X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — FY2009 Earnings Presentation
25 slides from X5 Corporate Center's earnings presentation, Apr 15, 2010
Slide 1: FY 2009 Operational & Financial Results; Q1 2010 Operational Performance
FY 2009 Operational & Financial Results Q1 2010 Operational Performance Conference Call Presentation Moscow, 15 April 2010 p. 1
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 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
Slide 3: Agenda
Agenda I. 2009 Highlights II. FY 2009 & Q1 2010 Operational Performance III. Strategic Review IV. FY 2009 Financial Performance V. 2010 Outlook p. 3
Slide 4: 2009 Highlights
2009 Highlights … 2009 Conditions Were a Successful Test of X5’s Strength and Endurance • Strengthened position as #1 retailer in Russia • Won customers thanks to “close-to-the-customer” approach Strategic Strategic Progress, Progress, • Expanded selling space well in excess of plan, while staying w
Slide 5: Agenda
Agenda I. 2009 Highlights II. FY 2009 & Q1 2010 Operational Performance III. Strategic Review IV. FY 2009 Financial Performance V. 2010 Outlook p. 5
Slide 6: Throughout 2009 X5 Delivered Industry-Beating Operational Performance
Throughout 2009 X5 Delivered… … Industry-Beating Operational Performance Despite Trading Down Trends • Pro-forma sales growth of 25% in RUR terms, 2009 LFL Performance by Format consolidated sales growth of 33% in RUR terms Traffic Basket Based on RUR- +17% denominated gross sales • Phenomenal succe
Slide 7: Q1 2010 Operational Performance
Q1 2010 Operational Performance… … Was Solid Against Still Weak Consumer Spending & Dramatically Lower Food Inflation • 20% net retail sales growth in RUR against a backdrop Q1 2010 Net Retail Sales of weak consumer spending…. RUR bln • …and drastically lower food inflation in Russia: 4.8% in +20% M
Slide 8: Q1 2010 LFL Results
Q1 2010 LFL Results… … Led by Powerful Performance at Discounters with Basket Significantly Above Internal Inflation (1.6%) Supermarkets’ Q1 2010 LFL Performance • X5’s LFL sales growth stable at 7% Based on RUR- quarter-on-quarter denominated gross sales Traffic Basket • Soft discounters continued
Slide 9: X5's LFL Performance
X5’s LFL Performance… …Has Demonstrated Strong Resilience Since Economic Downturn X5 LFL Performance Quarterly LFL Sales Growth 25% X5 total X5 Discounters 20% 18% 17% 17% 16% 16% 15% 13% 11% 10% 8% 7% 7% 5% 0% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 p. 9
Slide 10: Selling Space Expansion in 2009 & Q1'10
Selling Space Expansion in 2009&Q1‘10 Selective and Efficient New Store Openings In 2009 X5 substantially exceeded its initial expansion Number Of Stores, EoP plan, while staying well within CapEx limit 1,600 58 60 •Net 271 stores or 189 th. sq.m. of selling space added : 1,400 46 –Organically X5 ad
Slide 11: X5's Regional Presence
X5’s Regional Presence Further Strengthened Presence in the Regions North-West region Moscow & the Region • Increased share of regional sales from 19% in Net Retail Sales 2009: Net Retail Sales 2009: 2008 to 21.6% in Q1 2010 with regions USD 2,433mln USD 4,460mln Breakdown: Breakdown: accounting for
Slide 12: Paterson Acquisition
Paterson Acquisition Excellent Value & Fit Reinforces X5 positions in supermarkets, securing high quality locations in key geographies Strategic & Most stores fully compatible with X5’s requirements both operationally and geographically… Operational Fit …offering opportunity of leverage X5’s o
Slide 13: Agenda
Agenda I. 2009 Highlights II. FY 2009 & Q1 2010 Operational Performance III. Strategic Review IV. FY 2009 Financial Performance V. 2010 Outlook p. 13
Slide 14: Strategic Efficiency Program
