X5 Corporate Center · RUS:X5

X5 Corporate Center — X5 Retail Group — Q3 2021 Earnings Presentation

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

  1. Slide 1: Q3 2021 Financial Results

    I Results )X5 RETAIL GROUP inancia Q3 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 Q3 2021

    KEY RESULTS Q3 2021  11.7% revenue growth  7.5% YoY selling space growth in Q3 2021 (11.4% net retail in Q3 2021 (+353 new stores sales growth in Q3 2021) added, net)  4.8% LFL sales growth  23% of X5 stores operate in new in Q2 2021 concept as of Q3 2021 (new CVP launched in 2019)  12.9% 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 267 264 262 262 261 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Moscow & St Petersburg Rest of Russia Moscow region & Leningrad region 223 376 375 358 220 373 374 353 354 355 371 351 217 215 211 Q3 Q4 Q1 Q2 Q3 Q3 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 15 Y-o-y growth rates, % 2.3 Y-o-y growth rates, % 11.0 2.1 9.0 1.9 7.0 10 1.7 1.5 5.0 1.3 3.0 5 1.1 1.0 0.9 (1.0) 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% 12% 9% 10% 10% 9% 8% 9% 8% 10% 7% 6% 5% 8% 8% 7% 4% 4% 2% 5% 3% 2% 2% 2012 2013 2014 2015 2016 2017 2018 2019 2020 9M 2021 X5 y-o-y revenue growth Top-10 Market Food CPI Source: Infoline, X5

  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 Q3 2021

    III. OPERATIONAL RESULTS Q3 2021

  16. Slide 16: X5 Operational Summary (Quarterly)

    X5 OPERATIONAL SUMMARY (QUARTERLY) Net retail sales Traffic, mln customers Net selling space (eop) 1,478 1,497 15.4% 1,401 1,360 12.7% 1,276 9.6% 8.3% 8.3% 7.4% 6.9% 10.7% 11.4% 8.1% 7,840 7,936 8,063 8,212 7,680 526 544 541 486 506 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2020 Q4 2020 Q1 2021 Q2

  17. Slide 17: Q3 2021 Results: X5 Net Retail Sales Summary

    Q3 2021 RESULTS: X5 NET RETAIL SALES SUMMARY Net retail sales breakdown by retail format, RUB mln Hypermarkets Hypermarkets 11,207 6,541 71,555 78,856 Supermarkets* Supermarkets +10.3% 481,653 531,289 445,169 398,890 Proximity stores Proximity stores Q3 2020 Q3 2021 KEY DRIVERS  Pyaterochka, which

  18. Slide 18: Q3 2021 Results: Expansion Summary

    Q3 2021 RESULTS: EXPANSION SUMMARY Net selling space, th. sq. m Net selling space added in 6.9% Q3 2021, th. sq. m  Total store base increased to 18,648 stores as of 8,212 7,680 30 September 2021 Hypermarkets  Pyaterochka was the main driver (28) for the store base increase with a 127 th. sq. m se

  19. Slide 19: X5 Regional Presence

    X5 REGIONAL PRESENSE X5 today  Multi-format presence in seven Federal Districts  Total stores – 18,648, including: ― 17,600 Pyaterochka stores ― 980 Perekrestok supermarkets ― 34 Karusel hypermarkets North North Format Unit Southern Central Volga Ural Siberian Total Caucasus Western 353 1,813 6,38

  20. Slide 20: X5 Distribution Capabilities

    X5 DISTRIBUTION CAPABILITIES Warehouse space as of 30 September 2021 Space, Federal district # of DCs th. sq. m Central 561 14 6 North-Western 150 6 Volga 230 9 14 Ural 157 7 9 7 Southern 143 5 5 Siberian 70 2 2 Total 1,311 43 Centralisation levels Highlights for 9M 2021  X5 continued the implement

  21. Slide 21: IV. Financial Results Q3 2021

    IV. FINANCIAL RESULTS Q3 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] 26.2% 17.9% 18.6% 19.2% 17.9% 18.8% 15.3% 25.1% 25.2% 25.3% 25.8% 12.7% 10.7% 11.7% 23.8% 102.1 8.1% 98.5 97.1 97.8 140.2 142.2 14.3% 138.1 528.8 546.5 543.6 122.2 126.1 127.6 87.3 486.6 507.2

