X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — Investor Day (October 2018)
88 slides from X5 Corporate Center's investor day presentation, Oct 25, 2018
Slide 1: X5: Leading and Evolving
XO: LEADING AND EVOLVING X5 Capital Markets Day 2018 London, 25 October 2018 )X5 RETAIL GROUP
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 selll 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
Slide 3: Agenda
AGENDA > we Performance update and financial results Q3 and 9M 2018 S) X5‘s strategy evolution oS Overview by format: * Pyaterochka * Perekrestok * Karusel X65 RETAIL GROUP
Slide 4: X5: Leading and Evolving - Igor Shekhterman, CEO
X9: LEADING AND EVOLVING Igor Shekhterman, CEO X5 Capital Markets Day 2018 London, 25 October 2018 X65 RETAIL GROUP
Slide 5: The market remains attractive, despite challenges
THE MARKET REMAINS ATTRACTIVE, DESPITE CHALLENGES > RUSSIAN FOOD RETAIL MARKET — KEY DATA 8. 10% 24% largest globally by share of modern share of top five food retail turnover format in overall retail players RUB 14.4 tn in 2017 market ADDITIONAL GROWTH DRIVERS ¢ Further transition to modern retail
Slide 6: Shift from traditional trade to modern trade
SHIFT FROM TRADITIONAL TRADE TO MODERN TRADE > 2017 @ 2021 TRADITIONAL TRADE MODERN RETAIL CHAINS Source: Infoline
Slide 7: Potential for largest players
POTENTIAL FOR LARGEST PLAYERS > TOP-5 PLAYERS’ SHARE OF GROCERY RETAIL IN 2017 71% 71% 60% 59% 19% 46% ; - 24% e Si == a eeeege MARKET CONSOLIDATION WILL BE THE KEY DRIVER OF FURTHER DEVELOPMENT Source: Euromonitor, Infoline (for Russia only) X65 RETAIL GROUP 7
Slide 8: Russian food retail market trends
RUSSIAN FOOD RETAIL MARKET TRENDS > Aging population Increasing competition Online Delivery Changing consumer behavior = 5 Increasing popularity of fruit Emergence of non-traditional players and vegetables, ready-to-eat 2 and fresh categories Development of specialised retailers
Slide 9: Committed to the three major food retail formats
COMMITTED TO THE THREE MAJOR FOOD RETAIL FORMATS > RUB tn renmnn ean a Ee | " “oem ee os . “pemens a Other formats (hard discounters, gas | | 08 stations, dollar stores, . etc.) TOTAL MARKET SIZE Traditional trade 35 2017: RUB 14.4 IN 2021: RUB 17.2 TN Bm 207 © 2021 Substantial mid-term growth poten
Slide 10: Competitive environment
COMPETITIVE ENVIRONMENT > PROXIMITY Competitive advantages: * Strong brand + Loyalty programme + Broad assortment + Focus on fresh 100% Pyaterochka 2016 2017 SUPERMARKETS Competitive advantages: *Strong brand in capitals *Service level, NPS «Focus on fresh *Online service 100% Perekrestok 2016 2017
Slide 11: Key achievements
KEY ACHIEVEMENTS > Listing on MOEX enabled MSCI Russia Index inclusion Dividend policy approved and e debut dividend payment made Launched online business Leadership with market share exceeding 10% o. - ——~4 \\ Maintaining profitability ye. £ \oss & and return on investments | / \ A | | A ‘ SF ] | \
Slide 12: Balanced, profitable growth
BALANCED, PROFITABLE GROWTH > 28% 28% 20% 12% 9% “© TOP-10 4% © MARKET 2013 2014 2015 2016 2017 9M 2018 STARTING FROM 2015, X5 HAS CONSISTENTLY OUTPERFORMED THE MARKET AND COMPETITION Note: revenue growth y-o-y 5 RETAIL GROUP Source: Infoline, X5 analysis 12
