X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Non-Deal Roadshow (April 2009)
26 slides from X5 Corporate Center's roadshow presentation, April 2009
Slide 1: Winning Customers With The Power Of 5
X5 Winning Customers With The Power Of 5 Roadshow Presentation 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. 2008 – Strong Growth Ahead of Expectations • Unrivalled Leadership in Russian Retail • Best-in-Industry Operational Performance • Financial Review & Liquidity Update II. 2009 & Beyond – Source of Strength in Russian Retail • 2009 Priorities Support X5’s Long-Term Leadership & Growth • Winn
Slide 4: Unrivalled Leadership in Russian Retail
Unrivalled Leadership in Russian Retail • 2008 pro-forma(1) net sales - USD 8,892 mln # Company FY 2008 % in % in Total Net Retail Top-10 Market (4) • 1,144 company-managed store in Russia and Sales Ukraine(2) (USD mln) • 586 stores operated by X5’s franchisees across 1. X5(1) 8,844 26.1% 4.0% Russi
Slide 5: Unrivalled Leadership in Russian Retail: Multi-Format Operations
Unrivalled Leadership in Russian Retail Multi-Format Operations Soft Discount Q1’09 Retail Sales Break Down by Format Stores 19% As at 31 Mar 2009 Hypermarkets • 886 stores Soft • Total net selling space – 435,859 sq. m. Discounters • Sales per sq.m. – USD 14,328 (1) 52% Supermarkets 29% Supermarket
Slide 6: Best-in-Industry Operational Performance
Best-in-Industry 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 FY 2008 Highlights #1 4% Market Position Market Share 1,101 874,032 sq.m. Number of Stores Selling Space 816,273,268 USD 10 billion Custo
Slide 7: Driven by Strong LFL Sales Growth
Best-in-Industry Operational Performance … Driven by Strong 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% affected by
Slide 8: Supported by Organic Expansion & Karusel Acquisition
Best-in-Industry 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 organicall
Slide 9: Thanks to Strong Regional Positions
Best-in-Industry Operational Performance …Thanks to Strong 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 10: 2008 Financial Review
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 Gro
Slide 11: 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 2
Slide 12: 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 13: 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 14: 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 15: Agenda
Agenda I. 2008 – Strong Growth Ahead of Expectations • Unrivalled Leadership in Russian Retail • Best-in-Industry Operational Performance • Financial Review & Liquidity Update II. 2009 & Beyond – Source of Strength in Russian Retail • 2009 Priorities Support X5’s Long-Term Leadership & Growth • Winn
Slide 16: 2009 Priorities Support X5's Long-Term Leadership & Growth
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 17: Winning Customers with the Power of 5
Winning Customers with the Power of 5 Multi-Format Price Leadership Stores X5 Winning Customers With The Power of 5! Supply Chain Focus on Assortment, Management Fresh & Private Label Purchasing Power p. 17
Slide 18: Power of 5 - Pyaterochka
Power of 5 - Pyaterochka X5’s Soft Discounters – Positioned for Trading-Down Trends Value Proposition Strengths • High brand recognition • Price leadership • 100% of assortment at lowest price on the market • Convenient location • Low cost operations • Cheap & quick expansion potential • Attractive
Slide 19: Power of 5 - Perekrestok
Power of 5 - Perekrestok X5’s Supermarkets – Best Value for Money Value Proposition Strengths • High brand recognition • Quality & Convenience • 76% of sales come from Moscow & St. Petersburg • Efficient promotions, strong customer response • The best supermarket in fresh • Strong loyalty program •
Slide 20: Power of 5 - Karusel
Power of 5 - Karusel X5’s Hypermarkets – Better Alternative to Open-Air Markets Value Proposition Strengths • Everything under one roof • Premium locations • Two formats – compact & full-size • Low price • Basic assortment at lowest price available in the market • Ideal place for family shopping • S
Slide 21: 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 22: Q1 LFL Results
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 23: Selling Space Expansion in Q1 2009
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 24: 2009 – Break-Through Year in Logistics Infrastructure Development
2009 – Break-Through Year… … in Logistics 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 v
Slide 25: 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
Slide 26: Long-Term View
Long-Term View We Should Not Forget that… • Russian retail market remains very fragmented and immature… • …offering unique opportunities to strongest players… • …on the back of… – long-term potential for income and spending growth… –…organic expansion… –…and market consolidation p. 26