  23. Slide 23: X5 Capital Expenditures

    X5 CAPITAL EXPENDITURES Capex breakdown, Q3 2021 Capex dynamics by quarter, RUB mln 28,034 22,839 23,907 20,583 20,617 16% New store openings Refurbishments Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 40% RUB Logistics 13% IT 20.6 bn Expected change in Capex structure Maintenance -9.7% y-o-y Other 3% 4%

  24. Slide 24: X5 Debt Structure

    X5 DEBT STRUCTURE Debt profile Debt portfolio maturity 100% 3% 34% RUB mln 30 Sep 2021 30 Sep 2020 Total Debt 242,928 228,291 46% Short-Term Debt 67,983 75,520 % of total debt 28.0% 33.1% Long-Term Debt 174,945 152,771 17% % of total debt 72.0% 66.9% Net Debt 230,031 216,619 30 Sep 2021 2021 2022 20

  25. Slide 25: Q3 2021: Adjusted SG&A Expenses Analysis

    Q3 2021: ADJUSTED SG&A[1] EXPENSES ANALYSIS Q3 2021 analysis as percentage of revenue 91 b.p. 18.9% 18.0% 0.9% 0.8% 15 b.p. 1.4% 1.1% 27 b.p. 1.1% 1.1% (5) b.p. 14.5% 2.0% 2.0% 5 b.p. 0.9% Third party services 1.2% 1.0% Other expenses 4.9% 5.0% (11) b.p. 2.0% Other store costs 0.7% 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 Q3 2021 Q3 2020 +/( - ) +/ ( - ), % Q3 2021 Revenue 543,586 486,641 56,945 11.7% 543,586 Net retail sales 540,718 485,552 55,165 11.4% 540,718 COGS (403,423) (364,415) (39,008) 10.7% (401,416) Gross profit 140,163 122,226 17

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

    FINANCIAL STATEMENTS (2/3) BALANCE SHEET (IFRS 16) RUB mln 30 Sep 2021 30 Sep 2020 Total current assets 190,547 171,545 Cash & cash equivalents 12,897 11,672 Inventories 146,278 128,683 Total non-current assets 989,257 942,860 Right of use asset 496,173 462,607 Net PP&E 324,745 319,549 Goodwill 105,

  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 Q3 2021 Q3 2020 +/( - ) +/ ( - ), % Q3 2021 Net cash generated from operating 45,055 24,547 20,508 83.5% 61,087 activities Net cash from operating activities before 42,250 38,104 4,146 10.9% 68,450 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 17,600 stores as of 6,909 th. sq. m of selling space 30 September 2021, as of 30 September 2021, 7.4% increase y-o-y +7.7% y-o-y Q3 2021 net retail sales – 1,325 mln of customer visits in RUB 448.1 bn, Q3 2021, +6.7%

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

    PYATEROCHKA PROXIMITY STORES SUMMARY (2/3) Q3 2021 net retail sales: Q3 2021 selling space: Q3 2021 sales densities: 12.1% increase y-o-y 7.7% increase y-o-y 2.8% 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]) 16.3% 18.4% 17.4% 17.

  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 980 stores as of 1,081 th. sq. m. of selling 30 September 2021, space as of 30 September 2021, 8.3% increase y-o-y 10.5% increase y-o-y Q3 2021 net retail sales of 161 mln customers in Q3 2021, RUB 81.5 bn, +11.3% y-o-y 13.5% increase y-

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

    PEREKRESTOK SUPERMARKETS SUMMARY (2/4) Q3 2021 net retail sales: Q3 2021 selling space: Q3 2021 sales densities: 14.1% increase y-o-y 10.5% increase y-o-y 1.5% 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]) 344 337 335 334 330 329

  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 4,188 3,592 11.6 2,836 2,096 6.7 x1.6 6.0 1,630 891 867 922 636 5.6 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Before Online launch After Online launch 2018 2019 2019 2019 2019

X5 Retail Group — Q3 2021 Earnings Presentation on 6ix