X5 Corporate Center · RUS:X5

X5 Corporate Center — X5 Retail Group — Q3 2020 Earnings Presentation

36 slides from X5 Corporate Center's earnings presentation, 2020

  1. Slide 1: Q3 2020 Financial Results

    | Results >X5 RETAIL GROUP inancia Q3 2020 F

  2. Slide 2: Disclaimer

    DISCLAIMER T his presentation does not constitute or form part of and should not be construed as an advertisement of securities, an offer or This presentation includes statements that are, or may be deemed to be, “forward- looking statements”, with respect to the financial The information and opinio

  3. Slide 3: I. Highlights

    I. HIGHLIGHTS

  4. Slide 4: Strategic Highlights

    STRATEGIC HIGHLIGHTS  Market leader in Russian food retail, 11.5% market share in 2019  Strategy is aimed at maintaining leadership  X5 is a multi-format retailer with focus on two largest segments of the Russian food retail - proximity and supermarkets  Balanced approach to expansion  Fast gro

  5. Slide 5: Key Achievements in Q3 2020

    KEY ACHIEVEMENTS IN Q3 2020  Revenue growth at 15.3%  +9.6% YoY selling space in Q3 2020 growth in Q3 2020 (327 net new stores, 169.5 th. sq.m added)  EBITDA margin 8.0% in Q3  In September 2019 2020 Pyaterochka launched first store in new CVP  Net debt / EBITDA at 1.53x  44.5 mln active loyal

  6. Slide 6: Operational Highlights

    OPERATIONAL HIGHLIGHTS Net retail sales dynamics, RUB bn LFL sales, % y-o-y growth CAGR 2015-2019: 21.1% CAGR 2017-2019: 15.9% 13.3% 13,7% 1 728 1 525 1 287 7,7% 1 026 804 5,4% 4,0% 1,5% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Selling space, th. sq. m Number of stores, end of period CAGR 2

  7. Slide 7: Financial Highlights

    FINANCIAL HIGHLIGHTS Revenue dynamics, RUB bn Gross profit & gross margin CAGR 2015-2019: 21.0% CAGR 2015-2019: 21.0% CAGR 2017-2019: 15.7% CAGR 2017-2019: 17.4% 13.2% 24,5% 24,2% 23,9% 24,1% 24,6% 1 734 15.2% 1 533 1 295 426 1 034 370 809 309 198 250 2015 2016 2017 2018 2019 2015 2016 2017 2018 201

  8. Slide 8: Quality of New Openings

    QUALITY OF NEW OPENINGS Cash return on new store opened >30% +1.9 p.p. y-o-y Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Note: Opened 12-36 months ago Share of stores in ‘clinic’ 17 352 17 025 16 658 16 297 15 752 6,3% 5,8% 5,3% 4,1% 6,4% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Number of stores, eop Sha

  9. Slide 9: Sales Density Stabilisation, Impact of Regional Mix

    SALES DENSITY STABILISATION IMPACT OF REGIONAL MIX Unit: ‘000 RUB/m2 (annualised) Overall 260 258 256 255 253 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Moscow & St Petersburg Rest of Russia Moscow region & Leningrad region 376 353 375 211 374 347 371 370 342 207 333 204 330 203 202 Q3 Q4 Q1 Q2 Q3 Q3 Q

  10. Slide 10: II. Market Overview

    II. MARKET OVERVIEW

  11. Slide 11: Macro Environment (1/2)

    MACRO ENVIRONMENT (1/2) The main factor of the decline in real food The decrease in real disposable income in retail trade in 9M 2020 was the self-isolation 9M 2020 was due to the transition to part- regime amid the spread of COVID-19, as well time employment and the placement of as the seasonal fac

  12. Slide 12: Macro Environment (2/2)

    MACRO ENVIRONMENT (2/2) Consumer sentiment deteriorated in Q2 The main factor behind the decline in 2020 driven by the situation with COVID-19 industrial production was the reduction in and slightly improved in Q3 due to the domestic and foreign demand, which began easing of pandemic related restric

  13. Slide 13: X5 vs. Russian Food Retail in Top-Line Growth

    X5 VS. RUSSIAN FOOD RETAIL IN TOP-LINE GROWTH 33% 28% 28% 30% 25% 23% 21% 21% 20% 19% 18% 18% 15% 14% 13% 12% 11% 11% 9% 10% 10% 9% 8% 7% 9% 5% 8% 4% 2% 1% 2011 2012 2013 2014 2015 2016 2017 2018 2019 9M 2020 X5 y-o-y revenue growth Top-10 Market Source: Infoline, X5 analysis Starting from 2015, X5

  14. Slide 14: Russian Retail Market Snapshot

    RUSSIAN RETAIL MARKET SNAPSHOT Top 10 Russian food retailers % market share % market share # Company name 2018 2019 1 Х5 10.7% 11.5% 2 Magnit 7.7% 7.6% 3 DKBR 5.1% 5.7% 4 Lenta 2.8% 2.5% 5 Auchan 1.9% 1.5% 6 Metro 1.3% 1.1% 7 O’key 1.1% 1.0% 8 Monetka 0.6% 0.7% 9 Svetofor 0.6% 0.7% 10 Globus 0.6% 0.

