X5 Corporate Center · RUS:X5

X5 Corporate Center — X5 Retail Group — Q2 2021 Earnings Presentation

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

  1. Slide 1: Q2 2021 Financial Results

    I Results >X5 RETAIL GROUP inancia Q2 2021 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 Q2 2021

    KEY RESULTS Q2 2021  10.7% revenue growth at  7.4% YoY selling space growth in Q2 2021 (10.4% net retail in Q2 2021 (+336 new stores sales growth in Q2 2021) added, net)  4.0% LFL sales growth  20% of X5 stores operate in new in Q2 2021 concept as of Q2 2021 (new CVP launched in 2019)  8.3% adj

  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% -0.3 p.p. y-o-y Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Note: Opened 12-36 months ago Share of stores in ‘clinic’ 18,295 17,707 17,959 17,352 17,025 5.3% 4.1% 3.6% 3.4% 2.7% Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 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 264 262 262 261 258 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Moscow & St Petersburg Rest of Russia Moscow region & Leningrad region 354 355 376 353 351 374 375 220 373 347 371 217 215 211 207 Q2 Q3 Q4 Q1 Q2 Q2 Q

  10. Slide 10: II. Market Overview

    II. MARKET OVERVIEW

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

    MACRO ENVIRONMENT (1/2) Real food retail trade growth in Q2 2021 was The increase in real disposable income in Q2 driven by the low base effect 2021 was driven by the low base effect 40 Y-o-y growth rates, % 2.3 Y-o-y growth rates, % 11.0 2.1 9.0 35 1.9 7.0 30 1.7 1.5 5.0 25 1.3 3.0 20 1.1 1.0 15 0.

  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 in 2020 was the and started improving in H2 due to the reduction in domestic and foreign demand, easing of pandemic related restriction

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

    X5 VS. RUSSIAN FOOD RETAIL IN TOP-LINE GROWTH 28% 28% 25% 23% 20% 21% 18% 21% 19% 18% 19% 13% 14% 12% 11% 14% 9% 10% 10% 9% 9% 8% 9% 8% 10% 7% 7% 6% 5% 8% 7% 4% 7% 4% 2% 2% 5% 3% 2% 2% 2012 2013 2014 2015 2016 2017 2018 2019 2020 H1 2021 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 Q2 2021

    III. OPERATIONAL RESULTS Q2 2021

  16. Slide 16: X5 Operational Summary (Quarterly)

    X5 OPERATIONAL SUMMARY (QUARTERLY) Net retail sales Traffic, mln customers Net selling space (eop) 1,478 15.4% 1,401 1,360 13.2% 12.7% 1,276 10.7% 9.6% 8.3% 8.3% 7.4% 10.7% 1,205 8.1% 7,680 7,840 7,936 8,063 7,510 493 526 506 544 486 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1

  17. Slide 17: Q2 2021 Results: Net Retail Sales Summary

    Q2 2021 RESULTS: X5 NET RETAIL SALES SUMMARY Net retail sales breakdown by retail format, RUB mln Hypermarkets Hypermarkets 13,837 8,454 69,772 84,344 Supermarkets* Supermarkets +10.5% 489,401 540,888 447,612 405,792 Proximity stores Proximity stores Q2 2020 Q2 2021 KEY DRIVERS  Pyaterochka, which

  18. Slide 18: Q2 2021 Results: Expansion Summary

    Q2 2021 RESULTS: EXPANSION SUMMARY Net selling space, th. sq. m Net selling space added in 7.4% Q2 2021, th. sq. m  Total store base increased to 18,295 stores as of 8,063 30 June 2021 7,510 Hypermarkets  Pyaterochka was the main driver (35) for the store base increase with a 126 th. sq. m selling

  19. Slide 19: X5 Regional Presence

    X5 REGIONAL PRESENSE X5 today  Multi-format presence in seven Federal Districts  Total stores – 18,295, including: ― 17,268 Pyaterochka stores ― 968 Perekrestok supermarkets ― 40 Karusel hypermarkets North North Format Unit Southern Central Volga Ural Siberian Total Caucasus Western 340 1,751 6,29

  20. Slide 20: X5 Distribution Capabilities

    X5 DISTRIBUTION CAPABILITIES Warehouse space as of 30 June 2021 Space, Federal district # of DCs th. sq. m Central 576 15 6 North-Western 150 6 Volga 230 9 15 Ural 148 6 9 6 Southern 143 5 5 Siberian 72 2 2 Total 1,319 43 Centralisation levels Highlights for H1 2021  X5 continued the implementation

  21. Slide 21: IV. Financial Results Q2 2021

    IV. FINANCIAL RESULTS Q2 2021

  22. Slide 22: X5 Quarterly Financial Highlights (Quarterly)

    X5 QUARTERLY FINANCIAL HIGHLIGHTS (QUARTERLY) Revenue Gross profit & gross margin SG&A (excl. D&A&I&LTI)[1] 25.3% 25.1% 25.2% 25.3% 25.6% 18.6% 19.2% 17.5% 17.9% 17.9% 15.3% 12.9% 12.7% 23.8% 8.1% 10.7% 98.5 97.1 97.8 140.1 13.5% 138.1 528.8 546.5 124.7 122.2 126.1 127.6 86.4 87.3 493.6 486.6 507.2

