X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Sberbank CIB The Russian Forum 2013
39 slides from X5 Corporate Center's conference presentation, Apr 16, 2013
Slide 1: X5 Retail Group
1 X5 Retail Group SBERBANK CIB, “The Russian Forum” Crowne Plaza Club Hotel Moscow, Russia 16 – 17 April 2013
Slide 2: Disclaimer
Disclaimer 2 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 o
Slide 3: Agenda
Agenda 3 Topic Pg I Timeline of Key Events 4 II Recent Developments 5 III Strategy, Guidance & Targets 10 IV Company Overview 13 V Russian Retail Market & Macroeconomic Review 23 VI Summary 26 Appendix: Financial & Operational Results 28
Slide 4: Timeline of Key Events
Timeline of Key Events 4 Merger of Pyaterochka & Perekrestok X5 opens 3,000th store Renamed X5 Retail Group N.V. Over 1.6 bln customer visits More than 600 stores under management 577 stores added organically Presence in 21 regions Successful roll out of SAP IT platform Perekrestok
Slide 5: II Recent Developments
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Slide 6: Corporate Governance
Corporate Governance 6 Corporate Governance Supervisory Board Audit Committee (3 members) Independent General Meeting of Shareholders Name Position Directors(1) Nomination and Remuneration Mr. Dmitry Dorofeev Chairman Committee (3 members) Mr. Mikhail Fridman Member Supervisory Board Mr. David Gould
Slide 7: 2013 Trading Results – Sales
2013 Trading Results – Sales 7 Period/Format Net retail sales growth, RUR, y-o-y LFL sales results, y-o-y January Net retail sales Customer visits Average ticket (3) Total LFL Traffic Basket “Soft” discounters 10.8% 10.2% 0.6% 0.3% (2.4%) 2.8% Supermarkets 4.6% 7.0% (2.2%) (1.5%) 0.2% (1.7%) Hyperma
Slide 8: Step-Up in Managed Store Base
Step-Up in Managed Store Base 8 Q1 Regional Breakdown 2008 2009 2010(1) 2011 2012 2013 Moscow & Central 492 598 798 1,438 1,761 1,789 St. Petersburg & North-West 311 356 408 489 562 571 Central and North-West regions 803 954 1,206 1,927 2,323 2,360 Centralno-Chernozemny 35 37 57 167 219 222 Volgo-Vy
Slide 9: Regional Presence
Regional Presence (1) 9 2013 Q1 Regional Store Breakdown Overview St. Petersburg & Moscow & Central region • Multi-format presence in 63 cities of European North-West region Discounters:1,418 Russia, the Urals and Ukraine with population > Discounters:519 Supermarkets:213 Supermarkets:35 Hypermarket
Slide 10: IV Strategy & Guidance
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Slide 11: X5 Strategy
X5 Strategy 11 Multi-Format Customer Positioning Experienced Management Focus on Food Trade Area Expansion Engaged & Motivated Personnel Customer Satisfaction Cost & Shrinkage Availability on Shelf Control Powerful, Technological Advantage
Slide 12: 2013 Guidance & Initiatives
2013 Guidance & Initiatives 12 Objective 2013 Focus on Sales & Margins • Net RUR retail sales growth of at least 11% • Maintain EBITDA margin above 7% Invest in • 11% net increase in retail selling space • CapEx: approximately RUR 30 bln, Growth & Stores • 26% for maintenance & refurbishment • Avail
Slide 13: III Company Overview
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Slide 14: X5 – Leading Russian Retailer
X5 – Leading Russian Retailer 14 Russia’s Leading Food Retailers 1 Evolution of X5 Market Share RUR 9.9 trillion Sales 2012, % in % in total # Company name USD mln2 Top-10 market3 RUR 7.1 trillion 1 X5 15,762 25.3% 5.6% 2 Magnit 14,240 22.8% 5.1% RUR 4.9 trillion 5.6% 3 Auchan 8,383 13.4% 3.0% 4.4%
Slide 15: Best In Class IT Platform
Best In Class IT Platform 15 Yesterday – Merger of Perekrestok & Pyaterochka Today – Largest SAP Rollout in Global Food Retail 2011 2011 2010 2010 In progress: Rollout of JDA software solutions for January 2008: Homemade “IT Spaghetti” supply chain management and SAP ERP auto ordering Optimized IT P
