REG - X5 Retail Group N.V - X5 signs agreement to enter the Russian Far East

X5 Retail NVAnnouncement

06/09/2022 07:45

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RNS Number : 4020Y  X5 Retail Group N.V.  06 September 2022

 

X5 SIGNS AGREEMENT TO ENTER THE RUSSIAN FAR EAST

Vladivostok, 6 September 2022 - X5 Group ("X5" or the "Company", LSE and
MOEX ticker: FIVE), a leading Russian food retailer, signed a cooperation
agreement with Russian Far East and Arctic Development Corporation (RFEADC) to
launch operations in Russia's Far Eastern Federal District. With this move,
the parties agreed to join efforts in developing the food market of the
Russian Far East.

The agreement was signed by RFEADC CEO Nikolay Zapryagaev and X5 Group
President Ekaterina Lobacheva on the sidelines of the 7(th) Eastern Economic
Forum (EEF), which is taking place in Vladivostok on 5-8 September 2022. The
signing was attended by Yury Trutnev, Russian Deputy Prime Minister and
Presidential Plenipotentiary Envoy to the Far Eastern Federal District, and
Alexei Chekunkov, Russian Minister for the Development of the Far East and the
Arctic.

"I think such projects are very important because they not only create
opportunities to bring products to the Far Eastern territories and help reduce
prices, but they also provide additional opportunities for Far Eastern
agrarians by forming new sales channels. This creates the foundation for
increasing production and developing new crop areas, because when people
understand that their products are in demand, they can produce more
agricultural goods," Yury Trutnev noted.

"Our priority task is to improve the quality of life for people in the Far
East. The scale of the federal network, combined with the existing mechanisms
of state support in the region, will make it possible to build optimal
logistics, expand the range of products, and make them more accessible to
people. Partnerships with Asian networks can provide an additional synergetic
effect," said Alexei Chekunkov.

As part of the partnership, X5 and RFEADC will develop an action plan for X5
to enter the Far Eastern Federal District, including identifying requirements
for the respective infrastructure (including energy usage, land plots for
distribution centres) and logistics development (railway and motor transport
access). X5 will carry out a comprehensive analysis to review the
opportunities for rolling out a modern retail chain in the region. The
Company's potential investment to build distribution centres and stores in the
region may reach RUB 10 billion.

"The agreement with the Russian Far East and Arctic Development Corporation marks the launch of a large-scale project for X5 to expand its geography and enter the market of the Russian Far East. Together, we will assess local infrastructure needs and search for land plots to accommodate our logistics centres, and will then decide on the appropriate investment," said Ekaterina Lobacheva, President of X5 Group.

According to RFEADC CEO Nikolai Zapryagaev, the corporation will assist X5
with selecting land plots for infrastructure development, as well as help
secure the Company's status as a resident of a territory of advanced social
and economic development, which carries administrative and tax benefits.

X5 plans to complete its expert assessment of the Russian Far East territories
and infrastructure by Q1 2023, after which the Company will consider building
a distribution centre in the region as part of the project.

 

 

Note to Editors:

X5 Retail Group N.V. (LSE and MOEX: FIVE; Expert RA: ruAAA) is a leading
Russian food retailer. The Company operates proximity stores under the
Pyaterochka brand, Perekrestok supermarkets and Chizhik hard discounters. X5
provides an omnichannel experience to its customers, integrating retail stores
and e-commerce through its businesses Vprok.ru, 5Post and Mnogo Lososya.

As of 30 June 2022, X5 had 19,779 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 18,558 Pyaterochka
proximity stores, 986 Perekrestok supermarkets and 153 Chizhik hard
discounters. The Company operates 48 DCs and 4,347 Company-owned trucks across
the Russian Federation.

X5 is one of the largest employers in Russia. The Company employs over 325
thousand people.

For the full year 2021, revenue totalled RUB 2,204,819 million (USD 29,935
million*), EBITDA pre-IFRS 16 reached RUB 161,024 million (USD 2,186
million*), and net profit pre-IFRS 16 for the period amounted to RUB 48,513
million (USD 659 million*). In H1 2022, revenue totalled RUB 1,252,180 million
(USD 16,412 million**), adjusted EBITDA pre-IFRS 16 reached RUB 104,909
million (USD 1,375 million**), and net profit pre-IFRS 16 amounted to RUB
33,731 million (USD 399 million**).

 

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 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 Group N.V. speak
only as of the date of this announcement. Save as required by any applicable
laws or regulations, X5 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.

* FX rate: 73.6541 USD/RUB

** FX rate: 76.2975 USD/RUB

 

 For further details please contact:
 Varvara Kiseleva                                                 Maria Yazeva

 Head of Corporate Finance and IR                                 Investor Relations Officer

 Tel.: +7 (495) 662-88-88 ext. 27-300                             Tel.: +7 (495) 662-88-88 ext. 13-147

 e-mail: Varvara.Kiseleva@x5.ru (mailto:Varvara.Kiseleva@x5.ru)   e-mail: Maria.Yazeva@x5.ru (mailto:Maria.Yazeva@x5.ru)

 

 

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