X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Investor Presentation (October 2010)
29 slides from X5 Corporate Center's investor presentation, October 2010
Slide 1: Profitable Growth & Long-Term Leadership
Profitable Growth & Long-Term Leadership Investor Presentation October 2010 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. Introduction II. Q3 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 3
Slide 4: X5 - #1 Russia's Retailer
X5 - #1 Russia’s Retailer X5 Retail Group today • 2009 net sales - USD 8,717 mln; growth on 2008 of 25% on Russia’s Leading Food Retailers pro-forma basis (1) in RUR terms, 33% on consolidation basis(2) # Company FY 2009 Net % % in Total in RUR terms Retail Sales in Top-10 Market (6) • Q3 2010 net r
Slide 5: X5 Multi-Format Approach
X5 Multi-Format Approach X5 Operates Stores for Every Lifestyle and Family Budget Soft Discounters Net selling space: from 300 to 800 sq.m. Average assortment: 3,000 SKUs Pricing policy: Lowest price in the market on 100% of assortment Format strengths: Price and convenience Supermarkets Net selling
Slide 6: Agenda
Agenda I. Introduction II. Q3 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 6
Slide 7: Q3 2010 Operational Performance
Q3 2010 Operational Performance X5 Delivered Its Best Performance of 2010 in Q3 With RUR Net Retail Sales Growth of 21% y-o-y Q3 2010 Net Retail Sales • LFL growth was achieved against a backdrop of weak consumer RUR bln spending and prices on X5‟s shelves also substantially lagging the official inf
Slide 8: Q3 2010 LFL Results
Q3 2010 LFL Results Strong Sales and Record New Store Openings in Discounter Segment • X5‟s LFL sales growth at 6% in RUR terms year-on-year • Soft discounters achieved 10% LFL growth against last Supermarkets’ Q3 2010 LFL Performance year‟s high comparable base (16% LFL) Based on RUR- Basket Traffi
Slide 9: Selling Space Expansion in Q3 2010
Selling Space Expansion in Q3 2010 Selective and Efficient New Store Openings Number Of Stores, EoP In Q3 2010 • Net 116 stores or 54 th. sq.m. of selling space added: 1 635 44 65 1 435 58 – 97 soft discounters 289 1 235 46 275 – 14 supermarkets 1 035 15 207 – three hypermarkets 835 12 179 Total: 1,
Slide 10: X5's Regional Presence
X5’s Regional Presence Further Strengthened Presence in the Regions North-West region Moscow & the Region • Increasing share of regional sales from Net Retail Sales 2009: Net Retail Sales 2009: USD 2,433mln USD 4,460mln 21.6% in Q1 2010 to 23.3% in Q3 2010 Breakdown: Breakdown: Hypermarkets Hypermar
Slide 11: Paterson Integration Progress Report
Paterson Integration Progress Report Q3 2010 Sales up over 20% Compared to Q3 2009 Pre-Acquisition Levels Reinforces X5 positions in supermarkets, securing high quality locations in key geographies Strategic & Operational Most stores fully compatible with X5‟s requirements both operationally and
Slide 12: Agenda
Agenda I. Introduction II. Q3 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 12
Slide 13: X5's Strategic Priorities
X5’s Strategic Priorities • Build multi-format • Build supply chain success advantages • Cash generation • Strengthen value • Drive efficiency and • Focus on returns propositions margins • Liquidity • Drive LFL and top • Ensure support for management line growth long-term growth Customer Operational
Slide 14: Strategic Efficiency Program
Strategic Efficiency Program… …Impacts Every Area of X5’s Business, to Create New Competitive Advantages Support of Working Long-Term Sales Cost Capital Scalable Growth Savings Project Improvement Expansion Efficient Supply Chain Management IT Systems Integration Business Processes Improvement Labou
Slide 15: Supply Chain Efficiency
Supply Chain Efficiency … Now We are Bringing It to a New Level… … to Create a Fully Integrated & Efficient Supply Chain Purchasing/ Optimal Warehouse Efficient Efficient Sourcing DC Network Productivity Transportation In-Store Structure Logistics Areas of Focus • Assortment • Optimization of DC • W
Slide 16: Distribution Infrastructure
