OREANDA-NEWS. January 27, 2010. X5 Retail Group N.V., Russia's largest retailer in terms of revenue (LSE ticker: “FIVE”), announced its retail sales and operational performance for the quarter and year ended 31 December 2009.

Q4 2009 Highlights

FY 2009 Highlights

Net retail sales increased 23% year-on-year in RUR terms to RUR 78,567 mln or 11% in USD terms to USD 2,621 mln (incl. RUR devaluation effect of approximately 12%);

X5’s LFL sales grew 7% in RUR terms year-on-year, supported by 5% traffic year-on-year, supported by 5% traffic growth;

Discounters’ customer traffic surged 12%, resulting in a 16% year-on-year increase in Pyaterochka's LFL sales;

155 stores (100 thousand sq.m. of selling space) were added on a net basis, including the acquisition of 82 Paterson stores (63 thousand sq.m.);

Consolidated(3) net retail sales increased 33% year-on-year in RUR terms to RUR 275,183 mln or 4% in USD terms to USD 8,675 mln;

On a pro-forma(2) basis, net retail sales grew 25% year-on-year in RUR terms and declined 2% in USD terms (incl. RUR devaluation effect of approximately 27%);

X5’s LFL sales grew 10% in RUR terms year-on-year on the back of 5% traffic growth;

271 stores (189 thousand sq.m. of selling space) were added on a net basis, including the acquisition of Paterson;

Total warehouse space increased by 118 thousand sq. m. on a net basis;

At 31 December 2009 X5 operated 1,372 stores (1,063 thousand sq.m. in selling space), including 1,039 discounters, 275 supermarkets and 58 hypermarkets;

The Company had 23 DCs at year-end (309 thousand sq.m in warehouse space), delivering a supply centralisation rate of 61%.

2010 Outlook

• Assuming stabilisation of the macro-economic environment, in 2010 X5 expects to deliver net sales growth comparable to 2009 pro-forma level(5). Actual top line performance will depend on inflationary trends and the timing of a recovery in the consumer spending;

• X5 confirms its expansion and CapEx outlook for 2010 as announced on 30 November 2009:

- Net new store additions:

�� Hypermarkets - 7-10 stores,

�� Supermarkets - approximately 15 stores,

�� Discounters - 200-250 stores;

- Capital expenditures of up to RUR 18 bln.

(1) Numbers provided in this press-release are preliminary and unaudited.

(2) Including Karusel's business on pro-forma basis, i.e. from 1 January 2008. Acquired Paterson stores' results are included only for December 2009.

(3) Including acquired Karusel’s business and acquired Paterson's business on consolidation basis, i.e. from 30 June 2008 and from 1 December 2009, respectively, when the acquisitions were completed.

(4) Including 82 acquired Paterson stores (63 thousand sq.m. of selling space).

(5) Including Paterson for December in 2009 and for full year in 2010

Lev Khasis, X5 Retail Group CEO, commented: "X5 met its 25% revenue growth target for 2009 and delivered the highest like-for-like sales increases of any Russian retailer. With many retailers weakened by the economic downturn, X5 responded aggressively to win customers with superior offerings and strengthen its leadership in all regions of operations.

"Fourth quarter trading results were strong despite trading down by consumers, thanks particularly to targeted New Year’s and Christmas promotions in December and continued focus on price and assortment. We clearly benefited from our multi-format strategy and the phenomenal customer appeal of discounters.

"We also took advantage of weaker market conditions in 2009 to accelerate new store openings well in excess of plan and acquire assets at attractive prices – while staying within our disciplined investment limit. X5 also made great progress in developing logistics infrastructure to enhance operational efficiency and competitiveness. We secured at least one distribution centre in each region of our operations and achieved a supply centralisation rate of 61%, substantially exceeding our target of 57% for 2009, and we now expect further improvement to 67% in 2010.

"The new retail law that comes into effect in February 2010 creates certain restrictions for modern retailers in terms of expansion. The impact on X5, however, will be limited to St. Petersburg, where we are by far the market leader. We will continue to deliver strong growth through like-for-like sales increases and new store openings, with plans for stepped-up organic expansion in 2010. We believe the new supplier relationship rules restrict suppliers rather than retailers in their ability to promote goods, and X5 will continue to focus on giving customers superior value and assortment to outperform the competition.

"We are encouraged by the latest upturn in Rostat’s consumer confidence index. The Company begins 2010 in an excellent position to drive growth and efficiency while benefiting from future economic recovery."