Slide 1: Q2&H1 2016 Financial Results
Q2&H1 2016 FINANCIAL RESULTS 17 AUGUST 2016 1
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 Securities on the terr
Slide 3: I. Highlights
I. HIGHLIGHTS runepmapxer 6 Tlamépouxa cfeNep=kpecrox KAPYCEAb X5RETALGROUP | 3
Slide 4: Key Achievements in Q2 2016
KEY ACHIVEMENTS IN Q2 2016 Revenue increased by X5 demonstrated strong LFL 25.9% y-o-y on the back of traffic growth of 3.0% y-o-y solid LFL sales and strong LFL traffic was positive in each selling space expansion month of the quarter SG&A expenses as a The Company added 539 new percentag
Slide 5: Operational Highlights
OPERATIONAL HIGHLIGHTS Net retail sales Traffic, mln customers Net selling space (eop), th. sq. m 28.1% 28.3% 31.0% 31.8% 26.7% 768 29.6% 29.6% 26.3% 25.7% 672 674 615 633 23.9% 3,514 3,747 3,333 250 3,080 228 231 2,844 199 195 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Slide 6: Accelerating Growth
ACCELERATING GROWTH Net Retail Sales Growth, y-o-y Total LFL Sales Growth, y-o-y 28.3% 26.7% 26.5%28.1% 26.3% 25.7% 17.1% 23.1% 15.6% 20.8% 13.3% 13.1% 11.6% 16.6% 9.8% 8.1% 7.8% 13.9% 6.3% 11.9% 6.3% 3.9% 8.1%7.8% 6.6% 0.5% -0.4%-1.7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 7: Trading Update for July 2016
TRADING UPDATE FOR JULY 2016 Net retail sales growth, y-o-y LFL Performance, y-o-y Basket Traffic X5 8.1% 8.9% 7.5% 2.5% 3.7% 4.5% 3.4% 36.2% 5.5% 5.0% 2.9% 2.3% 33.8% 1.1% 30.4% 30.0% Apr-16 May-16 Jun-16 Jul-16 27.7% 28.0% 26.9% Pyaterochka 10.4% 11.2% 23.7% 22.4% 8.5% 5.5% 3.2% 4.8% 4.6% 19.0% 18
Slide 8: II. Financial Results
II. FINANCIAL RESULTS runepmapxer 6 Tlamépouxa c&oNep=kpectox Bt KAPYCEAD X5RETALGROUP | 8
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS Revenue Gross profit & gross margin SG&A (excl. D&A&I), Rub bn 350.0 28.5% 28.6% 26.7% 26.8% 30.0% 60 18.4% 19.4% 17.8% 20.0% 17.6% 25.9% 16.5% 300.0 25.0% 25.0% 24.5% 24.3% 50 44.6 251.6 24.1% 41.3 41.5 15.0% 250.0 230.1 231.6 20.0% 23.8%40 35.2 36.1 199.9 196.1 200.0 59.8 56.4
Slide 10: SG&A Expenses Analysis
SG&A EXPENSES ANALYSIS Rub mln Q2 2016 Q2 2015 +/ ( - ), % H1 2016 H1 2015 +/ ( - ), % SG&A (excl. D&A&I), incl.: 41,536 35,201 18.0 82,845 68,557 20.8 as % of Revenue 16.5 17.6 (110) b.p. 17.1 17.9 (77) b.p. Staff costs 18,169 15,083 20.5 36,314 29,675 22.4 % of Revenue 7.2 7.5 (33) b.p. 7.5 7.8 (2
Slide 11: Capital Expenditures Overview
CAPITAL EXPENDITURES OVERVIEW Capex breakdown for Q2 2016 Capex breakdown by quarters, Rub mln Total Capex in Q2 2016: 18,589 Rub mln 575 stores opened 13% 25,604 2% New store openings 20,691 Refurbishments 18 589 16,826 14,329 Logistics 28% 57% IT, Maintenance and other Q2 2015 Q3 2015 Q4 2015 Q1 2
Slide 12: Debt Structure
DEBT STRUCTURE Debt profile Debt portfolio maturity Rub mln 30 Jun 2016 30 Jun 2015 100% 15% 38% Total Debt 156,000 129,029 Short-Term Debt 43,063 30,779 38% % of total debt 27.6% 23.9% Long-Term Debt 112,937 98,250 9% % of total debt 72.4% 76.1% Net Debt 150,569 124,497 30 Jun 2016 2016 2017 2018 2
Slide 13: Financial Statement (1/3) Profit and Loss Statement
FINANCIAL STATEMENT (1/3) PROFIT AND LOSS STATEMENT +/ ( - ), +/ ( - ), Rub mln Q2 2016 Q2 2015 +/( - ) H1 2016 H1 2015 +/( - ) % % Revenue 251,633 199,883 51,750 25.9 483,244 382,608 100,636 26.3 Net retail sales 249,722 198,623 51,099 25.7 480,323 380,676 99,647 26.2 COGS 191,826 151,808 40,018 26
