GDR OKEY Group ORD · RUS:OKEY
GDR OKEY Group ORD — O'KEY Group — Investor Presentation (June 2011)
29 slides from GDR OKEY Group ORD's investor presentation, June 2011
Slide 1: O'KEY Group S.A. Q2'11 Operating results
June 2011 O’KEY Group S.A. Q2’11 Operating results
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The materials contained in this presentation (“Presentation”) have been prepared solely for the use in this Presentation and have not been i
Slide 3: Company overview
Company overview Core hypermarket format with supplementary Overview supermarkets (as of June 30, 2011) A leading Russian food retailer in the hypermarket segment in Hypermarkets Supermarkets terms of revenue in 2010(1) Number of stores 36 23 One of the leading food retailers in St. Petersburg w
Slide 4: Q2 and 1H 2011 Operating results
Q2 and 1H 2011 Operating results Retail Revenue LFL Revenue (RUB terms) LFL Traffic LFL Check LFL Revenue 2010 2011 42 378 7,2% 37 793 6,1% 5,6% RUB (bln.) 5,2% 4,8% 22 054 19 580 2,3% 1,0% 2Q 1H 1Q '11 2Q '11 1H '11 -0,8% -2,8% SOURCE: Audited IFRS financial statements for 2007-2010, Management acc
Slide 5: Store formats and their core characteristics
Store formats and their core characteristics Typical hypermarket location Typical supermarket location Key statistics (as of June 30, 2011) Key statistics (as of June 30, 2011) Number of stores: 36 Av. selling space: 7,341 sq.m. Number of stores: 23 Av. selling space: 1,249 sq.m. Constant
Slide 6: Distinctive concept emphasizing a pleasant and convenient shopping experience
Distinctive concept emphasizing a pleasant and convenient shopping experience Modern, well positioned and designed stores … Convenient locations with large parking areas and selling space Appealing interior design with good lighting, convenient shelf layout and no “warehouse” feel Family frien
Slide 7: Strong customer proposition with focus on fresh & delicatessen and non-food
Strong customer proposition with a particular focus on fresh & delicatessen and non-food products Wide product range … … with a focus on fresh & … as well as a high share delicatessen products … of non-food goods Up to 64,000 SKUs of food and non- food products at affordable prices Product matri
Slide 8: All customer needs addressed and better products offered at affordable prices
All customer needs are addressed and better products are offered at affordable prices … Pricing model allowing for significant Comments competitive advantages Products at affordable prices in three main segments: Basic Price Market Market Average entry highest Average + price price Prices
Slide 9: Customer loyalty and high brand equity
…which translates into our customers’ loyalty and high brand equity Higher than average basket (hypermarkets) … … and LFL traffic growth (RUB terms, 2010) … 819 (Average ticket, 620 RUB, 2010) 527 513 O'KEY Karusel Magnit Megamart hypermarkets SOURCE: Companies data SOURCE: For O’KEY: Management acc
Slide 10: We already have a large geographical presence
We already have a large geographical presence … Geographical coverage Historical store roll-out Urals 59 60 57 1 1 4 Siberia 3 Murmansk 50 46 - 2 HM South 3 14 14 40 37 St. Petersburg(1) Centre 1 9 7 7 - 16 SM 30 7 5 - 15 HM North-West 24 2 20 4 1 33 12 27 29 32 Moscow(2) 10 1 19 3 4 5 11 - 2 HM - 1
Slide 11: … and an efficient supply chain …
… and an efficient supply chain … “Smart” supply chain Delivery chain Local suppliers Suppliers Direct delivery Stores 2Q 2010 1% data 1% (costs O’KEY split) 53% 46% Logistics Delivery Delivery 53% 46% Cross-docking by trucks to stores Dispatching Federal suppliers Local suppliers Federal Fede
Slide 12: … supported by innovative IT platform …
… supported by innovative IT platform … Key elements of IT system Covered business segments Logistics & purchasing Assortment planning IBS Suite (implementation stage) Price management Retail analysis Start of implementation – August 2009 Accounting IT Platform Microsoft Dynamics AX Inve
Slide 13: Most efficient operations among Russian public food retailers
… which is why we have the most efficient operations among Russian public food retailers LFL sales growth (RUB terms, 2010) Revenue per sq.m.(1) (2010) (2) SOURCE: For O’KEY: Management accounts, For other companies: Companies’ data SOURCE: Companies’ data SG&A as % of revenue (2010) EBITDA per sq.m
Slide 14: Competitive strengths and strategy to realize our full potential
Our competitive strengths make us confident that our strategy will allow us to realize our full potential Strategic goals Key plans and targeted results By 2015, establish presence in more than 25 cities across Russia Further penetrate the large and high-potential Moscow market Continue regional
Slide 15: Key financials snapshot
