X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — FY2011 Earnings Presentation
29 slides from X5 Corporate Center's earnings presentation, Apr 19, 2012
Slide 1: Fourth Quarter and Full Year 2011 Financial Results Conference Call
1 Fourth Quarter and Full Year 2011 Financial Results Conference Call Andrei Gusev, X5 Chief Executive Officer Kieran Balfe, X5, Chief Financial Officer Moscow, Russian Federation 19 April 2012
Slide 2: Disclaimer
Disclaimer 2 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 o
Slide 3: X5 - Russia's #1 Retailer
X5 - Russia’s #1 Retailer (1) 3 Russia’s Leading Food Retailers Evolution of X5 Market Share RUR 9.1 trl Sales 2011, % in % in total # Company name USD mln(2) Top-10 market(3) RUR 7.1 trl 1 X5 15,397 29.0% 5.7% 2 Magnit 11,420 21.5% 4.2% RUR 4.9 trl 5.7% 3 Auchan 6,965 13.1% 2.6% 4.4% 4 Metro 5,405
Slide 4: Summary Highlights – 2011
Summary Highlights – 2011 4 Our Business • Russia's largest food retailer in terms of sales – 5.7% of total food retail market • Multi-format brand retail operator: Pyaterochka (Soft Discounter), Perekrestok (Supermarket), Karusel (Hypermarket) plus assorted brand name convenience stores 2011 Operat
Slide 5: 2012 Guidance
2012 Guidance 5 Objective Guidance Focus on • Net retail sales growth of 15% to 20% Sales & • Maintain EBITDA margin above 7% Margins • Strong sales results, expected in second half 2012 • CapEx target of approximately RUR 45 bln for record expansion: Invest in −New stores ~ 60%; Logistics & IT ~ 30
Slide 6: Operational Overview
X5RETAILGROUP | Operational Overview 7, NepekpectoK 2x RAPYCEA
Slide 7: Managed Store Base
Managed Store Base 7 Store openings by format, # of stores 616 20 6 25 526 In 2011, our managed 3,002 store base increased by 65.9%... 1,809 Net added - 577 31.12.2010 Soft discounters Supermarkets Hypermarkets Convenience Kopeyka 31.12.2011 Increase in retail space by format, sq. m. 274 149 21 20 3
Slide 8: Selling Space Additions
Selling Space Additions 8 Comments Selling Area by Format(1) • Net additions in Q4 2011 – 217 stores (198 soft Convenience discounters, 9 supermarkets, 5 hypermarkets, 5 Stores 1% Hypermarkets convenience stores) 21% 9 Total net selling space expansion – 86 th sq. m. • FY 2011 net organic additions
Slide 9: Regional Presence
Regional Presence (1) 9 Moscow & Central region Discounters: 1,159 St. Petersburg & Supermarkets: 192 Store Base Overview North-West region Hypermarkets: 17 Discounters: 438 Convenience stores: 70 Supermarkets: 34 • 533 locations in European Russia and Ukraine Hypermarkets: 17 Petrozavodsk • Total n
Slide 10: Distribution Capabilities
Distribution Capabilities 10 Distribution Center (DC) Locations Warehouse Space Space, Space, Net added in # of DCs Region th sq. m. th sq. m. FY 2011 31-12-2011 31-12-2010 31-12-2011 Central 217.8 302.3 84.5 12 St. Petersburg North-West 70.4 81.7 11.3 5 V.-Vyatsky 17.5 29.8 12.3 2 MOSCOW Urals 34.7
Slide 11: Financial Overview – 2011 vs. 2010
11 Financial Overview – 2011 vs. 2010
Slide 12: Financial Highlights
Financial Highlights 12 USD mln 2011 2010 +/( - ) +/( - )% Retail sales 15,397.3 11,248.1 4,149.2 36.9% Total revenues 15,455.1 11,280.5 4,174.6 37.0% COGS (11,776.1) (8,651.7) 3,124.4 36.1% Gross margin 23.8% 23.3% - - EBITDA 1,130.2 843.6 286.7 34.0% EBITDA margin 7.3% 7.5% - - Effective income ta
Slide 13: Sales & EBITDA Breakdown
Sales & EBITDA Breakdown 13 Increase in net retail sales by format, USD mln 15,397.3 1,604.3 621.0 254.6 28.1 1,641.1 11,248.1 Organic growth accounted for 61.3% of 2011 net retail Organic growth +2,544.8(1) sales growth Net retail sales Soft discounters Supermarkets Hypermarkets Convenience Kopeyka
Slide 14: SG&A Breakdown
SG&A Breakdown 14 % change USD mln FY 2011 % of Net Sales FY 2010 % of Net Sales y-o-y Staff Costs (1,294.3) 8.4% (1,002.1) 8.9% 29.2% Lease Expenses (565.4) 3.7% (372.1) 3.3% 52.0% Other Store Costs (211.7) 1.4% (151.0) 1.3% 40.1% D&A (428.3) 2.8% (298.5) 2.6% 43.5% Utilities (326.8) 2.1% (214.3) 1
Slide 15: Cash Flow Highlights
Cash Flow Highlights 15 +/ - % USD mln FY 2011 FY 2010 +/( - ) change Net Cash From Operating Activities 926 378 548 145% Net Cash from Operating Activities before Changes in Working Capital 1,189 900 289 32% Change in Working Capital 174 (251) 425 n/a Net Interest and Income Tax Paid (437) (271) (1
