X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Investor Presentation (October 2011)
30 slides from X5 Corporate Center's investor presentation, October 2011
Slide 1: Investor Presentation
1 Investor Presentation October 2011
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: Agenda
Agenda 3 I. Introduction II. Q3 2011 Operational Results & Q2 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision IV. Kopeyka Integration Update
Slide 4: X5 - #1 Russia's Retailer
X5 - #1 Russia’s Retailer 4 Russia’s Leading Food Retailers • X5‟s FY 2010 pro-forma net sales reached USD 13 billion Company FY 2010 Net % % Retail Sales in Top-10 in Total • The Company reported consolidated net retail sales of (USD mln)(1) Market(2) USD 3.6 billion for Q3 2011 X5 Retail Group(3)
Slide 5: X5 Multi-Format Approach
X5 Multi-Format Approach 5 X5 Operates Stores for Every Lifestyle and Family Budget As at 30 September 2011 Soft Net selling space: from 300 to 800 sq. m. Discounters Average assortment: 3,000 SKUs Pricing policy: Lowest price in the market on 100% of assortment Value proposition: Price and convenie
Slide 6: Benefits of X5 Multi-Format Strategy
Benefits of X5 Multi-Format Strategy 6 X5’s Multi-Format Approach Enables the Company to: • Appeal to diverse customer segments and regional demographics • Ensure a balance between growth and profitability • Scale efficiencies in purchasing power, IT and supply chain logistics • Respond effectively
Slide 7: Regional Presence
Regional Presence 7 Moscow & Central North-West region region X5 discounters: 408 X5 discounters: 1,075 X5 supermarkets: 34 As at 30 September 2011, X5: X5 supermarkets: 186 X5 hypermarkets: 17 X5 hypermarkets: 14 St. Petersburg • Multi-format presence in 52(1) cities of European Convenience: 65 Vol
Slide 8: Distribution Infrastructure
Distribution Infrastructure 8 DC locations as at Fruit & Region # of DCs 000 sq. m. Dry Veg Veg. Fresh Frozen Non-Food 30 September 2011(1) Central 12 291.9 v v v v v North -West 5 81.7 v v v v Volgo -Vyatsky 2 29.8 v v v v Urals 4 27.7 v v v v St. Petersburg Centralno- Chernozemny 2 33.7 v v v Psko
Slide 9: Agenda
Agenda 9 I. Introduction II. Q3 2011 Operational Results & Q2 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision IV. Kopeyka Integration Update
Slide 10: Q3 2011 Operational Results
Q3 2011 Operational Results 10 In Q3 2011: Q3 2011 Net Retail Sales(1) • Consolidated net retail sales increased 32% year-on-year in RUR terms RUR billion USD million to RUR 104,979 mln or 39% in USD terms to USD 3,611 mln • Organic sales increased 18% in RUR terms year-on-year while + 39% Kopeyka‟s
Slide 11: Q3 2011 LFL Results
Q3 2011 LFL Results 11 In Q3 2011: Supermarkets’ Q3 2011 LFL Performance(1) • Performance was affected by a slowdown in the Russian retail Based on RUR-denominated market Basket Traffic gross sales • Soft discounters delivered LFL growth of 3%. Traffic was negatively + 17% affected by the high base
Slide 12: Q3 2011 Selling Space Expansion
Q3 2011 Selling Space Expansion 12 • In Q3 2011 X5 added a net 102 stores, which includes 114 soft discounters, six supermarkets, two hypermarkets, 11 convenience Selling Area by Format stores and the closure of 31 Kopeyka stores, for a total expansion of 1% net selling space of 37 th. sq. m. 21% So
Slide 13: Q2 2011 P&L Highlights
Q2 2011 P&L Highlights(1) 13 USD mln Q2 2011 Q2 2010 % change y-o-y Net Sales 4,021.4 2,640.9 52% incl. Retail 4,006.0 2,637.7 52% Gross Profit 946.2 637.8 48% Gross Margin, % 23.5% 24.1% SG&A (822.5) (522.6) 57% % of revenue 20.5% 19.8% ESOP Expense 21.5 (8.4) n/a % of revenue (0.5%) 0.3% EBITDA 28
Slide 14: Q2 2011 Key P&L Developments
Q2 2011 Key P&L Developments(1) 14 Net sales increased 41% year-on-year in RUR terms to RUR 112,626 mln or 52% in USD terms to USD 4,021 mln; Gross profit totaled USD 946 mln, for a gross margin of 23.5%; EBITDA amounted to USD 285 mln, for an EBITDA margin of 7.1%; SG&A expenses as a percen
Slide 15: Q2 2011 Cash Flow Highlights
