gould M
Slide 31: Russian Retail Market
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Slide 32: Retail Market Snapshot
Retail Market Snapshot Top-10 Russian retailers, net retail sales 2013 Top-10 Market Share & market evolution % in Retail market (gross sales) & Top 10 share RUR 11.1 trillion Net retail sales % in # Company name total 2013, USD mln top 10 market RUR 9.1 trillion 1 Magnit (1) 17,824 24.8% 5.8% 2 Х5
Slide 33: 2013 Russian Macro & Consumer
2013 Russian Macro & Consumer Real GDP growth, y-o-y Real retail food sales growth, y-o-y Food CPI, y-o-y 8.5% 8.7% 7.7% 3.5% 7.2% 6.5% 2.6% 2.3% 2.5% 1.6% 1.4% 1.3% 1.2% 1.2% 1.6% Q1 13 Q2 13 Q3 13 Q4 13 2013 Q1 13 Q2 13 Q3 13 Q4 13 2013 Q1 13 Q2 13 Q3 13 Q4 13 2013 Real wage growth, y-o-y Unemploy
Slide 34: Appendix 1: 2013 Monthly Results
Appendix 1: 2013 Monthly Results 34
Slide 35: 2013 Expansion
2013 Expansion 2012 2013 Acceleration of store openings in December: 800 742 - Pyaterochka: 204 stores stores - Perekrestok: 6 227 Number of added added - Karusel: 3 183 - Express: 14 Stores Opened, net 81 90 95 79 76 78 68 54 46 51 45 45 39 38 22 41 56 40 18 33 34 3 Jan Feb Mar Apr May Jun Jul Aug
Slide 36: 2013 Net Retail Sales Growth
2013 Net Retail Sales Growth X5 Retail Group Pyaterochka 12.9% 13.0% 15.6% 14.9% 8.7% 10.2% 9.4% 10.8% 11.0% 11.6% 8.0% 8.2% 7.2% 7.7% 8.7% 5.0% 6.2% 5.9% 9.7% 5.4% 7.3% 7.2% 7.3% 7.0% 7.4% 10.1% 6.1% 13.3% 12.2% 5.8% 3.8% 1.3% 6.7% 8.4% 10.0% 5.9% 7.2% 7.9% 10.2% 5.6% 3.4% 6.9% 5.4% 5.8% 7.1% 3.9%
Slide 37: 2013 LFL Sales Dynamics
2013 LFL Sales Dynamics (1) X5 Retail Group Pyaterochka 0.3% 6.5% 5.9% 5.2% 3.1% 0.4 % 1.6% 0.3% 6.1% 0.0% 0.1% 4.4% 2.7 % 1.8% 5.1% 5.5% 0.7 % 4.9% 6.1% 5.8% 5.6% 2.8% 0.4% 3.6% 3.6% 4.4% 4.4% 4.7% 5.0% 2.7 % 2.0% 3.1% 1.2% 0.6% 3.9% 4.4% 2.2% 3.1% 1.7% (2.4 %) (1.6 %) (1.3 %) (0.7 %) (4.0 %) (3.3
Slide 38: 2013 Express Stores Results
2013 Express Stores Results Net Retail Sales Growth, % LFL Sales Growth(1), % 17.9 % 99.5 % 15.0 % 15.6 % 15.6 % 14.8 % 83.1 % 83.7 % 82.9 % 13.0 % 76.5 % 77.2 % 12.2 % 11.9 % 11.6 % 10.4 % 61.1 % 59.2 % 9.6 % 8.2 % 43.8 % 44.3 % 45.0 % 36.7 % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Slide 39: Contact Information
Contact Information IR Department Contact Details Gregory Madick Andrey Napolnov, CFA Executive IR Director Senior IR manager Tel.: +7 (495) 502 97 83 Tel.: +7 (495) 662 8888 ext. 22-455 Mob.: +7 (910) 459 73 56 Mob.: +7 (926) 654 6262 E-mail: Gregory.Madick@X5.ru E-mail: Andrey.Napolnov@X5.ru Addre