Slide 16: Capital Expenditures Overview
Capital Expenditures Overview 16 Capital Expenditures in 2011 – USD 911 mln Net Cash Flows From Investing Activities, USD mln 1,656 1,548 659 1,090 997 434 899 894 189 458 245 2007 2008 2009 2010 2011 M&A Organic and business development Approximately 70% of 5-year CFI for organic Total 2011 CapEx w
Slide 17: Condensed Balance Sheet
Condensed Balance Sheet 17 USD mln 31 December 2011 31 December 2010 +/( - ) +/( - )% Total current assets 2,051.3 2,058.2 (6.9) (0.3)% Incl. Cash & cash equivalents 385.0 270.8 114.2 42.2% Incl. Inventories 895.0 1,014.3 (119.3) (11.8)% Total non-current assets 6,759.0 6,705.8 53.2 0.8% Incl. Net P
Slide 18: Debt Structure
Debt Structure 18 Debt profile Comments % in % in % in USD mln 31-Dec-11 30-Sep-11 31-Dec-10 total total total • X5’s net debt to EBITDA ratio improved significantly Total Debt 3,610.0 3,578.0 3,684.8 to 3.13x compared to 3.70x at the end of 2010. Short-Term Debt 913.2 25.3% 770.9 21.5% 508.0 13.8%
Slide 19: Liquidity Update
Liquidity Update 19 Improved Net debt/EBITDA in 2011 Historical Average 3.70x 3.59x 3.57x 3.42x 3.40x 3.13x 3.20x Average: 2.73x 2.22x 2.08x 31 Dec 2010 31 Mar 2011 30 Jun 2011 30 Sep 2011 31 Dec 2011 31 Dec 2006 31 Dec 2007 31 Dec 2008 31 Dec 2009 Stable Leverage and Liquidity Metrics Comments Metr
Slide 20: Share Capital & Corporate Governance
Share Capital & Corporate Governance 20 Share Capital(1) Corporate Governance Treasury Audit Committee Shares (3 members) 0.11% General Meeting of Shareholders Nomination and Free Float Remuneration 32.09% Committee Supervisory Board (4 members) (7 members) Alfa Group Related Party 47.86% Committee
Slide 21: Quarterly Financial Overview
21 Quarterly Financial Overview
Slide 22: Comparison of Quarterly Results
Comparison of Quarterly Results 22 USD mln Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 y-o-y(1),% q-o-q(1),% Retail sales 3,469.5 3,826.1 4,006.0 3,610.7 3,954.6 14.0% 9.5% Total revenues 3,482.8 3,845.4 4,021.4 3,623.0 3,965.3 13.9% 9.4% COGS 2,715.8 2,931.8 3,075.2 2,784.7 2,984.4 9.9% 7.2% Gross marg
Slide 23: Quarterly LFL
Quarterly LFL 23 + 13% + 12% Basket Traffic + 11% 3 + 10% + 10% 4 + 8% 2 2 + 4% 6 + 7% + 7% + 6% 2 10 + 4% 7 5 4 8 8 8 8 2 5 5 2 2 2 2 1 (4) (4) - 2% (1) Q1 09 Q2 09 Q3 09 Q409 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 LFL in 2H2011 negatively impacted by traffic redistribution resulting from
Slide 24: SG&A Breakdown
SG&A Breakdown 24 % of Net % of Net % of Net % of Net Q4 10 Q4 11 USD mln Q3 11 Q4 11 Sales Sales sales sales (293.5) 8.4% (322.6) 8.1% Staff Costs (318.8) 8.8% (322.6) 8.1% (111.0) 3.2% (136.7) 3.4% Lease Expenses (145.9) 4.0% (136.7) 3.4% (45.3) 1.3% (53.3) 1.3% Other Store Costs (54.2) 1.5% (53.3
Slide 25: Appendices
X5RETAILGROUP | Appendices 7, NepekpectoK 2x RAPYCEA
Slide 26: Kopeyka Integration Update
Kopeyka Integration Update 26 Integration – Key facts Rebranding schedule Fast-tracked Substantial efforts to upgrade stores to X5’s 44 45 Rebranding integration standards and integrate within one year. 271 Soft discounters & supermarkets closed for Rebranding approx. 15 and 45 days, respectively fo
Slide 27: Quarterly LFL – by Format
Quarterly LFL – by Format 27 Basket Traffic + 17% + 18% + 17% + 16% + 16% + 13% + 12% 6 + 11% + 10% + 9% Soft 11 9 2 + 3% 12 12 2 Discounters, 6 6 % 11 11 10 9 - 1% 7 8 7 4 4 5 4 2 (4) (3) Q1 09 Q2 09 Q3 09 Q409 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Basket Traffic + 19% + 18% + 8% + 11% 9
Slide 28: Benefits of X5 Multi-Format Strategy
Benefits of X5 Multi-Format Strategy 28 Appeals to diverse customer segments and regional demographics More efficiently integrates acquired stores with varying Ensures a balance between sizes and formats growth and profitability X5’s Multi-Format Strategy Shares knowledge and Scalable efficiencies i
Slide 29: Contact Information
Contact Information 29 IR Department Contact Details Gregory Madick Anastasiya Kvon Andrey Napolnov Executive IR Director IR Director Senior IR manager X5 Retail Group N.V. X5 Retail Group N.V. X5 Retail Group N.V. 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr.