X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Merger or Acquisition (April 2008)
17 slides from X5 Corporate Center's merger presentation, Apr 11, 2008
Slide 1: X5 + Karusel: Transforming the Russian Food Retail Landscape
X5 + Karusel Transforming the Russian Food Retail Landscape 11 April 2008
Slide 2: Compelling Investment Proposition
Compelling Investment Proposition Significant Step-Up in Scale of X5’s Business Immediate Position as a Leading Hypermarket Operator Excellent Geographic Fit Acquisition of High Quality Assets Financially Compelling Acquisition 2
Slide 3: Transaction Highlights
Transaction Highlights Transaction Acquisition of 100% of shares in Formata Holding BV, owner of the Structure Karusel Hypermarket chain Value determined by formula in the Option Agreement(1) Transaction Value Equity value: USD 920 - 970 million Includes estimated value of Karusel land and r
Slide 4: Karusel Overview
Karusel Overview Business Highlights # 4 Hypermarket Operator in Russia #4 hypermarket operator in Russia both by sales and net selling area as at 31 December 2007 4,600 Net Sales, USDm Strong presence in key markets − 23 stores located in St. Petersburg & North West region, 3,200 Net Selling Ar
Slide 5: Significant Step-Up in Scale of Business
Significant Step-Up in Scale of Business EOP 2007 Net Selling Area 2007 Share in Top-10 Retailers+Karusel(2) 724 (1) 23.8% ‘000 sq.m. 652 20.6% 609 17.8% 14.2% 351 12.4% 272 224 177 6.6% 5.8% 151 147 132 115 (1) 5.5% 5.4% 4.5% 100 3.9% 3.2% 7th Continent 7th Continent Auchan Auchan Dixy X5 + Karusel
Slide 6: Vaulting into a Leading Position in Hypermarkets
Vaulting into a Leading Position in Hypermarkets Evolution of Russian Modern Food Retail(1) Russian Hypermarket Operators Store Count 2004 2007 [2] 18.2% 43.8% 27.5% 39 37 (2) 26 22 (2) 17 15 12 10 Metro X5 + Lenta Karusel Auchan X5 O'Key Mosmart Karusel Russian Hypermarket Operators Sales(3) 37.4%
Slide 7: Excellent Geographic Fit
Excellent Geographic Fit Moscow region – St. Petersburg & North West region – 15 stores in operation 4 stores and 1 store under construction St. Petersburg Yaroslavl – 1 store under construction Yaros Nizhny Novgorod & Dzerzhinsk – 2 stores lavl MOSCOW Izhevsk – N.Novgorod 1 store Regions of X5 oper
Slide 8: Significant Synergy Benefits
Significant Synergy Benefits Synergies Sources Improvement in sales per sq.m of existing Karusel stores through Sales − Rebranding − Improvement in assortment − Layout improvement − More competitive pricing & active promotions Enhancement of X5-Karusel combined purchasing power & better Gross pu
Slide 9: Mercado Hypermarket Concept
Mercado Hypermarket Concept Layouts, Racking Communication Assortment Strategy Pricing & Promotions & Equipment Improved Non-Food Mercado Supercentre Focus on Fresh Great prices & strong display brand − Wider choice promotions Increased Dry Food Strong price − Better availability − Image
Slide 10: Integration Plan
Integration Plan Rebranding, change in layout, improvement of Sales assortment and introduction of X5’s pricing policy End of 2008 Purchasing Centralisation of purchasing function (X5 & Karusel) End of 2008 Logistics/Supply Integration of Karusel stores into X5’s logistics End of 2008 IT Replacement
Slide 11: Improving Performance
Improving Performance 2007 2008 2009 ▲Full year contribution of stores opened in ▲Opening of two new stores currently 2007 under construction ▲One new store opened in March ▲Like-for-Like normalizing at Mercado Net Sales level 831 ▲Early benefits of Mercado re-branding (USD m) ▲Competitive pricing t
Slide 12: Key Milestones to Complete the Acquisition
Key Milestones to Complete the Acquisition X5’s Supervisory Board has approved the transaction on the 10th April 2008, subject to satisfactory completion of the due diligence (at X5 Retail Group’s discretion), and FAS antimonopoly approval − X5 expects FAS Antimonopoly approval in April 2008, whic
Slide 13: Closing Remarks
Closing Remarks The Acquisition of Karusel Offers a Compelling Investment Proposition: Significant Step-Up in Scale of Unrivalled #1 Position in Russian Food Retail - Increased Lead over X5’s Business Closest Competitor Immediate Position as a Leading Position in the Fastest Growing Food Retail
Slide 14: Appendices
DXSRETALGAOLP = ~~ ee =P EKPECTOK ‘Bi Miamepora Mepkado CYNEPUEHTP : 14
Slide 15: Formata Call Option Formula
Formata Call Option Formula The amount payable by X5 Retail Group for the exercise of the Option (the Option Price) is the aggregate of: • (a) the lesser of: − (i) 1.1 multiplied by consolidated net sales of Formata; or − (ii) 14.5 multiplied by the greater of i. EBITDA; or ii. 5% of consolidated ne
Slide 16: Karusel Summary 2007 Audited Financials
Karusel Summary 2007 Audited Financials Income Statement Balance Sheet Cash Flow Statement FY2006 FY2007 % Growth FY2006 FY2007 Change FY2006 FY2007 Change Non-current Assets Beginning Cash 20.3 29.0 +8.7 Revenue Net of VAT 360.6 831.1 130.5% Property plant 377.5 509.3 +131.8 Operating Activities an
Slide 17: 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