OREANDA-NEWS. April 26, 2010. X5 Retail Group N.V., Russia's largest retailer in terms of sales (LSE ticker: “FIVE”), announced its audited IFRS results for the year ended 31 December 2009.

Q4 2009 Highlights

• Net sales increased 23% year-on-year in  RUR terms to RUR 79,016 mln or 11% in  USD terms to USD 2,636 mln (incl. RUR  devaluation effect of approximately 12%);

 • Gross profit totaled USD 627 mln, for a gross margin of 23.8%;

• SG&A expenses before D&A(3), as percent of sales, declined by 60 bp year-on-year to 16.4%. Net of ESOP, this item declined by 180 bp year-on-year to 15.3% of sales;

• EBITDA amounted to USD 227 mln, for an EBITDA margin of 8.6%, including ESOP  cost of USD 28 mln;

• X5 reported a net profit of USD 44 mln.

FY 2009 Highlights

• Consolidated(1) net sales increased 33% year-on-year in RUR terms to RUR 276,543 mln and 4% in USD terms to USD 8,717 mln;

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

• Gross profit totaled USD 2,108 mln, for a gross margin of 24.2%; • SG&A expenses before D&A(3), as percent of sales, declined by almost 90 bp year-on-year to 16.9%. Net of ESOP, this item declined by 160 bp year-on-year to 16.2% of sales;

• EBITDA amounted to USD 736 mln, for an EBITDA margin of 8.4%, including ESOP cost of USD 59 mln;

• X5 reported a net profit of USD 165 mln.

• In 2009 the Company generated USD 734 mln as cash flow from operating activities;

• Net debt decreased by USD 250 mln, for net debt/EBITDA of 2.08x as at 31 December 2009.

(1) Consolidated sales figures for 2008 include the results of the acquired Karusel’s business as from 30 June 2008.

Acquired Paterson stores' results are included only for December 2009.

(2) Pro-forma sales figures for 2008 include acquired Karusel’s business from 1 January 2008. Acquired Paterson stores' results are included only for December 2009.

(3) D&A stands for depreciation & amortization. D&A for Q4 & FY 2009 includes one-off non-cash impairment charge.

X5 Retail Group CEO Lev Khasis commented:

"2009 was a tough year for Russian consumers and the economy as a whole. X5’s response was fast and effective. We won customers by making sure we had the right products at the most attractive prices. As a result, we met our 25% pro forma revenue growth target for 2009 and posted a 10% increase in like-for-like sales, the highest of any Russian retailer."

"Just as important, we kept our focus on X5’s strategy to create durable competitive advantages and strengthen our platform for growth and productivity to capitalize on the Russian market’s potential. We are building on this with continued priorities for driving customer focus, operational excellence and disciplined growth. For 2010, we expect to step up store expansion and infrastructure development with investments of up to RUR 18 billion. I am confident that X5 is in an excellent position to drive growth and efficiency this year while positioning the Company to benefit from future economic recovery."

X5 Retail Group CFO Evgeny Kornilov added: "Our customer success, price leadership and profitability are enabled by continuous gains in efficiency. In 2009 we drove a dramatic 160 basis point improvement in X5’s key performance indicator for cost control, SG&A before D&A and ESOP as a percent of sales. We believe efficiency will be even more important for sustaining leadership and shareholder returns as the market develops, and in 2009 we launched our Strategic Efficiency Program to take X5’s operational excellence to the next level. The crisis conditions of 2009 were a successful test of X5’s financial strength. X5 generated a record USD 734 mln in operating cash flow thanks to strong operational performance and efficient working capital management. This, helped by prudent liquidity management and improved efficiency of investments, enabled net debt reduction by USD 250 mln year-on-year. We also secured resources to refinance the Company’s USD 1.1 bln syndicated loan due in December 2010 with the view to improve our debt maturity profile and minimize currency exposure. We continue to prioritize investments that offer the best returns, while increasing cash flows and strengthening our balance sheet to ensure flexibility in defining strategic goals and supporting growth in the years to come."