Slide 13: X5 has joined the top-25 global food retailers by revenue
X5 HAS JOINED THE TOP-25 GLOBAL FOOD RETAILERS BY REVENUE > 2015 | 1 1 Walmart 1 2 ¢ 2@ 2 ¢ 4 Carrefour (& 4 Carrefour (@ 4 Carrefour (@ 5 TESCO 5B 5g 39 _FamilyMart 33 pees 91 @ MERCADONA AQ >xs RETAIL GROUP 34 >X5RETAIL GROUP 23 >XS RETAIL GROUP 4] TRADER JoE’s 35 QO eronimomagrins 26 LON Source:
Slide 14: Our mission and goals
OUR MISSION AND GOALS > To become the most valuable company in the eyes of customers, employees, and shareholders, which means: CUSTOMER RECOGNITION + EMPLovEE RECOsNITION _ SHAREHOLDER ond HE Mah engogement =" RECOGNITION FOCUS ON STRATEGIC KPIs NPS EMPLOYEE TURNOVER ROIC PRICE PERCEPTION ENGAGEMEN
Slide 15: Our strategy is evolving (1/2)
OUR STRATEGY IS EVOLVING (1/2)> __ da - — INNOVATION cAPABILTIES y Y f \ } q NEXT GEN N RETAIL 1-2 YEARS 1-3 YEARS 1-5 YEARS X5 RETAIL GROUP 15
Slide 16: Our strategy is evolving (2/2)
OUR STRATEGY IS EVOLVING (2/2) > STRENGTHEN THE CURRENT BUSINESS PROXIMITY SUPERMARKETS HYPERMARKETS CVP refresh Further CVP adaptation: New concept validation Regional model development + Fresh and F&V Sales densities improvement Operational improvement: « Private label + Shrinkage reduction + Read
Slide 17: Our competitive advantages
OUR COMPETITIVE ADVANTAGES > STRONG CORPORATE GOVERNANCE EFFECTIVE OPERATING MODEL ® e STRONG LEADERSHIP TEAM Xx 5 L8 STRONG BRANDS DEVELOPED BACKBONE INFRASTRUCTURE i) Ce EFFECTIVE LOYALTY PROGRAMME >X5 RETAIL GROUP 17
Slide 18: Strong corporate governance
STRONG CORPORATE GOVERNANCE > General Meeting of Shareholders Tier I: Supervisory Board Tier Il: Management Board Audit Committee Nomination & Remuneration Committee Related-Party Committee Executive Board Ethics Committee Investment Committee Tender Committee Innovation Committee XS RETAIL GROUP 18
Slide 19: Key strategic priorities
KEY STRATEGIC PRIORITIES > 1 Further adapt CVP and assortment to customer needs 2 Best-in-closs service reflected in highest NPS level Samar and balanced expansion / operational efficiency Pyvevetop technology-based _ solutions, innovations and big data Bo Avene development X65 RETAIL GROUP 19
Slide 20: X5: Leading and Evolving - Svetlana Demyashkevich, CFO
X9: LEADING AND EVOLVING Svetlana Demyashkevich, CFO X5 Capital Markets Day 2018 London, 25 October 2018 X65 RETAIL GROUP
Slide 21: Key macro trends
KEY MACRO TRENDS > ¢ Despite VAT rate hike, economic growth in 2019 is expected to remain positive and approach 1.5% « Analyst community consensus is for inflation to accelerate in 2019 on the back of global trends, exchange rate dynamics, lower harvest and VAT rate hike ¢ Consumer demand and expect
Slide 22: ROIC dynamics
ROIC DYNAMICS > <5 RETAIL GROUP oe o———o ae ee O Qt 2018 Sere 2017 —— e—_*® 92.2017 — o.—__® @ ACTUAL PLAN PYATEROCHKA - CAPITALS Resni7) 93 2017 e o_+s oa _ e Qi 2018 Ate — oe axe oe Oo e—_* @ ACTUAL @ PLAN PYATEROCHKA AND PEREKRESTOK - ORGANIC 22017 93207 12013 ——_ ee 022017 a ee . 2 2017 ———— © [
Slide 23: Stable share of stores in 'Clinic'
STABLE SHARE OF STORES IN ‘CLINIC’ > DESPITE CONTINUED RAPID GROWTH * Clinic is the process of monitoring and decision-making on projects with low operating efficiency (below financial targets) + Key drivers behind stores’ low efficiency: location, competition, operations management Share of stores
