X5 Corporate Center · RUS:X5

X5 Corporate Center — X5 Retail Group — Q1 2021 Earnings Presentation

36 slides from X5 Corporate Center's earnings presentation, 2021

  1. Slide 1: Q1 2021 Financial Results

    | Results >X5 RETAIL GROUP inancia Q1 2021 F

  2. 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 information and opinio

  3. Slide 3: I. Highlights

    I. HIGHLIGHTS

  4. Slide 4: Strategic Highlights

    STRATEGIC HIGHLIGHTS  Market leader in Russian food retail, 12.8% market share in 12M 2020  Strategy is aimed at maintaining leadership  X5 is a multi-format retailer with focus on two largest segments of the Russian food retail - proximity and supermarkets  Balanced approach to expansion  Fast

  5. Slide 5: Key Results Q1 2021

    KEY RESULTS Q1 2021  8.1% revenue growth at  8.3% YoY selling space growth in Q1 2021 (8.0% net retail in Q1 2021 (+252 new stores sales growth in Q1 2021) added, net)  2.1% LFL sales growth  17% of X5 stores operate in new in Q1 2021 concept as of Q1 2021 (new CVP launched in 2019)  7.0% adj.

  6. Slide 6: Operational Highlights (Annual)

    OPERATIONAL HIGHLIGHTS (ANNUAL) Net retail sales dynamics, RUB bn LFL sales, % y-o-y growth CAGR 2016-2020: 17.8% 14.2% CAGR 2018-2020: 13.8% 1,973 1,728 1,525 1,287 7.7% 1,026 5.4% 5.5% 4.0% 1.5% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Selling space, th. sq. m Number of stores, end of per

  7. Slide 7: Financial Highlights (Annual)

    FINANCIAL HIGHLIGHTS (ANNUAL) Revenue dynamics, RUB bn Gross profit & gross margin CAGR 2016-2020: 17.6% CAGR 2016-2020: 18.2% CAGR 2018-2020: 15.2% 14.1% CAGR 2018-2020: 14.8% 24.2% 23.9% 24.1% 24.6% 24.6% 1,978 1,734 14.4% 1,533 1,295 487 1,034 426 370 309 250 2016 2017 2018 2019 2020 2016 2017 20

  8. Slide 8: Quality of New Openings

    QUALITY OF NEW OPENINGS Cash return on new store opened >30% +2.5 p.p. y-o-y Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Note: Opened 12-36 months ago Share of stores in ‘clinic’ 17,707 17,352 17,025 16,658 16,297 6.4% 6.3% 5.3% 4.1% 3.6% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Number of stores, eop Sha

  9. Slide 9: Sales Density Stabilisation, Impact of Regional Mix

    SALES DENSITY STABILISATION IMPACT OF REGIONAL MIX Unit: ‘000 RUB/m2 (annualised) Overall 262 262 261 258 257 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Moscow & St Petersburg Rest of Russia Moscow region & Leningrad region 353 354 217 375 376 375 351 374 215 347 371 342 211 207 204 Q1 Q2 Q3 Q4 Q1 Q1 Q

  10. Slide 10: II. Market Overview

    II. MARKET OVERVIEW

  11. Slide 11: Macro Environment (1/2)

    MACRO ENVIRONMENT (1/2) Real food retail trade started recovering in The decrease in real disposable income in Q1 2021 bust still remains negative 2020 was due to the transition to part-time employment and the placement of employees on unpaid leave 10 Y-o-y growth rates, % 2.3 Y-o-y growth rates, %

  12. Slide 12: Macro Environment (2/2)

    MACRO ENVIRONMENT (2/2) Consumer sentiment deteriorated in Q2 The main factor behind the decline in 2020 driven by the situation with COVID-19 industrial production was the reduction in and slightly improved in H2 due to the domestic and foreign demand, which began easing of pandemic related restric

  13. Slide 13: X5 vs. Russian Food Retail in Top-Line Growth

    X5 VS. RUSSIAN FOOD RETAIL IN TOP-LINE GROWTH 28% 28% 25% 23% 20% 21% 18% 21% 19% 18% 19% 14% 13% 12% 11% 9% 10% 10% 9% 8% 8% 9% 8% 10% 7% 6% 8% 5% 7% 8% 7% 4% 5% 4% 2% 5% 3% 2% 2% 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 X5 y-o-y revenue growth Top-10 Market Food CPI Source: Infoline, X

  14. Slide 14: Russian Retail Market Snapshot

    RUSSIAN RETAIL MARKET SNAPSHOT Top 10 Russian food retailers % market share % market share # Company name 2020 2019 1 Х5 12.8% 11.5% 2 Magnit 8.8% 7.6% 3 DKBR 6.6% 5.7% 4 Lenta 2.7% 2.5% 5 Auchan 1.5% 1.5% 6 Svetofor 1.3% 0.7% 7 Metro 1.2% 1.1% 8 O`KEY 1.1% 1.0% 9 Monetka 0.8% 0.7% 10 Vkusvill 0.8%

