GDR OKEY Group ORD · RUS:OKEY
GDR OKEY Group ORD — O'KEY Group — IPO Roadshow (October 2010)
32 slides from GDR OKEY Group ORD's IPO roadshow presentation, October 2010
Slide 1: O'KEY Group of Companies Roadshow Presentation
October-2010 O’KEY Group of Companies Roadshow Presentation 1
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The information in this document has been prepared by O‟KEY GROUP S.A. (the "Company") solely for use at a presentation to be held in connec
Slide 3: Disclaimer
Disclaimer This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments who fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Pro
Slide 4: Offering structure and timing
Offering structure and timing Issuer O‟KEY GROUP S.A. Indicative schedule: October – November 2010 S M T W T F S Approximately up to 38,141,031 shares or 15.1% of the current share capital: Primary shares: up to 15,186,000 shares (6.0% of the share capital) 1 2 Secondary shares offered by Se
Slide 5: Summary overview
Summary overview Core hypermarket format with supplementary Overview supermarkets (as of June 30, 2010) A leading Russian food retailer in the hypermarket segment in Hypermarkets Supermarkets terms of revenue in 2009(1) Number of stores 32 20 One of the leading food retailers in St. Petersburg w
Slide 6: Investment highlights
Investment highlights A leading Russian food retailer with strong expertise in hypermarkets … … managed by … circa 10 highly talented and years of successful experienced professionals growth … … operating in one … and a strong and of the world’s most effective real estate attractive food retail port
Slide 7: Circa 10 years of successful growth
Circa 10 years of successful growth Selling space dynamics 70 67.9 Supermarkets (ths. sq.m.) 60% (Revenue RUB bln.) 60 51.1 Hypermarkets (ths. sq.m.) Selling space CAGR '05-'09 50 233 Revenue 40 30.5 190 21 30 146 15 16.7 6 20 11.0 87 3 212 175 10 36 140 17 28 85 6 0 2002 2003 2004 2005 2006 2007 20
Slide 8: Russia is one of the world's most attractive food retail markets
Russia is one of the world’s most attractive food retail markets Russia is one of the largest … with one of the lowest rates food retail markets in Europe … of penetration by modern retail … 300 272 100% Average 87% 88% 80% 80% 83% 221 80% 74% (2) 71% 72% 73% 73% 78% (US$bln.) 197 200 159 57% 143 12
Slide 9: O'Key has strong expertise in hypermarkets, format with appealing growth prospects
O’Key has strong expertise in hypermarkets, format with appealing growth prospects Distinctive expertise in hypermarkets Focused on one core format – hypermarkets Supermarkets (O‟Key Express brand) – a satellite format, providing a better fit for specific locations (i.e. residential areas) Str
Slide 10: Convenient locations only
Convenient locations only Typical hypermarket location Typical supermarket location Key statistics (as of June 30, 2010) Key statistics (as of June 30, 2010) Number of stores: 32 Total area: 488,304 sq.m. Number of stores: 20 Total area: 39,326 sq.m. Constant SKUs: 35,400(1) Av. selling
Slide 11: Distinctive concept emphasizing a pleasant and convenient shopping experience
Distinctive concept emphasizing a pleasant and convenient shopping experience Modern, well positioned and designed stores … Convenient locations with large parking areas and selling space Appealing interior design with good lighting, convenient shelf layout and no “warehouse” feel Family frien
Slide 12: Strong customer proposition with focus on fresh & delicatessen and non-food products
Strong customer proposition with a particular focus on fresh & delicatessen and non-food products Wide product range … … with a focus on fresh & … as well as a high share delicatessen products … of non-food goods Up to 64,000 SKUs of food and non- food products at affordable prices Product matri
Slide 13: All customer needs are addressed and better products offered at affordable prices
All customer needs are addressed and better products are offered at affordable prices … Pricing model allowing for significant Comments competitive advantages Products at affordable prices in three main segments: Basic Price Market Market Average entry highest Average + price price Prices
Slide 14: Customer loyalty and high brand equity
…which translates into our customers’ loyalty and high brand equity Higher than average basket (hypermarkets) … … and LFL traffic growth (RUB terms, 2009) … 900 795 10.6% 10% (Average ticket, 617 5.0% RUB, 2009) 600 555 528 521 5% 3.6% 300 0% (1.5%) O'KEY Continent X5 Retail Seventh (2.2%) Group Mag
Slide 15: We already have a large geographical presence
We already have a large geographical presence … Geographical coverage Historical store roll-out 60 Urals 52 1 50 Siberia 46 3 Murmansk - 2 HM 3 40 South 37 12 1 9 St. Petersburg(1) Centre 7 6 30 5 - 14 SM 24 2 - 14 HM North-West 20 4 1 12 27 29 30 10 1 19 Moscow(2) 5 3 4 11 - 2 HM 0 1 4 1 - 1 SM Niz
Slide 16: … and an efficient supply chain
… and an efficient supply chain … “Smart” supply chain Delivery chain Local suppliers Suppliers Direct delivery Stores 2Q 2010 1% data 1% (costs O’KEY split) 53% 46% Logistics Delivery Delivery 53% 46% Cross-docking by trucks to stores Dispatching Federal suppliers Local suppliers Federal Fede