Q2 2011 Cash Flow Highlights 15 % change USD mln Q2 2011 Q2 2010 y-o-y Net Cash Flows Used in (65.6) (9.5) 589% Operating Activities Net Cash from Operating Activities 23% 293.3 238.6 before Changes in Working Capital Change in Working Capital (241.7) (176.9) 37% Net Interest and Income Tax Paid (11
Slide 16: Liquidity Update
Liquidity Update 16 • As of the end of June 2011, the Company‟s total debt amounted to USD 4,098 mln (at RUR exchange rate of 28.08), out of which 15% was short-term (USD 635 mln) and 85% long-term (USD 3,464 mln). Ruble-denominated borrowings accounted for 90% of X5 net debt at 30 June, 2011; • As
Slide 17: Retail Law and Its Implications
17 Retail Law and Its Implications New Retail Law Came into Effect as of 1 February 2010. Provisions Related to Relationships with Suppliers Became Effective as of 1 August 2010 2010 Implications for Key Restrictions 2010 Implications EstimatedEstimated 2011 Impact Effect on X5 forRetailers Retailer
Slide 18: Agenda
Agenda 18 I. Introduction II. Q3 2011 Operational Results & Q2 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision IV. Kopeyka Integration Update
Slide 19: 2011 Strategic Priorities
19 2011 Strategic Priorities Customer Focus on formats‟ value propositions Focus Further assortment improvements: local sourcing, private label, non-food Organic Step-up in new store openings Expansion Special focus on discounters, selective openings of supermarkets and hypermarkets Moscow
Slide 20: 2011 - Healthy Cash Flow
20 2011 - Healthy Cash Flow illustrative(1) (2) Investing Cash Flow - organic Investing Cash Flow - M&A Operating Cash Flow One-off Retail Law effect USD mln 629 734 427 378 (245) (458) (189) (899) (997) (1,090) (659) 2007 2008 2009 2010 2011F-2013F (1) 2011F-2013F cash flows – not according to scal
Slide 21: Long-Term Vision
21 Long-Term Vision • Successful Implementation of Multi-Format Strategy Creating National Retail [Champion] Leader? • Low Cost, Best-in-Class Retail Operations • Moscow and St. Petersburg as Cash Generators Supporting Growth of Regional Operations National Champion in Retail
Slide 22: Agenda
Agenda 22 I. Introduction II. Q3 2011 Operational Results & Q2 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision IV. Kopeyka Integration Update
Slide 23: Kopeyka Integration - On Track
23 Kopeyka Integration - On Track As of 30 September 2011 the Company has largely completed the rebranding of Kopeyka stores (613 stores) Rebranding & Soft discounters were temporarily closed for 15 days on average for rebranding, while supermarkets took 45 days Re-Launch to convert. X5 also took th
Slide 24: Kopeyka Stores Rebranding Schedule
Kopeyka Stores Rebranding Schedule 24 11 11 11 11 11 11
Slide 25: Kopeyka Stores under Pyaterochka Banners
Kopeyka Stores under 25 Pyaterochka Banners EXTERIOR EXTERIOR BEFORE AFTER INTERIOR INTERIOR
Slide 26: Kopeyka Stores under Pyaterochka Banners (cont'd)
Kopeyka Stores under 26 Pyaterochka Banners (cont’d) SHELVES SHELVES BEFORE AFTER SELLING SPACE SELLING SPACE
Slide 27: Kopeyka Store Personnel Training
Kopeyka Store Personnel Training 27 Training Staff trained • All former Kopeyka employees completed X5‟s Branch centres as of 30.09.2011 training courses Volgo-Vyatsky 2 349 • Trainings for basic staff took place in the stores Centralno- Chernozemny 2 292 and lasted for 5 days with following probati
Slide 28: Agenda - Appendices
Agenda 28 I. Introduction II. Q3 2011 Operational Results & Q2 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision IV. Kopeyka Integration Update Appendices
Slide 29: X5 Share Capital Structure
X5 Share Capital Structure 29 0.11% 32.16% Alfa Group Founders of Pyaterochka X5 Management and/or 0.02% 47.86% Supervisory Board members Free Float 19.85% Treasury Shares Total number of shares – 67,893,218 Equivalent of 271,572,872 GDRs
Slide 30: Contact Information
Contact Information 30 IR Department Contact Details Anastasiya Kvon Andrey Napolnov IR Director Deputy IR Director X5 Retail Group N.V. X5 Retail Group N.V. 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr. Kalitnikovskaya, Moscow, Russia Moscow, Russia Tel.: +7 (495) 792 3511 Tel.: +7 (495) 662 8
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