Slide 16: Multi-Format Organization
Multi-Format Organization 16 2007 – 2011: Functional Organizational Structure 2012 & beyond: Customer-Centric Multi-Format Organizational Structure X5 Central Office Customer • Purchasing dept. • Marketing / Pricing Soft Discounter Hypermarket Supermarket • Logistics • IT Format Format Format • Huma
Slide 17: Multi-format - Capturing Wallet Share
Multi-format - Capturing Wallet Share 17 X5 Value Proposition – A Store for Every Lifestyle, Budget & Occasion is Nearby Soft Discounters Net selling space: ~ 350 sq. m. on average Assortment: ~ 3,500 SKUs Value proposition: Convenient and efficient shopping, every day low prices, unique private lab
Slide 18: Internet Retail Channel - E5.ru
Internet Retail Channel - E5.ru 18 E5 Business Model E5 at a Glance Russian E-commerce market highlights • Largest internet audience in Europe (monthly audience ~50 mln) • Simple navigation • Market size in 2012 ~ USD 10 bln • Easy order – minimal clicks • Minimal personal information • Fragmented m
Slide 19: X5 Distribution Capabilities
X5 Distribution Capabilities 19 Distribution center (DC) locations Warehouse Space (1) Space, # of Stores Region # of DCs th sq. m. Serviced(2) Central 303.6 11 1,789 North-West 80.4 5 571 V.-Vyatsky 23.6 2 273 Urals 45.1 5 367 Central Chernozemny 30.7 2 222 Sr.-Volzhsky 49.6 2 222 South 13.6 1 210
Slide 20: Suppliers & Purchasing
Suppliers & Purchasing 20 Overview • Established relations with over ~5,000 leading domestic and international FMCG companies and continue to enhance and develop those relations on the back of the growing business scale • As of 2012, negotiations with suppliers based on customer-driven assortment •
Slide 21: Key Operating Metrics
Key Operating Metrics 21 Traffic, mln Average Basket, RUR, incl. VAT 1,793 1,639 315 315 314 1,218 312 995 816 307 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Net Sales and Gross Profit Dynamics Net Cash from Operations, RUR bln 258.9 262.0 251.5 249.3 27.2 219.7 23.1 18.9 15.6 11.5 64.8 62.9
Slide 22: Share Capital
Share Capital(1) 22 Share Capital Shares and Trading Treasury Shares 0.11% • The Company’s shares are listed on the London Stock Exchange in the form of Global Depositary Free Float Receipts (GDRs) 32.17% Alfa Group • Each GDR represents an interest of 0.25 of one 47.86% ordinary share X5 Directors
Slide 23: V Russian Retail Market & Macroeconomic Review
23 V Russian Retail Market & Macroeconomic Review
Slide 24: Russian Retail Market Highlights 2012
Russian Retail Market Highlights 2012 24 Modern Retail Penetration – Emerging Markets Modern Retail Penetration – Developed Markets 91% 82% 80% 81% 88% 84% 83% 70% 55% 49% 45% - 50% 45% - 50% Hungary Czech Poland South Africa Turkey Russia Finland France UK USA Germany Russia Republic Sources: Eurom
Slide 25: Russian Retail Market
Russian Retail Market 25 Russian Retail Market, tln RUR Russian Food Retail Market Structure, 2011 4 year CAGR: 11% 21.3 Open Markets 19.1 11% 16.5 13.9 14.6 11.4 10.0 8.5 Modern Retail 7.4 7.5 45% - 50% Other 8.0 9.1 9.9 6.5 7.1 39% - 44% 2008 2009 2010 2011 2012 Food retail Non-food retail Sources
Slide 26: VI Summary
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Slide 27: X5 Investment Case
27 X5 Investment Case Leading Russian Retailer With Substantial Growth Opportunities • Modern food retail is one of the fastest growing industries in Russia Creating • Solid platform for growth in Russia’s still developing, modern retail Shareholder market Value • Store base in the high density Cent
Slide 28: Appendix: Financial & Operational Results
28 Appendix: Financial & Operational Results