  23. Slide 23: X5 Capital Expenditures

    X5 CAPITAL EXPENDITURES Capex breakdown, Q2 2021 Capex dynamics by quarter, RUB mln 28,034 22,839 23,907 21,641 20,583 14% New store openings Refurbishments 36% Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 RUB Logistics 14% IT 24 bn Expected change in Capex structure Maintenance 10.5% y-o-y Other 3% 4% 7

  24. Slide 24: X5 Debt Structure

    X5 DEBT STRUCTURE Debt profile Debt portfolio maturity 100% 16% RUB mln 30 Jun 2021 30 Jun 2020 31% Total Debt 266,197 231,778 Short-Term Debt 76,274 73,622 42% % of total debt 28.7% 31.8% Long-Term Debt 189,923 158,156 % of total debt 71.3% 68.2% 11% Net Debt 253,349 220,476 30 Jun 2021 2021 2022 2

  25. Slide 25: Q2 2021: Adjusted SG&A Expenses Analysis

    Q2 2021: ADJUSTED SG&A[1] EXPENSES ANALYSIS Q2 2021 analysis as percentage of revenue 39 b.p. 17.9% 17.5% 0.7% 19 b.p. 0.8% 1.1% 25 b.p. 1.4% 1.2% (15) b.p. 1.1% 13.5% 1.8% 8 b.p. 1.9% Third party services 0.9% 1.2% Other expenses 1.0% 4.8% (5) b.p. 4.8% Other store costs 1.9% 0.6% Utilities Lease e

  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 Q2 2021 Q2 2020 +/( - ) +/ ( - ), % Q2 2021 Revenue 546,512 493,631 52,881 10.7% 546,512 Net retail sales 544,409 492,975 51,434 10.4% 544,409 COGS (408,422) (368,904) (39,518) 10.7% (406,416) Gross profit 138,090 124,727 13

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

    FINANCIAL STATEMENTS (2/3) BALANCE SHEET (IFRS 16) RUB mln 30 Jun 2021 30 Jun 2020 Total current assets 191,489 166,432 Cash & cash equivalents 12,848 11,302 Inventories 142,024 128,466 Total non-current assets 990,176 930,177 Right-of-use assets 498,437 455,047 Net PP&E 325,229 318,612 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 Q2 2021 Q2 2020 +/( - ) +/ ( - ), % Q2 2021 Net cash generated from 36,666 17,061 19,605 114.9% 52,710 operating activities Net cash from operating activities before 44,486 41,563 2,923 7.0% 70,397 changes in

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

    APPENDIX PERFORMANCE SUMMARY OF KEY FORMATS

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

    PYATEROCHKA PROXIMITY STORES SUMMARY (1/3) RUSSIA’S #1 PROXIMITY NETWORK BY REVENUE 17,268 stores as of 6,783 th. sq. m of selling space 30 June 2021, as of 30 June 2021, 7.3% increase y-o-y +7.8% y-o-y Q2 2021 net retail sales – 1,304 mln of customer visits in RUB 447.6 bn, Q2 2021, +20.5% y-o-y 10

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

    PYATEROCHKA PROXIMITY STORES SUMMARY (2/3) Q2 2021 net retail sales: Q2 2021 selling space: Q2 2021 sales densities: 10.3% increase y-o-y 7.8% increase y-o-y 3.4% 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]) 252 255 255 256 246 2

  32. Slide 32: Pyaterochka Proximity Stores Summary (3/3): 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 968 stores as of 1,059 th. sq. m. of selling 30 June 2021, space as of 30 June 2021, 12.3% increase y-o-y 16.1% increase y-o-y Q2 2021 net retail sales of 163 mln customers in Q2 2021, RUB 87.9 bn, +49.9% y-o-y 19.8% increase y-o-y Q2 20

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

    PEREKRESTOK SUPERMARKETS SUMMARY (2/4) Q2 2021 net retail sales: Q2 2021 selling space: Q2 2021 sales densities: 19.8% increase y-o-y 16.1% increase y-o-y 2.1% 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]) 344 337 335 334 330 330

  35. Slide 35: Perekrestok Summary (3/4): 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 Summary (4/4): Vprok.ru Perekrestok

    PEREKRESTOK SUMMARY (4/4) VPROK.RU PEREKRESTOK Net sales, RUB mln Average customer spending per 4,747 4,492 4,256 month, RUB ths 3,592 11.6 2,836 2,096 6.7 x1.6 6.0 1,630 891 867 922 636 276 5.6 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Before Online launch After Online launch 2018 2018 2019 2019 2019 201

X5 Retail Group — Q2 2021 Earnings Presentation on 6ix