X5 Retail Regulatory News (FIVE)

18 Jun 2008 07:00



X5 CONTINUES TO IMPLEMENT ITS STRATEGY 

OF FRANCHISEE PROGRAM DEVELOPMENT 

Amsterdam, 18 June 2008 - X5 Retail Group N.V. ("X5" or the "Company"), Russia's largest food retailer in terms of sales (LSE ticker: "FIVE"), announces that it has increased its stake in Pyaterochka store chain in Urals and signed a new franchising agreement to begin roll-out of Pyaterochka stores in Ivanovo and Kostroma regions.

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For Information:

In accordance with franchising agreements, X5 Retail Group provides its counterparties with, among other things, the right to use its brand name, brand book, business development & operational know-how, as well as software. In its turn, franchising counterparties make an advance payment for exclusivity rights and then pay to the Company a monthly royalty fee for the use of the brand name and management processes.

Please note that X5 does not consolidate its franchisees' store sales, while royalty fees from franchisees are reported as other revenue. The number of franchisees' stores is also reported separately from Company-managed stores.

Note to Editors:

X5 Retail Group N.V. is Russia's largest food retailer in terms of sales. The Company was created as a result of a merger between Pyaterochka (soft discounter chain) and Perekrestok (supermarket chain) on 18 May 2006.

As of 31 March 2008, X5 had 731 Company managed soft discount stores located in Moscow (321), St. Petersburg (249) and other Russian areas (161), 183 Company managed supermarkets across Central Russia and Ukraine, including 108 stores in Moscow (Moscow region and Yaroslavl region), and 16 Company managed hypermarkets.

As of 31 March 2008, X5's franchisees operated 711 stores across Russia and Kazakhstan.

X5's net sales for the full year 2007 reached USD 5,320 mln, an increase of 53% year-on-year. Gross profit for the period totaled USD 1,404 mln, EBITDA amounted to USD 479 mln. Full year 2007 net income reached USD 144 mln.

X5 Retail Group N.V.'s net sales for the first quarter 2008 surged 61% in USD terms and reached USD 1,786 mln.  Gross profit for the period totaled USD 458 mln, EBITDA amounted to USD 161 mln, net profit - to USD 86 mln. 

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.