Slide 24: Strong performance in Q3 2018
STRONG PERFORMANCE IN Q3 2018 > 0.5% LFL sales growth 0.9% LFL traffic growth Revenue up 17.6% y-o-y Gross profit margin up 91 b.p. to 24.6% 594 new stores 244 th. sq. m. selling space added, 83% of which was organic Adj. EBITDA margin" up 14 b.p. to 7.4% Source: X5 data [1] - Adjusted for LTI, exit
Slide 25: 2018 results: operational highlights
03 2018 RESULTS: OPERATIONAL HIGHLIGHTS > NET RETAIL SALES ; al a H 202% i 042017 = 12018 = 22018 03.2018 retall sales, RUB bn Growth y-o-y, % LL SALES, Y-0-Y 4.6% ; 0.5% 0.5% E.. cn 032017 = 42017 no 22018 = 03 2018 Source: X5 data TRAFFIC, MLN CUSTOMERS : 168 1,184 ' 041 ' on J L | 2018 : 032018 L
Slide 26: 2018 results: financial highlights
03 2018 RESULTS: FINANCIAL HIGHLIGHTS > REVENUE GROSS PROFIT & GROSS MARGIN SG&A (EXCL. V&ABIS<I A 63.9 64.8 67.0 85.9 83.7 a = 75.8 = 2 54.6 375.5 319.4 32017 «= 042017 «= anz01e «= a2 2018 «= 03 2018 032017 a2017 «= at2018 = gaze) 03 2018 2017 azo?) ati «=e mnte 03 2018 mRevenue, RUBbn Growth y-
Slide 27: 2018 results: adjusted SG&A expenses analysis
03 2018 RESULTS: ADJUSTED SG&A‘ EXPENSES ANALYSIS > 03 2018 ANALYSIS 0.9% AAS PERCENTAGE OF REVENUE 0.9% WEES os, 17.1% 1.1% = abi, 032018 032017 Source: X5 data [1] - Adjusted for D&A&l, LTI, exit share-based payments 0.9% 0.8%, 0.9%. 1.1% 2.1% 17.6% 1 5.0% 7.7% 9M 2018 ANALYSIS AAS PERCENTAGE OF R
Slide 28: 2018 results: capital expenditures overview
03 2018 RESULTS: CAPITAL EXPENDITURES OVERVIEW > CAPEX BREAKDOWN FOR Q3 2018 CAPEX BREAKDOWN BY QUARTER, RUB BN 0 38.1 26.2 204 es 164 i : 7 lj HOASTORES = "27 tane Oame 50 OPENED (GROSS) TOTAL CAPEX IN G3 2018: RUB 18.8 BN IN Q3 2018, CAPEX PROGRAMME FOCUSED ON ORGANIC EXPANSION, IT AND MAINTENANCE
Slide 29: Q3 2018 results: debt structure
Q3 2018 RESULTS: DEBT STRUCTURE > Debt profile RUB min 30 Sep 2018 30 Sep 2017 Total debt 217,184 172,064 Short-term debt 55,987 46,496 % of total debt 25.8 27.0 Long-term debt 161,197 125,568 % of total debt 74.2 73.0 Net debt 201,846 160,350 Covenants & liquidity update Covenant metrics giliguidi(
Slide 30: 2019 guidance
2019 GUIDANCE > Around 2,000 new gross openings » Maintaining profitability level and returns Continuing dividend payments in accordance with dividend policy )X5 RETAIL GROUP 30
Slide 31: X5: Leading and Evolving - Sergei Goncharov, Pyaterochka
X9: LEADING AND EVOLVING Sergei Goncharov, General Director of Pyaterochka X5 Capital Markets Day 2018 London, 25 October 2018 X65 RETAIL GROUP
Slide 32: Where we are: proximity segment
WHERE WE ARE © STRONG OUTLOOK FOR THE PROXIMITY SEGMENT -, PROXIMITY SEGMENT (RUB TN, INCL. VAT) CAGR 10.4% CAGR 11.0% 6.7 ¢ The segment accounts for 31% of the Russian food retail market « Since 2015 the segment has contributed 60% to food retail sector growth ¢ Growth is expected to continue 2017
Slide 33: Pyaterochka today
PYATEROCHKA TODAY > HIGHLIGHTS 12,822 stores as of 30 September 2018: 22.3% increase y-0-y RUB 297.8 bn, ts 18.3% increase y-o-y ry, 3 2018 net retail sales: 1 E Share of X5's Q3 2018 sales: around 80% Average check: ; RUB 333 (Q3 2018) THE NEIGHBORHOOD STORE FOR YOUR DAILY SHOPPING NEEDS 5,035 th.