  15. Slide 15: III. Operational Results Q1 2021

    III. OPERATIONAL RESULTS Q1 2021

  16. Slide 16: X5 Operational Summary (Quarterly)

    X5 OPERATIONAL SUMMARY (QUARTERLY) Net retail sales Traffic, mln customers Net selling space (eop) 15.9% 15.4% 1,401 1,360 13.2% 12.7% 1,327 1,276 11.0% 10.7% 9.6% 8.3% 8.3% 1,205 8.1% 7,510 7,680 7,840 7,936 526 7,327 468 493 486 506 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q

  17. Slide 17: Q1 2021 Results: Net Retail Sales Summary

    Q1 2021 RESULTS: X5 NET RETAIL SALES SUMMARY Net retail sales breakdown by retail format, RUB mln Hypermarkets Hypermarkets 17,800 9,749 80,614 89,137 Supermarkets Supermarkets +8.0% 468,461 505,783 406,710 370,047 Proximity stores Proximity stores Q1 2020 Q1 2021 KEY DRIVERS  Pyaterochka, which co

  18. Slide 18: Q1 2021 Results: Expansion Summary

    Q1 2021 RESULTS: EXPANSION SUMMARY Net selling space, th. sq. m Net selling space added in 8.3% Q1 2021, th. sq. m  Total store base increased to 17,959 stores as of 7,936 31 March 2021 7,327 Hypermarkets  Pyaterochka was the main driver (26) for the store base increase with a 115 th. sq. m sellin

  19. Slide 19: X5 Regional Presence

    X5 REGIONAL PRESENSE X5 today  Multi-format presence in seven Federal Districts  Total stores – 17,959, including: ― 16,960 Pyaterochka stores ― 940 Perekrestok supermarkets ― 49 Karusel hypermarkets North North Format Unit Southern Central Volga Ural Siberian Total Caucasus Western 328 1,694 6,21

  20. Slide 20: X5 Distribution Capabilities

    X5 DISTRIBUTION CAPABILITIES Warehouse space as of 31 March 2021 Space, Federal district # of DCs th. sq. m Central 540 14 6 North-Western 150 6 Volga 230 9 14 Ural 148 6 9 6 Southern 143 5 5 Siberian 37 1 1 Total 1,248 41 Centralisation levels Highlights for Q1 2021 96%  X5 continued the implement

  21. Slide 21: IV. Financial Results Q1 2021

    IV. FINANCIAL RESULTS Q1 2021

  22. Slide 22: X5 Quarterly Financial Highlights

    X5 QUARTERLY FINANCIAL HIGHLIGHTS (QUARTERLY) Revenue Gross profit & gross margin SG&A (excl. D&A&I&LTI)[1] 25.3% 25.1% 25.2% 25.5% 18.6% 19.2% 18.1% 17.5% 17.9% 15.6% 15.3% 24.3% 12.9% 12.7% 23.8% 98.5 97.1 8.1% 14.5% 528.8 124.7 122.2 126.1 127.6 129.5 86.4 87.3 493.6 486.6 507.2 114.2 84.7 469.0

  23. Slide 23: X5 Capital Expenditures

    X5 CAPITAL EXPENDITURES Capex breakdown, Q1 2021 Capex dynamics by quarter, RUB mln 28,034 21,641 22,839 20,583 17,416 12% New store openings 29% 9% Refurbishments Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 RUB Logistics IT 7% 21 bn Expected change in Capex structure Maintenance 4% 18.2% y-o-y Other 3%

  24. Slide 24: X5 Debt Structure

    X5 DEBT STRUCTURE Debt profile Debt portfolio maturity 100% 25% RUB mln 31 Mar 2021 31 Mar 2020 Total Debt 248,009 198,632 34% Short-Term Debt 78,081 66,410 % of total debt 31.5% 33.4% 33% Long-Term Debt 169,928 132,222 % of total debt 68.5% 56.6% 8% Net Debt 235,796 186,760 31 Mar 2021 2021 2022 20

  25. Slide 25: Q1 2021: Adjusted SG&A Expenses Analysis

    Q1 2021: ADJUSTED SG&A[1] EXPENSES ANALYSIS Q1 2021 analysis as percentage of revenue 109 b.p. 19.2% 18.1% 22 b.p. 0.8% 0.6% 1.4% 1.1% 31 b.p. 1.1% 1.0% 2 b.p. 14.5% 2.4% Third party services 2.2% 13 b.p. 0.8% 1.3% Other expenses 1.0% (1) b.p. 5.0% Other store costs 5.0% 2.4% 0.6% Utilities Lease ex

