X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — FY2008 Earnings Presentation
21 slides from X5 Corporate Center's earnings presentation, Apr 14, 2009
Slide 1: Winning Customers With The Power Of 5
X5 Winning Customers With The Power Of 5 FY 2008 Operational & Financial Results Q1 2009 Operational Performance Conference Call Presentation to Investors and Analysts Moscow, 14 April 2009 p. 1
Slide 2: Disclaimer
Disclaimer 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 or
Slide 3: Agenda
Agenda I. FY 2008 Operational Results II. Q1 2009 Operational Performance III. Q4&FY 2008 Financial Performance & Liquidity Update IV. 2009 Priorities & Outlook p. 3
Slide 4: Strong 2008 Operational Performance
Strong 2008 Operational Performance Growth on 2007 57% in USD 45% in USD 53% in RUR 41% in RUR Consolidated(1) Net Retail Sales Pro-Forma(2) Net Retail Sales Highlights #1 4% Market Position Market Share 1,101 874,032 sq.m. Number of Stores Selling Space 816,273,268 USD 10 billion Customer Visits Pr
Slide 5: Strong 2008 Operational Performance: Industry-Beating LFL Sales Growth
Strong 2008 Operational Performance … … Driven by Industry-Beating LFL Sales Growth… • Strong traffic and basket growth in excess of 2008 LFL Performance by Format inflation Based on RUR- denominated gross sales Traffic Basket • Acquired Karusel hypermarkets’ performance + 23% + 23% + 22% + 19% affe
Slide 6: Supported by Organic Expansion & Karusel Acquisition
Strong 2008 Operational Performance… … Supported by Organic Expansion & Karusel Acquisition • In 2008 X5 added a net 233 stores, Soft Discounters Store Count & Sales including: Net Retail Sales, USD mln – 24 acquired Karusel hypermarkets # of Stores + 51% 4 464 – 7 hypermarkets opened organically 2
Slide 7: Thanks to Enhanced Regional Positions
Strong 2008 Operational Performance… …Thanks to Enhanced Regional Positions North-West region Moscow & the region 28% Hypermarkets 10% Hypermarkets • In 2008, 11 new cities/regions entered in 49% Discounters 64% Discounters European Russia and the Urals 8% Supermarkets 41% Supermarkets FY’08 Sales –
Slide 8: Agenda
Agenda I. FY 2008 Operational Results II. Q1 2009 Operational Performance III. Q4&FY 2008 Financial Performance & Liquidity Update IV. 2009 Priorities & Outlook p. 8
Slide 9: Q1 2009 Operational Performance
Q1 2009 Operational Performance … Demonstrates the Resilience of X5’s Multi-Format Approach Net Retail Sales, consolidation (1) Net Retail Sales, consolidation (1) RUR mln 63 089 USD mln 1 775 1 859 43 066 + 46% + 5% Q1 2008 Q1 2009 Q1 2008 Q1 2009 Net Retail Sales, pro-forma (2) Net Retail Sales, p
Slide 10: Q1 LFL Results Varied from Region to Region & Format to Format
Q1 LFL Results… … Varied from Region to Region & Format to Format • Soft Discounters - clear winners in the trading Q1 LFL Performance by Format Based on RUR- down conditions: denominated gross sales Traffic Basket – 10% traffic inflow in Moscow + 17% – 11% traffic inflow in the regions + 13% + 8% +
Slide 11: Selling Space Expansion in Q1 2009 Was Focused and Selective
Selling Space Expansion in Q1 2009… … was Focused and Selective • 33 th.sq. m. or 43 stores added on a net basis: Number Of Stores 1 400 – 38 soft-discounters (including 21 store 1 200 46 49 acquired in Agrotorg-Rostov transaction in 1 000 15 209 207 December 2008) 800 12 179 600 – 2 supermarkets 15
Slide 12: Agenda
Agenda I. FY 2008 Operational Results II. Q1 2009 Operational Performance III. Q4&FY 2008 Financial Performance & Liquidity Update IV. 2009 Priorities & Outlook p. 12
Slide 13: FY 2008 Financial Review
FY 2008 Financial Review Strong Financial Results(1) Net Sales EBITDA & EBITDA Margin EBITDA, USD mln Net Sales, USD mln 9,0% EBITDA Margin, % + 45% 8,9% + 47% 8 892 803 6 152 548 FY 2007 FY 2008 FY 2007 FY 2008 Gross Profit Adjusted Net Profit (2) Gross Profit, USD mln Adjusted Net Profit, USD mln
Slide 14: Q4 & FY 2008 P&L Highlights
Q4 & FY 2008 P&L Highlights % change % change USD mln (1) Q4 2008 Q4 2007 FY 2008 FY 2007 y-o-y y-o-y Net Sales 2,376.3 1,980.2 20% 8,892.4 6,151.5 45% incl. Retail 2,365.1 1,965.3 20% 8,843.8 6,109.6 45% Gross Profit 604.8 527.3 15% 2,278.5 1,610.7 41% Gross Margin, % 25.5% 26.6% 25.6% 26.2% EBITDA
Slide 15: Key P&L Developments
Key P&L Developments • FY 2008 gross margin declined 60 bp year-on-year – in line with X5’s decision to invest in its value propositions and consistently pursue “close-to-the-customer” pricing strategy • SG&A declined as % of revenue (from 21.4% in 2007 to 20.6% in 2008) as a result of tighter cost
Slide 16: FY 2008 Cash Flow Highlights
FY 2008 Cash Flow Highlights Strong Cash Generation from Operations % change USD mln (1) FY 2008 FY 2007 y-o-y Net Cash from Operating Activities 629.3 427.5 47% Net Cash from Operating Activities before Changes in Working Capital 774.3 491.3 58% Change in Working Capital 243.9 139.8 75% Net Interes
Slide 17: Liquidity Update
Liquidity Update Debt Maturity Profile as at 31.12.08 Debt Maturity Profile as at 31.03.09(1) USD mln USD mln Denominated in RUR Denominated in USD Denominated in RUR Denominated in USD 1,428 1,388 578 1,088 1,088 447 200 378 340 53 300 31 Within 1 Year 1-2 Years over 2 Years Within 1 Year 1-2 Years
Slide 18: Agenda
Agenda I. FY 2008 Operational Results II. Q1 2009 Operational Performance III. Q4&FY 2008 Financial Performance & Liquidity Update IV. 2009 Priorities & Outlook p. 18
Slide 19: 2009 Priorities
2009 Priorities… …Support X5’s Long-Term Leadership & Growth • Multi-Format Approach More Value for • Price Leadership Customers • Assortment • Priority given to: • New hypermarkets & supermarkets from existing pipeline or Selective – Soft discounters new projects with extremely attractive economics
Slide 20: 2009 Break-Through Year in Distribution Infrastructure Development
2009 – Break-Through Year… … in Distribution Infrastructure Development Functionality Fruit & Region # of DCs 000 sq. m. Dry Veg Fresh Frozen DC locations as at Central 6 109.1 v v v v 31 March 2009 North-West 4 44.5 v v v v Volgo-Vyatsky 1 15.1 v v v Urals 5 18.2 v v v Centralno-Chernozemny 3 8.4 v
Slide 21: 2009 Sales Growth & CapEx Outlook
2009 Sales Growth & CapEx Outlook 2008 2009E Sales Growth (in RUR) 41% >25% Capital Expenditures ~USD 1,000 Up to RUR 14 bln mln 2009 Approximate CapEx Breakdown Margins: Focus on Customers and Efficiency 18% • Continued gross margin investment in customer 69% value proposition 13% • Cost control re