Slide 34: Current status
CURRENT STATUS > Fath RAPID, Stable VEGIGS Toole ] Ee) HIGH OUALITY Gi Co 2 F ‘j eb | e base brought to new CVP.target audience y a _ tof aaa a Pyaterochka Helps y = CUSTOMERLOYALTY —* Piloted rs [25] wrasmrucrune + Advanced analy | |) X5 RETAIL GROUP 34
Slide 35: Actions to fulfill our new focus
ACTIONS TO FULFILL OUR NEW FOCUS > I Smart expansion Management focus 3 Operational efficiency 4 Innovations h Strategic focus on customer satisfaction and employee involvement X65 RETAIL GROUP 35
Slide 36: Our strategic re-focus
1 OUR STRATEGIC RE-FOCUS > SMART EXPANSION Approach to further expansion +22% 135% _| se | 10,481 7,787 Sep-16 Sep-17 Sep-18 ¢ Gradual slowdown of growth rates ¢ Rational selection of new sites: maintaining ROIC for new openings ¢ Natural replacement of smaller players ¢ Focus on growth in existing
Slide 37: Focus on CVP: insights from loyalty programme
2 FOCUS ON CVP > INSIGHTS FROM LOYALTY PROGRAMME REVENUE BY LOYALTY SEGMENT Regular customers without loyalty cards Regular customers with loyalty cards High value customers with loyalty cards Customers Revenue APPOXIMATE SPENDING PER PERSON * Moving 1% of customers without loyalty cards to customer
Slide 38: Focus on CVP: adaptation of assortment
2 FOCUS ON CVP > ADAPTATION OF ASSORTMENT ‘SYSTEMATIC CLIENT-CENTRIC ASSORTMENT MANAGEMENT PROCESS ENHANCE FRESH CATEGORY 3EL QUALITY )X5 RETAIL GROUP 38
Slide 39: Improve price perception through systemisation of pricing and promo
IMPROVE PRICE PERCEPTION THROUGH SYSTEMISATION OF PRICING PROCESSES AND PROMO X5 RETAIL GROUP 39
Slide 40: Operational efficiency
ONAL EFFICIENCY > SHRINKAGE LOGISTICS LEAN STORE « Launch of shrinkage committees in macro regions ¢ Remote F&V acceptance launched at DCs ¢ Smart reduction in assortment * Continued development of multilayer logistics infrastructure * Focus on improving efficiency of transportation between own DCs
Slide 41: Innovations
NINN IOC RA \ | YO ME OVATIO OMNI I NOVATIONS X65 RETAIL GROUP 41
Slide 42: Strong operating model
STRONG OPERATING MODEL > ¢ Distribution of decision making process to macro region level ¢ Number of executives reporting directly to the CEO reduced from 21 to 15 ¢ Majority of the new appointments are from the internal pool of candidates Macro-region model Stores Divisions 6 macro-regions CEO X65
Slide 43: Customer centric model and employee involvement
5 CUSTOMER CENTRIC MODEL AND EMPLOYEE INVOLVEMENT) e a Oo CERRIOMER |e Newvalues and new incentives ’ _ CP | anocucture * Organisational structure for customer feedback analysis and continuous concept improvement. _ * Develop plan to increase efficiency of hiring and managing personnel PERSONNEL Dev
Slide 44: Strategic priorities
STRATEGIC PRIORITIES > Further adaptation of CVP and assortment Leadership in NPS and service level Improvement in operational efficiency, incl. shrinkage Decrease personnel turnover; improve loyalty Improve efficiency of regional model Roll-out of personalised promotions X5 RETAIL GROUP 44
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Slide 46: X5: Leading and Evolving - Vladislav Kurbatov, Perekrestok