  26. Slide 26: Financial Statements (1/3): Profit and Loss Statement

    FINANCIAL STATEMENTS (1/3) PROFIT AND LOSS STATEMENT IAS 17 IFRS 16 RUB mln Q1 2021 Q1 2020 +/( - ) +/ ( - ), % Q1 2021 Revenue 507,191 468,994 38,197 8.1% 507,191 Net retail sales 505,782 468,461 37,322 8.0% 505,782 COGS (379,566) (354,794) (24,772) 7.0% (377,650) Gross profit 127,625 114,200 13,42

  27. Slide 27: Financial Statements (2/3): Balance Sheet (IFRS 16)

    FINANCIAL STATEMENTS (2/3) BALANCE SHEET (IFRS 16) RUB mln 31 Mar 2021 31 Mar 2020 Total current assets 192,936 158,303 Cash & cash equivalents 12,213 11,872 Inventories 141,458 119,589 Total non-current assets 973,027 902,245 Right-of-use assets 486,628 433,345 Net PP&E 322,753 315,486 Goodwill 104

  28. Slide 28: Financial Statements (3/3): Cash Flow Statement

    FINANCIAL STATEMENTS (3/3) CASH FLOW STATEMENT (IAS 17 AND IFRS 16) IAS 17 IFRS 16 RUB mln Q1 2021 Q1 2020 +/( - ) +/ ( - ), % Q1 2021 Net cash generated from 24,413 40,041 (15,628) (39.0)% 40,420 operating activities Net cash from operating activities before 35,023 31,786 3,237 10.2% 60,407 changes

  29. Slide 29: Appendix: Performance Summary of Key Formats

    APPENDIX PERFORMANCE SUMMARY OF KEY FORMATS

  30. Slide 30: Pyaterochka Summary (1/3)

    PYATEROCHKA SUMMARY (1/3) RUSSIA’S #1 PROXIMITY NETWORK BY REVENUE 16,960 stores as of 6,657 th. sq. m of selling space 31 March 2021, as of 31 March 2021, 7.8% increase y-o-y +8.5% y-o-y Q1 2021 net retail sales – 1,115 mln of customer visits in RUB 406.7 bn, Q1 2021, -2.8% y-o-y 9.9% increase y-o-

  31. Slide 31: Pyaterochka Proximity Stores Summary (2/3)

    PYATEROCHKA PROXIMITY STORES SUMMARY (2/3) Q1 2021 net retail sales: Q1 2021 selling space: Q1 2021 sales densities: 9.9% increase y-o-y 8.5% increase y-o-y 3.8% increase y-o-y Net sales growth (% y-o-y) Net selling space growth (% y-o-y) Net sales densities (th. RUB/sq. m[1]) 252 255 255 247 246 24

  32. Slide 32: Pyaterochka Format Strategy Highlights

    PYATEROCHKA PROXIMITY STORES SUMMARY (3/3) FORMAT STRATEGY HIGHLIGHTS  Increase number of loyal customers and maximise share of their wallet: − New CVP and further adaptation of assortment − Leadership in NPS and service level − Better personnel turnover and engagement − Focus on operational effici

  33. Slide 33: Perekrestok Supermarkets Summary (1/4)

    PEREKRESTOK SUPERMARKETS SUMMARY (1/4) RUSSIA’S #1 SUPERMARKET 933 stores as of 1,014 th. sq. m. of selling 31 December 2020, space as of 31 December 2020, 10.0% increase y-o-y 15.4% increase y-o-y Q4 2020 net retail sales of 154 mln customers in Q4 2020, RUB 91.9 bn, -4.8% y-o-y 16.7% increase y-o-

  34. Slide 34: Perekrestok Supermarkets Summary (2/4)

    PEREKRESTOK SUPERMARKETS SUMMARY (2/4) Q1 2021 net retail sales: Q1 2021 selling space: Q1 2021 sales densities: 10.6% increase y-o-y 16.6% increase y-o-y 5.5% decrease y-o-y Net sales growth (% y-o-y) Net selling space growth (% y-o-y) Net sales densities (th. RUB/sq. m[1]) 344 337 335 334 326 329

  35. Slide 35: Perekrestok Format Strategy Highlights

    PEREKRESTOK SUMMARY (3/4) FORMAT STRATEGY HIGHLIGHTS  Value proposition and adapting to customer needs: − Further adaptation of assortment with focus on fresh, F&V, ready-to-eat − Omni-channel development − Targeted loyalty system and personalised promo − Best-in-class service, further increase of

  36. Slide 36: Perekrestok Online: On Track to Becoming #1 in Russian E-Grocery

    PEREKRESTOK SUMMARY (4/4) ONLINE: ON TRACK TO BECOMING #1 IN RUSSIAN E-GROCERY Net sales, RUB mln Average customer spending per 4,747 4,492 month, RUB ths 3,592 11.6 2,836 2,096 6.7 x1.6 6.0 1,630 891 867 922 636 204 276 5.6 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Before Online launch After Online launc

X5 Retail Group — Q1 2021 Earnings Presentation on 6ix