Key financials snapshot RUB millions 2007 2008 2009 2010 P&L Revenue 30,533 51,143 67,875 82 667 YoY growth 82.8% 67.5% 32.7% 21,8% Gross profit 6,468 10,761 14,768 17 924 Gross margin 21.2% 21.0% 21.8% 21,7% EBITDA 2,201 4,549 5,896 7,127 EBITDA margin 7.2% 8.9% 8.7% 8,6% BALANCE SHEET Total assets
Slide 16: EBITDA margin evolution
EBITDA margin evolution EBITDA margin bridge 2008-2010 (1) Increase in (1) (1) Increase in the average purchasing number of power and in employees store density per m2 of Increase in Optimization in certain selling space share of of head- areas rented count in stores existing stores SOURCE: Company’
Slide 17: Investing in future growth and cash management efficiency
We actively invest in our future growth and increase efficiency of our cash management Total CAPEX dynamics(1) Trade Operating Cash Cycle(3) (Cash Flow data) 6 000 80 60 55 42 39 37 5 000 40 4 711 4 842 (Days) 20 4 000 0 (RUB mln.) 3 403 (20) 3 224 (20) 3 000 (40) (26) (29) (29) (60) (65) (57) (72)
Slide 18: Financial standing despite aggressive roll-out
Despite the aggressive roll-out, we pay special attention to our financial standing Net debt(1) Net debt / EBITDA 14 004 6x 15 000 13 420 5,1x 11 222 (RUB mln.) 10 000 4x 3,0x 5 864 2,4x 5 000 2x 0,8x 0 0x 2007 2008 2009 2010 2007 2008 2009 2010 Debt portfolio structure Debt portfolio structure by m
Slide 19: O'Key Group – a unique opportunity in the Russian food retail sector
O’Key Group – a unique opportunity in the Russian food retail sector Highlights Comments One of the leading Russian food # 3 Russian (excl. multinationals) food retailer in terms of revenue in 2010(1) retailers with Historical focus on hypermarkets, one of the most attractive food retail segment
Slide 20: Appendix
SONeY TT APPENDIX 20
Slide 21: Russia is one of the world's most attractive food retail markets
Russia is one of the world’s most attractive food retail markets Russia is one of the largest … with one of the lowest rates food retail markets in Europe … of penetration by modern retail … 300 272 100% Average 87% 88% 80% 80% 83% 221 80% 74% (2) 71% 72% 73% 73% 78% (US$bln.) 197 200 159 57% 143 12
Slide 22: Strong expertise in hypermarkets, format with appealing growth prospects
O’Key has strong expertise in hypermarkets, format with appealing growth prospects Distinctive expertise in hypermarkets Focused on one core format – hypermarkets Supermarkets (O’Key Express brand) – a satellite format, providing a better fit for specific locations (i.e. residential areas) Str
Slide 23: Historical performance: growth and increased sales efficiency
Our historical performance demonstrates our ability to deliver growth and increase sales efficiency Retail Revenue LFL Revenue (RUB terms) 9,6% 7,2% 7,5% 6,6% 4,9% 4Q '09 1Q '10 2Q '10 3Q '10 4Q '10 SOURCE: Audited IFRS financial statements for 2007-2010 SOURCE: Management accounts Retail revenue ex
Slide 24: 10 years of successful growth
10 years of successful growth Selling space dynamics 300 287 293 250 Supermarkets 25% 233 27 29 Selling space CAGR '07-'10 ths. sq.m. Hypermarkets 190 21 200 146 15 150 6 260 264 100 87 212 3 175 140 50 17 28 36 85 6 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q2 2011 SOURCE: Company, audited IFR
Slide 25: Transparent legal structure
Transparent legal structure Caraden Ltd Brookvalley Ltd Barleypark Ltd Free Float (Isle of Man) (Isle of Man) (Isle of Man) 14,4678% 22,2460% 56,0094% 7,2768% O’KEY GROUP SA (Luxembourg) 99% 99% 99% 99% O’KEY – 100% O’KEY Group Dorinda Mir Torgovli O’KEY LLC Logistics LLC LLC JSC CJSC Importing an
Slide 26: Corporate governance
Corporate governance Dividend policy and Corporate governance levels management incentive program Responsible for setting strategic goals for the Company Dividends at the target ratio of 25% of Board of Directors consists of 5 members including: Board of Group’s net profit for the relevant per
Slide 27: Experienced top-management team (I)
Experienced top-management team combining best-in- practice international and local expertise (I) Patrick Longuet Sebastien Verhaeghe Dmitry Pryanikov Vladislav Kurbatov CEO Executive Director Financial Director Operations Director One of Supervises Director of the Joined the Europe’s most finance,
Slide 28: Experienced top-management team (II)
Experienced top-management team combining best-in- practice international and local expertise (II) Georges Kowalkowski Maksim Schegolev Eric Richard Vadim Korsynskiy Marketing & Sales Expansion Director Construction Director Commercial Director Development Director Responsible Responsible Responsibl
Slide 29: Established private label operations
Established private label operations serve as a tool to address customer needs and pricing expectations Ultra fresh food products FMCG products Non-food products In store made products including O’KEY labeled food and non-food products Other O’KEY private label brands in fresh bakery and delic