X9: LEADING AND EVOLVING Vladislav Kurbatov, General Director of Perekrestok X5 Capital Markets Day 2018 London, 25 October 2018 X65 RETAIL GROUP
Slide 47: Where we are: supermarkets
WHERE WE ARE > SUPERMARKETS SET TO STRENGTHEN AND CONSOLIDATE SUPERMARKET SEGMENT (RUB TN, INCL. VAT) es AN% Gen eke = 2017 Asn aa | 23% Le SHARE IN GROCERY Source: Infoline, X5 data KEY TRENDS * The segment accounts for 23% of the Russian food retail market ¢ Annual growth rate is expected at 4% th
Slide 48: Perekrestok today
PEREKRESTOK TODAY > RUSSIA'S #1 SUPERMARKET 712 stores as of 30 September 2018: 21.9% increase y-o-y ray, 3 2018 net retail sales: % FE RUB 53.2 bn, ts 25.5% increase y-o-y Share of X5's Q3 2018 sales: around 14% Average check: RUB 521 (9M 2018) 0) 0.6% decrease y-o-y THE MAIN SHOP IN EVERY NEIGHBOU
Slide 49: What we did: progress since last Capital Markets Day
WHAT WE DID > PROGRESS SINCE LAST CAPITAL MARKETS DAY CVP RAPID GROWTH OPERATIONAL EFFICIENCY PRIVATE LABEL OMNI- CHANNEL « Fine-tuned and localised assortment Improved service level. Growth of NPS from -8 for 9M 2016 to 14 for 9M 2018 ¢ Expansion and optimisation of fresh category and development o
Slide 50: Accelerating the speed of new openings
ACCELERATING THE SPEED OF NEW OPENINGS > cwapeanod <0 NEW OPENINGS +128 NEW oe +61 NEW ae +75 NEW eh +13 2017 fon 2017 |§ SM 2018 r-— 398 484 548 SELLING SPACE, TH. SQ. M Source: X5 data X65 RETAIL GROUP
Slide 51: Refurbishments
REFURBISHMENTS > THE PATH TO BETTER BRAND PERCEPTION REFURBISHMENT PROGRAMME DYNAMICS SHARE OF STORES OPERATING UNDER NEW CONCEPT 52% 39 83% 2017 9M 2018 Number of stores refurbished in 9M 2018 Share of stores under new concept as of 30 Sep 2018 Ayerage duration of store closure Average sales recove
Slide 52: Focus on CVP
FOCUS ON CVP > Introduced client-centric metrics (NPS) HQ to employee motivation programme Further adaptation of assortment o: Wy to differentiate from competition Expansion and optimisation of = fresh category, F&V, healthy food | (@) Private label and unique assortment eI Ready-to-eat category XS
Slide 53: Private label (1/2)
PRIVATE LABEL (1/2) > UPDATED DEVELOPMENT STRATEGY Organise regular tastings of assortment through short surveys to improve quality: ‘good/not good” Focus on improving the quality of products product withdrawal or rotation, price reduction, promo, change of packaging, benchmarking Constantly communi
Slide 54: Private label (2/2)
PRIVATE LABEL (2/2) > COVERING ALL PRICE SEGMENTS CROSS-CATEGORY CATEGORY BRANDS BRANDS Dairy Confectionary Healthy For kids < 3 HIGH AND ABOVE - ‘ years AVERAGE PRICE BEPXOBLe Dairy Rendy-to-ent & Homeware Ready-to-cook years MEDIUM PRICE AMAPEET J Confectionary Fish Beauty For kids 4-7 years é Hop
Slide 55: Improving operational efficiency
IMPROVING OPERATIONAL EFFICIENCY > REGIONAL MODEL LOGISTICS PERSONNEL INVENTORY EFFICIENCY What has been done * Store format determined by selling space and net retail sales * Tested stores with reduced opex * Reduced store opening capex Reduced cost per box ¢ Improved shelf availability * Developed
Slide 56: Perekrestok Online (1/2)