  15. Slide 15: III. Operational Results Q3 2020

    III. OPERATIONAL RESULTS Q3 2020

  16. Slide 16: X5 Operational Summary

    X5 OPERATIONAL SUMMARY Net retail sales Traffic, mln customers Net selling space (eop) 1 359 1 401 13,9% 12,0% 11,0% 10,7% 1 315 1 327 9,6% 15,9% 15,4% 1 205 13,4% 13,2% 11,0% 7 239 7 327 7 510 7 680 7 009 467 468 493 486 421 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3

  17. Slide 17: Q3 2020 Results: X5 Net Retail Sales Summary

    Q3 2020 RESULTS: X5 NET RETAIL SALES SUMMARY Net retail sales breakdown by retail format, RUB mln Hypermarkets Hypermarkets 20 116 11 207 74 568 62 818 Supermarkets Supermarkets +15.4% 420,712 485,552 399 776 337 778 Proximity stores Proximity stores Q3 2019 Q3 2020 KEY DRIVERS  Pyaterochka, which

  18. Slide 18: Q3 2020 Results: Expansion Summary

    Q3 2020 RESULTS: EXPANSION SUMMARY Net selling space, th. sq. m Net selling space added in 9.6% Q3 2020, th. sq. m  Total store base increased to 17,352 stores as of 7 680 30 September 2020 7 009 Hypermarkets  Pyaterochka was the main driver (22) for the store base increase with a 125 th. sq. m se

  19. Slide 19: X5 Regional Presence

    X5 REGIONAL PRESENSE X5 today  Multi-format presence in seven Federal Districts  Total stores – 17,352, including: ― 16,385 Pyaterochka stores ― 910 Perekrestok supermarkets ― 57 Karusel hypermarkets North North Format Unit Southern Central Volga Ural Siberian Total Caucasus Western 310 1,582 6,08

  20. Slide 20: X5 Distribution Capabilities

    X5 DISTRIBUTION CAPABILITIES Warehouse space as of 30 September 2020 Space, Federal district # of DCs th. sq. m Central 616 17 6 North-Western 150 6 Volga 230 9 17 Ural 144 6 9 6 Southern 114 4 4 Siberian 26 1 1 Total 1,280 43 Centralisation levels Highlights for Q3 2020  X5 continued the implement

  21. Slide 21: IV. Financial Results Q3 2020

    IV. FINANCIAL RESULTS Q3 2020

  22. Slide 22: X5 Quarterly Financial Highlights

    X5 QUARTERLY FINANCIAL HIGHLIGHTS Revenue Gross profit & gross margin SG&A (excl. D&A&I&LTI)[1] 25.5% 25,3% 25,1% 18,2% 17,9% 18,1% 17,9% 17,5% 15,6% 15,3% 24,5% 24,3% 12,4% 12,9% 86,4 87,3 10,9% 23,9% 83,9 84,7 13.3% 76,8 124,7 122,2 124,0 469,2 469,0 493,6 486,6 112,2 114,2 64,8 423,0 103,5 Q3 201

  23. Slide 23: X5 Capital Expenditures

    X5 CAPITAL EXPENDITURES Capex breakdown, Q3 2020 Capex dynamics by quarter, RUB mln 25 889 21 006 21 785 22 570 17 542 12% New store openings Refurbishments 11% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 RUB Logistics IT 23 bn 50% Expected change in Capex structure 8% Maintenance 7.4% y-o-y Other 3% 4%

  24. Slide 24: X5 Debt Structure

    X5 DEBT STRUCTURE Debt profile Debt portfolio maturity 100% 15% RUB mln 30 Sep 2020 30 Sep 2019 18% Total Debt 228,291 226,586 36% Short-Term Debt 75,520 72,868 % of total debt 33.1% 32.2% 31% Long-Term Debt 152,771 153,718 % of total debt 66.9% 67.8% Net Debt 216,619 215,719 30 Sep 2020 2020 2021 2

  25. Slide 25: Q3 2020: Adjusted SG&A Expenses Analysis

    Q3 2020: ADJUSTED SG&A [1] EXPENSES ANALYSIS Q3 2020 analysis as percentage of revenue 18,2% (28) b.p. 17,9% 0,7% 8 b.p. 0,8% 1,2% (2) b.p. 1,1% 1,1% 2 b.p. 1,1% 2,0% (3) b.p. 2,0% 13,3% Third party services 0,8% 0,9% Other expenses 1,1% 5,1% (17) b.p. 5,0% Other store costs 2,0% 0,6% Utilities Leas

