X5 Corporate Center · RUS:X5

X5 Corporate Center — X5 Retail Group — Investor Day (October 2014)

18 slides from X5 Corporate Center's investor day presentation, Oct 29, 2014

  1. Slide 1: Disciplined Growth From Back-to-Basics Focus

    “Disciplined Growth From Back-to-Basics Focus” Elena Milinova, CFO X5 Capital Markets Day 2014 Moscow, Russian Federation 29 October 2014 X5 RETAIL GROUP

  2. Slide 2: Macro Environment

    MACRO ENVIRONMENT )XSRETAILGROUP © Tiamépowwa fonepznpecron Mx

  3. Slide 3: Russian Macro Environment

    RUSSIAN MACRO ENVIRONMENT Industrial Production Real Retail Food Sales Growth Food Inflation 2,5% 10,5% 9,4% 7,2% 7,3% 1,1% 1,9% 1,4% 1,5% 1,1% -0,1% -0,4% Q4'13 Q1'14 Q2'14 Q3'14 Q4'13 Q1'14 Q2'14 Q3'14 Q4'13 Q1'14 Q2'14 Q3'14 Real Wage Growth Unemployment Rate Consumer Confidence Index 4,5% 5,5% 5

  4. Slide 4: Russia's Fiscal Position Remains Strong

    RUSSIA’S FISCAL POSITION REMAINS STRONG International Reserves, mln USD Current Account Position as % of GDP Government Debt Ratio as a % of GDP Budget Balance as a % of GDP Source: Goldman Sachs, Russia: Equity Market Overview 4

  5. Slide 5: Financial Strategy

    FINANCIAL STRATEGY )XSRETAILGROUP © Tiamépowwa fonepznpecron Mx

  6. Slide 6: Financial Management Strategy

    FINANCIAL MANAGEMENT STRATEGY Liquidity Top-tier banks placements, limit cash concentrations Management Maintain available bank credit lines sufficient to cover short-term debt Centralized approach to funding and liquidity management Funding Establish diversified sources of funding by instrument

  7. Slide 7: Financial Policies & Guidance

    FINANCIAL POLICIES & GUIDANCE FY Original 2014 9M Updated 2014 Metric Covenants 2013 Guidance 2014 guidance Net Retail Sales Growth, % na 8.7% 10.0% - 12.0% 17.8% 17.0%-19.0% EBITDA Margin, % na 7.2% 6.8% - 7.2% 7.2% 7.2%-7.5% CAPEX, RUR billion na 23 ~40 17 ~34 Selling Space Growth, % na 12.9% 10.5

  8. Slide 8: Q3 2014 Financial Results

    Q3 2014 FINANCIAL RESULTS X5RETAILGROUP © Tiamépouwxa fone

  9. Slide 9: Financial Highlights

    FINANCIAL HIGHLIGHTS RUB million Q-o-Q Y-o-Y Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 (where applicable) +/( - )% +/( - )% Revenue 124,246 150,341 144,167 155,579 152,539 (2.0) % 22.8 % Net retail sales 123,534 149,786 143,898 155,109 152,028 (2.0) % 23.1 % COGS (93,155) (113,559) (109,521) (117,469)

  10. Slide 10: Revenue & EBITDA Dynamics

    REVENUE & EBITDA DYNAMICS 1,995 1,281 514 152,539 24,791 (88) (200) 124,246 Revenue Dynamics, Total: + 30.3% Total: + 8.1% Total: + 8.6% Total: + 26.3% RUB million Central + 29.8% Central: + 9.4% Central: + 22.8% Central: + 26.3% NW: + 17.9% NW: + 13.0% NW: - 0.1% NW: - Other: + 39.8% Other: + 1.5%

  11. Slide 11: SG&A Breakdown

    SG&A BREAKDOWN Q3 % of Q3 % of Q2 % of Q3 % of RUB mln 2013 Revenue 2014 Revenue 2014 Revenue 2014 Revenue 10,344 8.3% 12,468 8.2% Staff Costs 12,001 7.7% 12,468 8.2% 5,768 4.6% 7,038 4.6% Lease Expenses 6,719 4.3% 7,038 4.6% 3,369 2.7% 3,861 2.5% D&A 4,108 2.6% 3,861 2.5% 2,549 2.1% 3,057 2.0% Util

  12. Slide 12: Cash Flow Highlights

    CASH FLOW HIGHLIGHTS RUB mln Q3 2014 Q3 2013 +/( - ) +/ ( - ), % Net cash generated from operating activities 6,825 3,334 3,491 104.7 % Net cash from operating activities before changes in working capital 10,897 9,231 1,666 18.0 % Change in Working Capital 379 (2,979) 3,358 n/a (Increase) in trade a

  13. Slide 13: Capital Expenditures Overview

    CAPITAL EXPENDITURES OVERVIEW Q3 2014 Capital Expenditures(1) Net Investment Cash Flows, RUB mln Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 New Store Reconstruction Openings & Maintenance 50% 41% (4,289) (4,911) (5,183) (6,590) Logistics, IT & Other (7,885) 9% In Q3 2014, Capex Focused on Organic Expan

  14. Slide 14: Condensed Balance Sheet

    CONDENSED BALANCE SHEET RUB mln 31 December 2013 30 September 2014 +/( - ) +/( - )% Total current assets 76,488 73,136 (3,352) (4.4) % Cash & cash equivalents 7,611 3,520 (4,091) (53.8) % Inventories 37,465 37,429 (36) (0.1) % Total non-current assets 225,415 229,228 3,813 1.7 % Net PP&E 134,998 140

  15. Slide 15: Debt Structure

    DEBT STRUCTURE Debt Profile Debt Portfolio Maturity RUB mln 30 Sep 2013 31 Dec 2013 30 Sep 2014 47.0% Total Debt 121,346 110,523 107,619 Short-Term Debt 44,273 30,680 17,003 % of total debt 36.5% 27.8% 15.8% 14.7% 31.2% Long-Term Debt 77,073 79,843 90,616 7.1% 6.1% % of total debt 63.5% 72.2% 84.2%

  16. Slide 16: Going Forward: Key Focus

    GOING FORWARD KEY FOCUS  Redesign internal financial procedures to support new operating model  Implement benchmarking analysis as a tool to improve efficiency  Develop new sources of financing to support growth strategy 16

  17. Slide 17: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION 17

  18. Slide 18: 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

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