PEREKRESTOK ONLINE (1/2) > INCREASING SHARE OF WALLET * Since the launch of Perekrestok Online, average net retail sales per omni-channel customer (online + offline) have increased by 70% in Moscow * Average NPS of Perekrestok Online in Q3 2018 reached over 80%, significantly exceeding the planned s
Slide 57: Perekrestok Online (2/2)
PEREKRESTOK ONLINE (2/2) > STRATEGIC PRIORITIES INCREASE THE NUMBER OF HOUSEHOLDS IN THE CUSTOMER BASE TO 1.5 MLN IN MOSCOW AND ST PETERSBURG BY 2020 KEY INITIATIVES Extending assortment to around 50,000 SKUs ASSORTMENT — « Extending assortment to Karusel’s level of 25,000 SKUs + adding partners’ as
Slide 58: Loyalty programme
LOYALTY PROGRAMME » CURRENT RESULTS AND OUTLOOK AVERAGE TICKET 706 : a AVERAGE CUSTOMER ~~ LOYAL CUSTOMER LOYALTY CARD PENETRATION ACTIVE CARDS, MLN TURNOVER PENETRATION CURRENT LEVEL 2020F CURRENT LEVEL 2020F 2.4 WILN MOBILE APP DOWNLOADS )X5 RETAIL GROUP 58
Slide 59: Kitchen factory
KITCHEN FACTORY > Xe O~ KEY HIGHLIGHTS ¢ Ultra-fresh and ready-to-eat products + To be launched in H1 2019 ¢ Target output: 120 tonnes per day ¢ +800 new SKUs to Perekrestok's product range X65 RETAIL GROUP 59
Slide 60: Strategic priorities
STRATEGIC PRIORITIES > Focus on fresh, F &V, ready-to-eat Comfort and positive emotions from shopping Omni-channel Best-in-class service, further increase of NPS Targeted loyalty system and personalised promo SOGSac Chain expansion with aim of being closer to the customer X65 RETAIL GROUP 60
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Slide 62: X5: Leading and Evolving - Maksym Gatsuts, Karusel
X9: LEADING AND EVOLVING Maksym Gatsuts, General Director of Karusel X5 Capital Markets Day 2018 London, 25 October 2018 X65 RETAIL GROUP
Slide 63: Where we are: hypermarkets
WHERE WE ARE © STABLE GROWTH RATES IN HYPERMARKETS HYPERMARKET SEGMENT (RUB TN, INCL. VAT) CAGR 5. SE SHARE IN GROCERY Source: Infoline, X5 analysis o KEY TRENDS ¢ The segment accounts for 14% of Russia's food retail market * Growth rate is expected to remain stable ¢ Competitive landscape is intens
Slide 64: Karusel today
KARUSEL TODAY > HIGHLIGHTS 92 stores as of 30 September 2018: 1.1% increase y-o-y RUB 20.6 bn, 0.3% decrease y-o-y Share of X5's Q3 2018 sales: around 6% Average check: RUB 746 (Q3 2018) 2.7% increase y-o-y Q3 2018 net retail sales: 382 th. sq. m of selling space as of 30 September 2018, 0.4% increa
Slide 65: We aim for leadership in customers' minds
WE AIM FOR LEADERSHIP IN CUSTOMERS’ MINDS > WHICH WILL LEAD TO GROWTH IN SALES DENSITY SALES DENSITIES OF RUSSIAN HYPERMARKETS (RUB ‘000 PER SQ. M. PER YEAR) +19 | ry) | Yl 229 210 03 2016 Q3 2017 Source: Companies data, Infoline +55 UPSIDE POTENTIAL! Q3 2018 )X5 RETAIL GROUP
Slide 66: What we did: progress since last Capital Markets Day
WHAT WE DID > PROGRESS SINCE LAST CAPITAL MARKETS DAY « New CVP approved, including new concept and branding CVP « Launch of updated refurbishment programme in line with new CVP ¢ Assortment renewed with focus on modern trends, healthy food, Food-to-Go ¢ Standard business processes implemented acros
Slide 67: New CVP and branding
