X5 reports Q4 2013 operational results

X5 Retail Group REPORTS Q4 & FY 2013 Trading Results (1)

Amsterdam, 23 January 2014 - X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer (LSE ticker: "FIVE"), announced today the Company's preliminary consolidated operational results and net retail sales for the fourth quarter (Q4) and full year (FY) of 2013.

· FY 2013 net selling space increased by 12.9%, year-on-year (y-o-y); and

· Q4 and FY 2013 net Russian Rouble (RUR) retail sales increased y-o-y by 11.9% and 8.7%, respectively.

Expansion Dynamics (2)  

Selling space and # of stores by format

Selling space and # of stores added by format

Regional contribution to net selling space added by format in 2013, %

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(1) Numbers in this press release are preliminary and have not been reviewed or audited by the Company's auditor.

(2) Note that in the text and other tables of this press release, immaterial deviations in calculation of % change, subtotals and totals are explained by rounding.

(3) Refers to Perekrestok Express and Kopeika branded convenience stores; previously disclosed as Convenience stores.

(4) Regional contributions to net selling space and net sales are impacted by the redrawing of the Central, North-West, and "Other" regions' boundaries for the Pyaterochka store base due to the new "cluster" based operational model. Year-on-year comparisons have been adjusted to reflect the new boundaries.

In Q4 2013, X5 closed six Pyaterochka and two Perekrestok stores. In FY 2013, X5 closed 34 Pyaterochka stores, eight Perekrestok supermarkets, two Karusel hypermarkets and 19 Express stores. Stores closed in both periods did not meet the respective formats' efficiency criteria.

Net Retail Sales (1) Performance

Net RUR retail sales by format, million (mln)

Regional contribution to net RUR retail sales by format, %

Q4 2013 monthly net RUR retail sales by format, % change y-o-y

Average Ticket and Number of Customer Visits

Q4 & FY 2013 average ticket and customer visits by format

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 (1) Net retail sales represent revenue from operations of X5 managed stores net of VAT. This number differs from total net sales that also include revenue from direct franchisees (royalty payments) and other revenue. The total net sales number will be reported as part of Q4 & FY 2013 financial results.

Q4 2013 average monthly ticket and customer visits by format, % change y-o-y

LFL Sales Performance

Q4 & FY 2013 LFL (1) store performance by format, %

Q4 2013 monthly LFL store performance by format, %

Key Drivers for Q4 2013 Results

Expansion: Primarily organic growth in current regions of presence.

Retail & LFL sales:

· selling space expansion and the positive performance of maturing stores added over the past two years;

· improvement in volume and quality of promotional and marketing activities;

· assortment rotation and expansion (especially at Pyaterochka and Karusel); and

· improvement in product shelf availability (especially in December).

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(1) LFL comparisons of retail sales between two periods are comparisons of retail sales in local currency (including VAT) generated by the relevant stores. The stores that are included in LFL comparisons are those that have operated for at least twelve full months preceding the beginning of the last month of the reporting period. Their sales are included in LFL calculation starting from the day of the store's opening. We include all stores that fit our LFL criteria in each reporting period.

 X5 Retail Group CEO Stephan DuCharme commented:

"I am pleased with the way we finished 2013 and the solid revenue growth we achieved in the last three months of the year. These results were underpinned by improved LFL sales across all banners and reflect the investments we have made into our customers, stores and people as well as our preparedness for the traditional retail high season.

The fourth quarter provides momentum going into 2014, however with signs that consumer confidence may be ebbing we need to continue executing on many fronts to complete the turnaround in our operations.

We have set an ambitious program for 2014 that includes the separation of our supply chain services and infrastructure, the continued roll-out of our new Pyaterochka concept including a significant store refurbishment program and the introduction of category management principles at our larger Perekrestok and Karusel banners. We will also continue to expand our store base to support revenue growth and strengthen our position in current regions of presence.

We have made significant progress in 2013 in strengthening our team, our operations and our multi-format operating model, which gives me confidence that we are on the right path and can deliver the results our customers and shareholders expect."

2014 Financial Calendar

Note to Editors:

X5 Retail Group N.V. (LSE: FIVE, Moody's - "B2", S&P - "B+") is a leading Russian food retailer. The Company operates several retail formats: the soft discounter chain under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand, the online retail channel under the E5.RU brand and Express convenience stores under various brands.

At 31 December 2013, X5 had 4,544 Company-operated stores. It has the leading market position in both Moscow and St. Petersburg and a significant presence in the European part of Russia. Its store base includes 3,882 Pyaterochka soft discounter stores, 390 Perekrestok supermarkets, 83 Karusel hypermarkets and 189 convenience stores. The Company operates 32 DCs and 1,848 Company-owned trucks across the Russian Federation.

For the full year 2012, net sales totaled USD 15,795 mln, EBITDA reached USD 1,124 mln, and net loss amounted to USD 126 mln. For the nine months of 2013, net sales totaled USD 12,152 mln, EBITDA reached USD 856 mln and net profit amounted to USD 209 mln.

X5's Shareholder structure is as follows: Alfa Group - 47.86%, founders of Pyaterochka - 16.35%, X5 Directors - 0.02%, treasury shares - 0.07%, free float - 35.70%.

Forward looking statements:

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal", "believe", or other words of similar meaning.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond X5 Retail Group N.V.'s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements.

Any forward-looking statements made by or on behalf of X5 Retail Group N.V. speak only as at the date of this announcement. Save as required by any applicable laws or regulations, X5 Retail Group N.V. undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events or circumstances after the date of this document.