Strategic Efficiency Program… …Impacts Every Area of X5’s Business, to Create New Competitive Advantages Support of Working Long-Term Sales Cost Capital Scalable Growth Savings Project Improvement Expansion Efficient Supply Chain Management IT Systems Integration Business Processes Improvement Labou
Slide 15: Distribution Infrastructure
Distribution Infrastructure Supply Centralization Rate Rose From 51% to 61% by Year-End 2009, Well Ahead of Target Region # of DCs 000 sq. m. Dry Fruit & Veg Fresh Frozen Non-Food Central 7 128.4 v v v v DC locations as at North-West 5 65.1 v v v v 31 March 2010 Volgo-Vyatsky 1 17.5 v v v Urals 4 21
Slide 16: IT Systems Transformation
IT Systems Transformation Operational Excellence in Our Business Management Platforms 2012 IT SAP Implementation in line with initial schedule Infrastructure SAP for Retail 9 Successfully launched in a pilot region Stores in 2009 9 X5 earned SAP’s #1 ranking for “Highest Own HR Management Quality SA
Slide 17: X5's Strategic Efficiency Program
X5’s Strategic Efficiency Program…. …is a Multi-Year Effort But We Are Already Delivering Results SG&A(1) as % of Sales 18.3% 18.1% 18.0% 18.0% 17.2% 17.2% 17.0% 17.0% 16.4% Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 (1) Excluding Depreciation and Amortization and one-off non-cash items p
Slide 18: Agenda
Agenda I. 2009 Highlights II. FY 2009 & Q1 2010 Operational Performance III. Strategic Review IV. FY 2009 Financial Performance V. 2010 Outlook p. 18
Slide 19: FY 2009 Financial Performance
FY 2009 Financial Performance(1) Net Sales EBITDA & EBITDA Margin USD mln EBITDA, USD mln - 2% EBITDA Margin, % 8,892 8,717 9.0% 8.4% 803 736 -8% FY 2008 FY 2009 FY 2008 FY 2009 Gross Profit Net Profit / (Loss)(2) Gross Profit, USD mln Net Profit, USD mln 1.9% Gross Margin, % Net Margin, % 25.6% 165
Slide 20: FY 2009 P&L Highlights
FY 2009 P&L Highlights(1) USD mln FY 2009 FY 2008 % change % change y-o-y, USD y-o-y, RUR Net Sales 8,717.4 8,892.4 (2%) 25% incl. Retail 8,674.5 8,843.8 (2%) 25% Gross Profit 2,107.9 2,278.5 (7%) 18% Gross Margin, % 24.2% 25.6% SG&A (excl. D&A) (1,472.4) (1,578.0) (7%) 19% % of revenue 16.9% 17.8%
Slide 21: Key 2009 P&L Developments
Key 2009 P&L Developments Full year 2009 gross margin totaled 24.2% compared to 25.6% in 2008 - a year-on-year gross margin investment of 140 bp in line with management's expectations. Full year 2009 SG&A expenses decreased as a percentage of revenue by 60 bp year-on-year to 20.0% SG&A expense
Slide 22: FY 2009 Cash Flow Highlights
FY 2009 Cash Flow Highlights USD 734 mln in Operating Cash Flow Thanks to Strong Operational Results, Cost Controls and Efficient Working Capital Management % change % change USD mln FY 2009 FY 2008 USD RUR Net Cash Flows from Operating Activities 733.7 629.3 17% 48% Net Cash from Operating Activiti
Slide 23: Debt Financing and Liquidity
Debt Financing and Liquidity Highlights Debt Maturity Profile as at 31.12.09 At 31-Dec-09, total debt amounted to USD 1,944 mln, net debt USD mln totaled USD 1,532 mln - a yoy reduction of USD 250 mln or 14%. X5's short-term debt increased from USD 578 mln as at 31 1,656.6 December 2008 to USD 1
Slide 24: Agenda
Agenda I. 2009 Highlights II. FY 2009 & Q1 2010 Operational Performance III. Strategic Review IV. FY 2009 Financial Performance V. 2010 Outlook p. 24
Slide 25: 2010 – Stepped Up New Store Openings
2010 – Stepped Up New Store Openings 2010 Outlook • Net new store addition: -Hypermarkets: 7-10 stores; -Supermarkets: ~15 stores; -Discounters: 200-250 stores. • Capital Expenditures of up to RUR 18 bln • Assuming stabilisation of the macro-economic environment, in 2010 X5 expects to deliver net sa