Slide 14: Financial Statement (2/3) Balance Sheet
FINANCIAL STATEMENT (2/3) BALANCE SHEET Rub mln 30 June 2016 30 June 2015 +/( - ) +/( - )% Total current assets 101,986 91,875 10,111 11.0 Cash & cash equivalents 5,431 4,532 899 19.8 Inventories 62,970 50,400 12,570 24.9 Total non-current assets 315,098 257,155 57,943 22.5 Net PP&E 208,387 164,386
Slide 15: Financial Statement (3/3) Cash Flow
FINANCIAL STATEMENT (3/3) CASH FLOW Rub mln Q2 2016 Q2 2015 +/( - ) +/( - )% H1 2016 H1 2015 +/( - ) +/( - )% Net cash generated from 12,555 6,843 5,712 83.5 18,281 4,592 13,689 298.1 operating activities Net cash from operating activities 20,122 15,384 4,738 30.8 36,810 28,957 7,853 27.1 before cha
Slide 16: III. Operational Results
III. OPERATIONAL RESULTS runepmapxer © Tlamépouxa SeNep=npecton 32 KAPYCEAD X5RETAILGROUP | 16
Slide 17: Net Retail Sales Summary
NET RETAIL SALES SUMMARY Net retail sales breakdown by formats, RUB mln 189,437 37,315 249,722 20,124 2,845 198,623 Q2 2015 Q2 2016 Source: X5 data KEY Pyaterochka, which continues to meet customers’ needs in a challenging macro DRIVERS environment, was the key driver for X5’s growth thanks to: Am
Slide 18: Expansion Summary
EXPANSION SUMMARY Net selling space, th. sq. m. Net selling space added (last 12 months), th. sq. m. Total store base increased to 7,936 stores as of 30 June 3,747 2016 30 June 2016 Continued investments into 57 23 existing stores resulted in 370 refurbishments in Q2 2016 2,844 30 June 2015 Py
Slide 19: X5 Regional Presence
X5 REGIONAL PRESENCE X5 today Multi-format presence in six Federal Districts North-Western FD Pyaterochka: 922 Total stores – 7,936, including: Perekrestok: 48 ― 7,164 Pyaterochka Karusel: 17 DC: 6 ― 493 Perekrestok ― 89 Karusel ― 190 Express stores Central FD Pyaterochka: 3,095 Net sales by fed
Slide 20: X5 Distribution Capabilities
X5 DISTRIBUTION CAPABILITIES Warehouse space as of 30 June 2016 Space, Federal district # of DCs 6 th. sq. m. Central 469 15 North-Western 140 6 15 Volga 129 6 Ural 70 6 Southern 43 2 6 6 Total 851 35 2 Centralization level dynamics 85% 86% 78% 78% 76% 75% Highlights for H1 2016 70% X5 opened a ne
Slide 21: IV. Market Overview
IV. MARKET OVERVIEW runepmapxer X5RETALGROUP | 21
Slide 22: Challenging Consumer & Macro Environment
CHALLENGING CONSUMER & MACRO ENVIRONMENT Inflation and real wage growth Changing consumer attitudes: Percentage of consumers, which cut spending on different categories for the past month 30 65 25 60 20 55 15 50 10 45 5 40 0 -5 35 -10 30 -15 25 Nov 15 Dec 15 Jan 15 May 15 Jul 15 Sep 15 Aug 15 Jan 16
Slide 23: X5 Is Responding to the Challenge
X5 IS RESPONDING TO THE CHALLENGE Drivers for Macro and consumer X5 response pressure Increase in prices for locally produced products Declining/negative real wage growth Decline of food expenditures as a percentage of the customers budget Assortment Price strategy Supplier relations/ cooperat
Slide 24: Retail Market Snapshot
RETAIL MARKET SNAPSHOT Top 10 Russian Food retailers % in total market % in total market # Company name 2014 2015 1 Magnit [1] 6.2% 6.9% 2 Х5 5.2% 6.2% 3 Auchan 2.5% 2.5% 4 Dixy 1.9% 2.1% 5 Lenta 1.5% 1.8% 6 Metro 1.6% 1.5% 7 O‘Key 1.2% 1.2% 8 SPS Holding 0.4% 0.7% 9 Globus 0.4% 0.5% 10 Monetka 0.5%
