X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — IGD Global Retailing Conference 2008
18 slides from X5 Corporate Center's conference presentation, May 2008
Slide 1: Perspectives on Russia & Ukraine
Perspectives on Russia & Ukraine Antonio Melo Chief Operational Officer IGD Conference Global Retailing ’08 New Horizons, Bright Ideas London, May 2008 p. 1
Slide 2: Russian Food Retail Market is One of the Fastest Growing in the World
Russian Food Retail Market … … is One of the Fastest Growing in the World ... Consumer Spending -07 2006 f c.32% th o Grow • Russian consumer spending is growing steadily USD 578 bln -06 2003 f c.30% – It increased at a CAGR of 30% from 2003 to Ro USD 437 bln CAG 2006, and… USD 201 bln – …grew by an
Slide 3: Russian Food Retail Market is Very Immature
Russian Food Retail Market … is Very Immature Modern Formats(1) Evolution & Forecast • Modern retail formats grow much faster than the total food retail market: Hypemarkets Supermarkets – 2003-06 CAGR of 52.1%; Soft Discounters – 2007 growth of 49.4%. 13% Traditional market 12% • But at the end of 2
Slide 4: Russian Food Retail Market is Very Fragmented
Russian Food Retail Market… … is Very Fragmented Top-10 Historical Growth Rates Top-10 Market Share, 2003 – 2007 TOP-10 growth rate 2003 2007 72% 5% 66% 13% 75% 57% 48% 48% 50% 25% 2003 2004 2005 2006 2007 • At the end of 2007 Top 10 players accounted for only 95% 87% 13% of the market compared to 6
Slide 5: Ukrainian Food Retail Market Also Offers Significant Growth Potential
Ukrainian Food Retail Market … … Also Offers Significant Growth Potential… • Second largest country in Central and Eastern Share of Modern Retail Formats in Ukraine Europe in terms of population Hypermarkets Supermarkets • Fast growing consumer spending Soft Discounters Traditional Trade • Fast grow
Slide 6: Russian and Ukrainian Markets Have Just Entered the Phase of Rapid Growth
Russian and Ukrainian Markets … … Have Just Entered the Phase of Rapid Growth of Organized Retail Sources: Roland Berger Strategy Consultants p. 6
Slide 7: X5 Retail Group: a Clear Leader in the Russian Food Retail Market
X5 Retail Group… … a Clear Leader in the Russian Food Retail Market X5 today.. # Company FY2007 % in • #1 food retailer in Russia in terms of revenue Sales Top 10 • USD 5,320 million of net revenues in 2007 (USD mln) • Strong international management team 1. X5 5,320 21.4% • 868 company-managed stor
Slide 8: Strategy Diversified Across Formats
Strategy Diversified Across Formats… …The Largest Multi-Format Food Retailer In Russia Soft Discount X5 ‘07 Sales Break Down by Format Stores Data as of 31 December 2007 7% X5 Net Retail Sales of • 674 stores USD 5,284 mln • Total net selling space – 357,517 sq. m. • Sales per sq. m. – USD 11,375 •
Slide 9: Strategy Diversified Across Geography
Strategy Diversified Across Geography… ...National Presence With Leading Position in Moscow and St. Petersburg 2007 Net Retail Sales by Region 2007 Sales, EOP Store Locations and Selling Space FY07 Net Retail Sales of USD 5,284 million Region FY07 Net Selling No of Net Retail Space Stores Sales ($m)
Slide 10: Premium Growth Prospects
Premium Growth Prospects ...Sales Growth Driven By... • Pricing Initiatives • Improving loyalty • Optimising product programs Like-for-like Sales assortment • Improving merchandising / store layouts • Strong pipeline of new store openings New Store Openings – Commitment to Moscow & St. Petersburg –
Slide 11: Like-for-like Sales Driven By...
Like-for-like Sales... …Driven By… Pricing Initiatives Group 2007 LFL (1) Performance by Format • Price offers for a group of SKUs during a Based on RUR-denominated Basket Traffic certain period gross sales 22% 19% 20% • In/out actions 17% • Packaged offers 6% 14% 9% 11% Rationalizing Assortment 13%
Slide 12: New Store Openings Through Expansion Into European Russia & Urals
New Store Openings … ... Through Expansion Into The European Part Of Russia & Urals Key priority area for expansion St. Petersburg Pskov Veliky Novgorod Total Area(1) Total Population(1) Regions Cherepovez (million km2, %) (million, %) Tver’ Vologda Smolensk Yaroslavl European Part of MOSCOW Kostrom
Slide 13: Karusel Acquisition: Compelling Investment Proposition
Karusel Acquisition(1)… ...Compelling Investment Proposition Significant Step-Up in Scale of reinforce its position as Russia’s largest food retail operator in terms of X5’s Business revenue and increase X5’s lead ahead of its closest competitors by over 30%(2) Immediate Position as a immediatel
Slide 14: X5 Business Strategy
X5 Business Strategy Supplier Relationship Enhancement & Logistics Infrastructure Development Supplier Relationship Enhancement Logistics Infrastructure Development • Relationship with suppliers – one of our key • Total DCs area operated by X5 at the end of competitive strengths 2007 was appr. 144 t
Slide 15: X5 Track Record of Operating Performance
X5 Track Record of Operating Performance LFL(1) Gross Margins Based on RUR-denominated % of net sales gross sales 29% 25.2% 26.7% 26.4% 20% 15% 2006 2007 Q1 2008 2005 2006 2007 Number Of Stores Net Selling Space 700 Thousand square meters 1,000 15 60 600 800 179 500 46 12 192 600 400 156 300 163 400
Slide 16: X5 Track Record of Financial Performance
X5 Track Record of Financial Performance ...Strong Growth Combined With Highly Attractive Margins USD mln 2007 2006 % change, y-o-y Net Sales 5,320.4 3,485.4 53% Retail 5,284.3 3,460.4 53% Gross Profit 1,403.9 928.9 51% % Gross Margin 26.4% 26.7% EBITDA 479.3 296.7 62% % EBITDA Margin 9.0% 8.5% Oper
Slide 17: Q1 Trading Update
Q1 Trading Update …Continuing Strong Performance Q1 2008 LFL Breakdown per Region • 61% increase in net retail sales in Q1-08 over Q1-07 36% • 29% LFL growth in Q1-08 28% 29% • 62 new stores opened adding 30,087 sq. m. of net selling space 23% 13% 17% 19% in Q1-08 14% 13% 16% 10% Q1 2007 Q1 2008 YoY
Slide 18: 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
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