Slide 29: Financial Highlights
Financial Highlights 29 USD mln(1) FY 2012 FY 2011 +/( - ) +/( - )% (where applicable) Retail sales 15,762.0 15,397.2 364.8 2.4% Total revenues 15,795.2 15,455.1 340.1 2.2% COGS 12,071.0 11,776.1 294.9 2.5% Gross profit 3,724.2 3,679.0 45.2 1.2% Gross profit margin 23.6% 23.8% - - EBITDA 1,123.8 1,1
Slide 30: Net Profit Breakdown
Net Profit Breakdown 30 Reported IFRS Net Income Adjusted Net Income SG&A Deferred tax NI margin expense & from 2.0% Gross profit other income Impairment impairment 45.2 NI margin (91.3) 1.6% 302.2 467.3 (555.8) 249.5 Net income, Adjusted FY 2011 (126.4) profit, Taxes FY 2012 Finance expense and Net
Slide 31: Cash Flow Highlights
Cash Flow Highlights 31 +/ - % USD mln FY 2012 FY 2011 +/( - ) change Net Cash From Operating Activities 609.2 926.1 (309.6) (34.2) % Net Cash from Operating Activities before Changes in Working Capital 1,135.2 1,189.4 (54.2) (4.6) % Change in Working Capital 7.8 174.1 (159.1) (95.5) % Net Interest
Slide 32: Capital Expenditures Overview
Capital Expenditures Overview 32 Capital Expenditures in 2012 1 Capital Expenditures , USD mln 2 IT &Other 12% New Store Openings Reconstruction & 65% Maintenance 13% 899 850 902 Logistics 10% 406 170 2008 2009 2010 2011 2012 Total 2012 CapEx was USD 902 mln Notes: (1) Based on accrual method (2) Ca
Slide 33: Debt Structure
Debt Structure 33 Debt profile Debt portfolio maturity, USD mln (3) USD mln 31 Dec 2011 % in total 31 Dec 2012 % in total 42% Total Debt 3,610.0 4,027.3 Short-Term Debt 913.2 25.3% 1,680.9 41.7% 25% 26% Long-Term Debt 2,696.9 74.7% 2,346.4 58.3% Net Debt / (Net Cash) 3,225.0 3,619.4 7% Denominated i
Slide 34: Net Retail Sales Dynamics (RUR)
Net Retail Sales Dynamics (RUR) Total Net Retail Sales Growth, % y-o-y Soft Discounter Net Retail Sales Growth, % y-o-y 15.1 21.8 10.9 11.3 10.1 9.8 10.1 9.3 10.2 16.8 17.7 17.1 8.7 13.1 13.1 6.8 10.8 11.0 9.7 10.3 5.0 5.0 9.2 8.1 4.6 4.6 7.9 3.3 5.3 5.4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov D
Slide 35: LFL Sales Dynamics
LFL Sales Dynamics(1) Total LFL Sales Growth, % Soft Discounters LFL Sales Growth, % 2.9 1.6 6.5 0.9 0.4 2.7 3.0 3.1 1.7 2.1 (0.6) (0.4) (0.1) (0.2) (0.1) 0.3 0.2 (0.9) (1.6) (0.4) (3.2) (3.3) (1.3) (1.8) (1.2) (2.5) (2.7) (3.5) (5.4) (5.2) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Slide 36: Total: Traffic and Basket
Total: Traffic and Basket(1) Total X5 Sales Growth, % Soft Discounters Sales Growth, % Total basket growth, % Total traffic growth, % Total basket growth, % Total traffic growth, % 14.1 15.9 6.1 19.5 11.3 9.9 8.7 11.1 10.2 9.9 7.7 3.6 10.0 8.8 7.7 6.9 13.9 3.8 3.5 4.2 17.3 1.6 13.9 12.2 10.7 8.5 6.7
Slide 37: LFL: Traffic & Basket
LFL: Traffic & Basket Total X5 LFL Sales Growth, % Soft Discounters LFL Sales Growth, % LFL basket growth, % LFL traffic growth, % LFL basket growth, % LFL traffic growth, % 1.0 0.5 5.4 5.0 4.7 6.0 6.1 0.1 4.8 5.8 2.8 4.0 3.6 4.1 2.8 3.5 0.9 -0.5 2.1 0.4 0.1 2.8 2.7 0.1 1.7 0.9 1.0 2.3 2.3 1.2 0.6 (
Slide 38: Convenience Store RUR Results
Convenience Store RUR Results Net Retail Sales Growth, % LFL Sales Growth, % 17.4 16.4 99.5 15.3 15.1 15.0 92.9 80.4 81.7 81.1 83.1 83.7 13.0 12.2 70.6 69.2 73.1 10.4 60.7 8.6 8.9 40.7 42.1 45.9 7.1 5.9 5.0 4.3 25.1 2.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Jan Feb Mar Apr May
Slide 39: Contact Information
Contact Information IR Department Contact Details Gregory Madick Anastasiya Kvon Andrey Napolnov Executive IR Director IR Director Senior IR manager Tel.: +7 (495) 502 97 83 Tel.: +7 (495) 792 35 11 Tel.: +7 (495) 662 88 88 ext. 22 455 Mob.: +7 (910) 459 73 56 Mob.: +7 (926) 358 85 45 Mob.: +7 (926)
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