  26. Slide 26: Financial Statements (1/3): Profit and Loss Statement

    FINANCIAL STATEMENTS (1/3) PROFIT AND LOSS STATEMENT IAS 17 IFRS 16 RUB mln Q3 2020 Q3 2019 +/( - ) +/ ( - ), % Q3 2020 Revenue 486,641 421,955 64,686 15.3% 486,641 Net retail sales 485,552 420,712 64,841 15.4% 485,552 COGS (364,415) (318,462) (45,953) 14.4% (362,630) Gross profit 122,226 103,493 18

  27. Slide 27: Financial Statements (2/3): Balance Sheet (IFRS 16)

    FINANCIAL STATEMENTS (2/3) BALANCE SHEET (IFRS 16) RUB mln 30 Sep 2020 30 Sep 2019 Total current assets 171,545 148,592 Cash & cash equivalents 11,672 10,867 Inventories 128,683 107,270 Total non-current assets 942,860 866,857 Right-of-use assets 462,607 410,323 Net PP&E 319,549 309,848 Goodwill 104

  28. Slide 28: Financial Statements (3/3): Cash Flow Statement

    FINANCIAL STATEMENTS (3/3) CASH FLOW STATEMENT (IAS 17 AND IFRS 16) IAS 17 IFRS 16 RUB mln Q3 2020 Q3 2019 +/( - ) +/ ( - ), % Q3 2020 Net cash generated from 24,547 2,437 22,110 907.3% 39,565 operating activities Net cash from operating activities before 38,104 29,403 8,701 29.6% 62,250 changes in

  29. Slide 29: Appendix: Performance Summary of Key Formats

    APPENDIX PERFORMANCE SUMMARY OF KEY FORMATS

  30. Slide 30: Pyaterochka Summary (1/3)

    PYATEROCHKA SUMMARY (1/3) RUSSIA’S #1 PROXIMITY NETWORK BY REVENUE 16,385 stores as of 6,415 th. sq. m of selling space 30 September 2020, as of 30 September 2020, 10.3% increase y-o-y 10.8% increase y-o-y Q3 2020 net retail sales – 1,242 mln of customer visits in RUB 399.8 bn, Q3 2020, 8.7% increas

  31. Slide 31: Pyaterochka Proximity Stores Summary (2/3)

    PYATEROCHKA PROXIMITY STORES SUMMARY (2/3) Q3 2020 net retail sales: Q3 2020 selling space: Q3 2020 sales densities: 18.4% increase y-o-y 10.8% increase y-o-y 2.8% increase y-o-y Net sales growth (% y-o-y) Net selling space growth (% y-o-y) Net sales densities (th. RUB/sq. m[1]) 29,7% 254 252 21,6%

  32. Slide 32: Pyaterochka Format Strategy Highlights

    PYATEROCHKA PROXIMITY STORES SUMMARY (3/3) FORMAT STRATEGY HIGHLIGHTS  Increase number of loyal customers and maximise share of their wallet: − New CVP and further adaptation of assortment − Leadership in NPS and service level − Better personnel turnover and engagement − Focus on operational effici

  33. Slide 33: Perekrestok Supermarkets Summary (1/4)

    PEREKRESTOK SUPERMARKETS SUMMARY (1/4) RUSSIA’S #1 SUPERMARKET 910 stores as of 1,039 th. sq. m. of selling 30 September 2020, space as of 30 September 2020, 12.2% increase y-o-y 21.8% increase y-o-y Q3 2020 net retail sales of 145 mln customers in Q3 2020, RUB 74.6 bn, 0.5% increase y-o-y 18.7% inc

  34. Slide 34: Perekrestok Supermarkets Summary (2/4)

    PEREKRESTOK SUPERMARKETS SUMMARY (2/4) Q3 2020 net retail sales: Q3 2020 selling space: Q3 2020 sales densities: 18.7% increase y-o-y 21.8% increase y-o-y 0.1% increase y-o-y Net sales growth (% y-o-y) Net selling space growth (% y-o-y) Net sales densities (th. RUB/sq. m[1]) 25,5% 337 329 329 330 33

  35. Slide 35: Perekrestok Summary (3/4): Format Strategy Highlights

    PEREKRESTOK SUMMARY (3/4) FORMAT STRATEGY HIGHLIGHTS  Value proposition and adapting to customer needs: − Further adaptation of assortment with focus on fresh, F&V, ready-to-eat − Omni-channel development − Targeted loyalty system and personalised promo − Best-in-class service, further increase of

  36. Slide 36: Perekrestok Summary (4/4): Online

    PEREKRESTOK SUMMARY (4/4): ONLINE: ON TRACK TO BECOMING #1 IN RUSSIAN E-GROCERY Net sales, RUB mln Average customer spending per 3 592 month, RUB ths 2 836 11,6 2 096 1 630 6,7 x1.6 6,0 891 867 922 636 124 174 204 276 5,6 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Before Online launch After Online launch 2

X5 Retail Group — Q3 2020 Earnings Presentation on 6ix