Slide 17: … supported by innovative IT platform
… supported by innovative IT platform … Key elements of IT system Covered business segments Logistics & purchasing Assortment planning IBS Suite (implementation stage) Price management Retail analysis Start of implementation – August 2009, Expected completion – end of 2012 Accounting IT Pl
Slide 18: The most efficient operations among Russian public food retailers
… which is why we have the most efficient operations among Russian public food retailers LFL sales growth (RUB terms, 2009) Revenue per sq.m.(1) (2009) 15% 12 10.1(2) 11.6% 9.0 10 8.6 (US$'000/sq.m.) 10.0% 7.9 10% 8 5.7 6 5% 4.2% 4.1% 4 2 0% 0 Dixy O'KEY Magnit Continent X5 Retail O'KEY Magnit Conti
Slide 19: Competitive strengths and strategy to realize full potential
Our competitive strengths make us confident that our strategy will allow us to realize our full potential Strategic goals Key plans and targeted results Further penetrate the large and lucrative Moscow market Continue to expand further Expand presence outside St. Petersburg in cities with high p
Slide 20: Key financials snapshot
Key financials snapshot RUB millions 2005 2006 2007 2008 2009 1H 2009 1H 2010 P&L Revenue 11,019 16,700 30,533 51,143 67,875 31,488 38,254 YoY growth n/a 51.6% 82.8% 67.5% 32.7% n/a 21.5% Gross profit 1,948 3,421 6,468 10,761 14,768 6,597 8,107 Gross margin 17.7% 20.5% 21.2% 21.0% 21.8% 21.0% 21.2%
Slide 21: Historical performance demonstrates growth and efficiency
Our historical performance demonstrates our ability to deliver growth and increase efficiency of operations Revenue LFL Sales (RUB terms) 80,000 45% 67,875 40% 39.1% (RUB mln.) 60,000 CAGR = 58% 51,143 21% 38,254 35% 32.8% 32.6% 40,000 31,488 30,533 30% 16,700 26.9% 20,000 11,019 25% 0 21.1% 2005 20
Slide 22: EBITDA margin evolution
EBITDA margin evolution EBITDA margin bridge 2007-2009 10% 0.7% 0.5% 8.9% 0.1% 8.7% 9% 0.3% 0.6% (0.04%) (0.6%) 8% 0.4% (0.4%) 7.2% Resulting from an 7% increase in the Share of (0.1%) average number of rented stores 6% employees per increased selling space 5% 4% (1) (1) EBITDA (1) GM Payroll Commun
Slide 23: Investing in growth and efficient cash management
We actively invest in our future growth and increase efficiency of our cash management Total CAPEX dynamics(1) Trade Operating Cash Cycle(4) (Cash Flow data) 6,000 60 55 (2) 5,424 42 39 40 5,000 4,842 4,711 20 (Days) 0 4,000 (RUB mln.) (2) 3,403 (20) 3,194 3,000 (26) (40) (29) (29) (60) 2,000 (65) (
Slide 24: Paying special attention to our financial standing
Despite the aggressive roll-out, we pay special attention to our financial standing Net debt(1) Net debt / EBITDA 20,000 7x 6.5x 15,122 6x 5.1x 13,420 14,004 4.9x (RUB mln.) 15,000 5x 11,222 9,380 4x 10,000 3.0x 3x 2.4x (2) 5,383 2.2x 5,000 2x 1x 0 0x 2005 2006 2007 2008 2009 1H 2010 2005 2006 2007
Slide 25: Corporate governance
Corporate governance Dividend policy and Corporate governance levels management incentive program Responsible for setting strategic goals for the Company Board of directors is formalizing its Board of Directors consists of 5 members including: Board of dividend policy with the aim to provide
Slide 26: O'Key Group – a unique opportunity in the Russian food retail sector
O’Key Group – a unique opportunity in the Russian food retail sector Highlights Comments # 3 Russian (excl. multinationals) food retailer in terms of revenue in 2009(1) A leading Russian food retailer with strong expertise in hypermarkets … Historical focus on hypermarkets, one of the most attra
Slide 27: Appendix
SONeY TT APPENDIX 27
Slide 28: Experienced top-management team (I)
Experienced top-management team combining best-in- practice international and local expertise (I) Patrick Longuet Sebastien Verhaeghe Dmitry Pryanikov Vladislav Kurbatov CEO Executive Director Financial Director Operations Director One of Supervises Director of the Joined the Europe’s most finance,
Slide 29: Experienced top-management team (II)
Experienced top-management team combining best-in- practice international and local expertise (II) Georges Kowalkowski Maksim Schegolev Eric Richard Alexander Lapin Marketing & Sales Property management Development Director Expansion Director Construction Director Director Responsible Responsible fo
Slide 30: Experienced top-management team (III)
Experienced top-management team combining best-in- practice international and local expertise (III) Nataliya Gabdelkhaieva Maksim Platonov Elmira Hadieva Dmitri Budanov Head of food purchase Head of non-food purchase Human Resources Director Head of Security Responsible Joined the Responsible Respon
Slide 31: Transparent legal structure
Transparent legal structure Caraden Ltd Brookvalley Ltd Barleypark Ltd (Isle of Man) (Isle of Man) (Isle of Man) 25% 64% 11% O’KEY GROUP SA (Luxembourg) 99% 99% 99% 99% O’KEY – 100% O’KEY Group Dorinda Mir Torgovli O’KEY LLC Logistics LLC LLC JSC CJSC Importing and Operational Employer for O
Slide 32: Established private label operations
Established private label operations serve as a tool to address customer needs and pricing expectations Ultra fresh food products FMCG products Non-food products In store made products including O‟KEY labeled food and non-food products Other O‟KEY private label brands in fresh bakery and delic