Slide 25: Appendices I. Performance Summary of Key Formats
APPENDICIES I. PERFORMANCE SUMMARY OF KEY FORMATS 25
Slide 26: Pyaterochka Summary (1/2)
PYATEROCHKA SUMMARY (1/2) 7,164 stores as of 30 June 2016, 2,825 th. sq. m. of selling space 35.9% increase y-o-y (as of 30 June 2016), 41.1% increase y-o-y Q2 2016 net retail sales – 635 mln of customers (Q2 2016), RUB 189.4 bn, 28.2% increase y-o-y 30.6% increase y-o-y Q2 2016 LFL Results Share of
Slide 27: Pyaterochka Summary (2/2)
PYATEROCHKA SUMMARY (2/2) Q2 2016 net retail sales growth: Q2 2016 selling space growth: Q2 2016 sales densities: 30.6% increase y-o-y 41.1% increase y-o-y 4.3% decline y-o-y Net Sales Growth (% y-o-y) Net Selling Space Growth (% y-o-y) Sales Densities Net (th. RUB/sq.m. [1]) 34.7% 40.6% 41.1% 34.8%
Slide 28: Summary of Pyaterochka Strategy
SUMMARY OF PYATEROCHKA STRATEGY Pyaterochka is a key growth engine for X5 thanks to its customer value proposition, which has already proved its efficiency and resilience to the crisis Focus on maximum sustainable growth rate, entry and development in new regions with full coverage of all location
Slide 29: Perekrestok Summary (1/2)
PEREKRESTOK SUMMARY (1/2) 493 stores as of 30 June 2016, 502 th. sq. m. of selling space 12.6% increase y-o-y (as of 30 June 2016), 12.8% increase y-o-y Q2 2016 net retail sales – 87 mln of customers (Q2 2016), RUB 37.3 bn, 19.2% increase y-o-y 15.6% increase y-o-y Q2 2016 LFL Results Share of X5's
Slide 30: Perekrestok Summary (2/2)
PEREKRESTOK SUMMARY (2/2) Q2 2016 net retail sales growth: Q2 2016 selling space growth: Q2 2016 sales densities: 19.2% increase y-o-y 12.8% increase y-o-y 1.3% increase y-o-y Net Sales Growth (% y-o-y) Net Selling Space Growth (% y-o-y) Sales Densities Net (th. RUB/sq.m. [1]) 298 16.4%17.7% 19.2% 2
Slide 31: Summary of Perekrestok Strategy
SUMMARY OF PEREKRESTOK STRATEGY Perekrestok has made significant progress fine-tuning its value proposition in 2015, including an updated product range, rebranding and refurbishment programme Development in Moscow and St. Petersburg is a priority, critical mass growth in regional cities with >1 ml
Slide 32: Karusel Summary (1/2)
KARUSEL SUMMARY (1/2) 89 stores as of 30 June 2016: 384 th. sq. m. of selling space 7.2% increase y-o-y (as of 30 June 2016), up 6.4% y-o-y Q2 2016 net retail sales: 34 mln of customers (Q2 2016), RUB 20.1 bn, 3.6% increase y-o-y 5.0% increase y-o-y Q2 2016 LFL Results Share of X5's Q2 2016 sales: ~
Slide 33: Karusel Summary (2/2)
KARUSEL SUMMARY (2/2) Q2 2016 net retail sales Q2 2016 selling space Q2 2016 sales densities: growth: 3.6% increase y-o-y growth: 6.4% increase y-o-y 2.6% increase y-o-y Net Sales Growth (% y-o-y) Net Selling Space Growth (% y-o-y) Sales Densities Net (th. RUB/sq.m. [1]) 8.8% 9.1% 15.4% 210 211 210
Slide 34: Summary of Karusel Strategy
SUMMARY OF KARUSEL STRATEGY Development and testing of value proposition is at the core of Karusel's strategic agenda, as well as a focus on operations and efficiencies Gradual finalisation and testing of compact city hypermarket model with focus on price perception Transition to active growth a