NEW CVP AND BRANDING > FANEPMAPKET y runepmapkert PE KAPYCEAG ™& KAPYCEJIb REBRANDING KEY HIGHLIGHTS « Focus on stability, order and ¢ 4,000-4,500 sq m hypermarkets in prime locations structure ¢ 20,000 to 22,000 PLUs, with an increased focus on ¢ Meant to be associated with first-price and mid-pric
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Slide 69: New CVP: assortment
NEW CVP: ASSORTMENT > AWN NU, fo Focus on assortment innovation, opening up niche lines within traditional categories, development of healthy food, bio, organic, crafted offerings Increase assortment in fresh categories and further development of own production range Focus on creating “category worl
Slide 70: Own production
OWN PRODUCTION > MODERN HEALTHY FOOD FOR ALL OCCASIONS ASSORTMENT EFFICIENCY NEW OWN PRODUCTION STRATEGY FOCUSES ON DIFFERENTIATION What has been done * Completed renewal of assortment with focus on modern trends, healthy food, food-to-go « Revised pricing policies ¢ Optimised staff structure ¢ Impr
Slide 71: Private label
PRIVATE LABEL > TAILORED TO CUSTOMER NEEDS IN ALL SEGMENTS KARUSEL'S PRIVATE LABEL STRATEGY » Adapt to the needs of the target audience ; . » Focus on large purchases for future use Increasing margins * Positive price perception contributes to NPS of private label + Differentiate from other brands t
Slide 72: Pricing, omni-channel and digital innovations
PRICING, OMNI-CHANNEL AND DIGITAL INNOVATIONS > ¢ Roll-out of new pricing model that will significantly improve customer price perception PRICING * Improve promo efficiency, reducing share of promo while increasing traffic Increase penetration of loyalty cards to above 90% in 2019 * Started cooperat
Slide 73: Focus on people and processes
FOCUS ON PEOPLE AND PROCESSES > KEY TO SUSTAINABLE GROWTH What has been done Our plans ¢ Programme for learning and development PERSONNEL for high potential employees * HR brand project launched Initiatives to improve staff engagement Improve motivation system Improve work conditions ¢ Business proc
Slide 74: Strategic priorities
STRATEGIC PRIORITIES > | Ea | fe Further adapt assortment Improve price perception Increase share of private label Improve personnel engagement Expand omni-channel offering & digital innovations Reduce lease costs, shrinkage and increase operational efficiency Gradually renovate stores using new bra
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Slide 76: X5: Leading and Evolving - Vadim Kapustin, Strategy
X9: LEADING AND EVOLVING Vadim Kapustin, Director of Strategy X5 Capital Markets Day 2018 London, 25 October 2018 X65 RETAIL GROUP
Slide 77: Changing consumer behavior
Changing « consumer behavior X65 RETAIL GROUP 77
Slide 78: And X5 is responding to new trends: strengthen the current business
AND X5 IS RESPONDING TO NEW TRENDS | 1 STRENGTHEN THE CURRENT BUSINESS 78
Slide 79: Understanding our customer - big data capabilities
UNDERSTANDING OUR CUSTOMER - BIG DATA CAPABILITIES > a IT = DATA SCIENCE =" CLUSTER METHODS 79
Slide 80: Big data is primarily leveraged to drive business operations improvements
BIG DATA IS PRIMARILY LEVERAGED TO DRIVE BUSINESS OPERATIONS IMPROVEMENTS X5 RETAIL GROUP 80
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