Distribution Infrastructure Supply Centralization Rate Rose From 51% to 61% by Year-End 2009, Well Ahead of Target Region # of DCs 000 sq. m. Dry Fruit & Veg Veg. Fresh Frozen Non-Food Central 7 128.5 v v v v DC locations as at North-West 5 65.1 v v v v 30 September 2010 Volgo-Vyatsky 1 17.5 v v v U
Slide 17: IT Systems Transformation
IT Systems Transformation Operational Excellence in Our Business Management Platforms 2012 IT SAP Implementation in line with initial schedule Infrastructure SAP for Retail Successfully launched in a pilot region in 2009 Stores X5 earned SAP‟s #1 ranking for “Highest Own HR Management Quality SA
Slide 18: In-Store Labour Productivity
In-Store Labour Productivity… … Can be Substantially Enhanced through Improving Efficiency of… In-Store and Working Workplace Store Personnel Personnel Core Processes Hours Management Education Management Areas of Focus • Merchandising • Efficient planning of • Optimization of • Performance • Educat
Slide 19: X5's Strategic Efficiency Program
X5’s Strategic Efficiency Program…. …is a Multi-Year Effort But We Are Already Delivering Results SG&A(1) as % of Sales 17.1% 17.3% 16.7% 16.7% 16.4% 15.9% 15.3% Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 (1) Excluding ESOP & D&A p. 19
Slide 20: Agenda
Agenda I. Introduction II. Q3 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 20
Slide 21: Q2 2010 Financial Performance
Q2 2010 Financial Performance(1) Net Sales EBITDA & EBITDA Margin USD mln EBITDA, USD mln EBITDA Margin, % 8.3% 25% 8.7% 20% 220 2 641 184 2,111 Q2 2009 Q2 2010 Q2 2009 Q2 2010 Gross Profit Net Profit / (Loss) Gross Profit, USD mln Net Profit, USD mln Gross Margin, % Net Margin, % 24.1% 24.7% 22% 6.
Slide 22: Q2 2010 P&L Highlights
Q2 2010 P&L Highlights(1) USD mln Q2 2010 Q2 2009 % change % change y-o-y, USD y-o-y, RUR Net Sales 2,640.9 2,111.2 25% 17% incl. Retail 2,637.7 2,099.6 26% 18% Gross Profit 637.8 520.8 22% 15% Gross Margin, % 24.1% 24.7% SG&A (excl. D&A) (449.2) (358.0) 25% 18% % of revenue 17.0% 17.0% ESOP Expense
Slide 23: Key Q2 2010 P&L Developments
Key Q2 2010 P&L Developments Net sales increased 17% year-on-year in RUR terms to RUR 79,850 mln or 25% in USD terms to USD 2,641 mln; Gross profit totaled USD 638 mln, for a gross margin of 24.1%; EBITDA amounted to USD 220 mln, for an EBITDA margin of 8.3%; X5 reported a net profit of USD
Slide 24: Q2 2010 Cash Flow Highlights
Q2 2010 Cash Flow Highlights % change % change USD mln Q2 2010 Q2 2009 USD RUR Net Cash Flows from Operating Activities (9.5) 77.9 n/a n/a Net Cash from Operating Activities 238.6 210.2 13% 6% before Changes in Working Capital Change in Working Capital (176.9) (56.1) 215% 207% Net Interest and Incom
Slide 25: Debt Financing and Liquidity
Debt Financing and Liquidity Highlights Debt Maturity Profile as at 30.06.10 • As at 30 June 2010, the Company‟s total debt amounted to RUR USD mln 59 billion or USD 1,899 million (at RUR/USD exchange rate of 31.19). Net debt totaled RUR 56 billion or USD 1,794 million. Denominated in RUR Denominate
Slide 26: Agenda
Agenda I. Introduction II. Q3 2010 Operational Performance III. Strategic Review IV. Q2 2010 Financial Performance V. 2010 Outlook p. 26
Slide 27: 2010 Outlook
2010 Outlook 2010 Outlook Net new store addition: Hypermarkets: 7-10 stores; Supermarkets: ~15 stores; Discounters: 200-250 stores. Capital Expenditures of up to RUR 18 bln Due to significantly lower food inflation to date and in the official forecast rate for the year, X5 provides a more conserv
Slide 28: X5 Share Capital Structure
X5 Share Capital Structure 0.1% 27.0% Alfa Group 1.9% Founders of Pyaterochka 47.9% X5 Management 23.1% Free Float Treasury Shares Total number of shares – 67,893,218 Equivalent of 271,572,872 GDRs p. 28
Slide 29: Contact information
Contact information IR Department Contact Details Anna Kareva Egor Voytenkov Anastasiya Kvon IR Director Senior IR Manager IR Manager X5 Retail Group N.V. X5 Retail Group N.V. X5 Retail Group N.V. 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr. Kalitnikovskaya, M
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