X5 Retail Regulatory News (FIVE)

19 Jul 2007 07:01

X5 Retail Group N.V.19 July 2007 X5 Retail group MOODY'S CHANGES OUTLOOK TO POSITIVE Amsterdam, 19 July 2007 - Moody's Investors Service today changed the outlook onthe B1 corporate family rating of X5 Retail Group N.V. (LSE:FIVE), Russia'sleading food retailer in terms of sales, to positive from stable. The change in outlook recognises: o X5's strengthened positions in the Russian food retail market as reflected in the company's 2006 strong operating results, following the swift execution of the merger last year of Perekrestok and Pyaterochka o its improved ability to benefit from this rapidly growing market o the company's intention to de-leverage its business starting from this year as planned In its report Moody's stated "X5's ambitious growth plans should strengthen itsleading position in the discount and supermarket markets amidst a still veryfragmented Russian market. Given its strong positions in Moscow and St.Petersburg and good presence in promising regional markets supported by acompetitive product offering and a tightly controlled efficient supply chain,the company plans to grow without a significant deterioration in margins andincrease its operating cash flow generation ability." Moody's also states that further upward rating pressure could result from thecompany's ability to de-leverage its balance sheet while maintaining its plannedgrowth rate. Commenting on the Moody's report Vitaliy Podolskiy, Group CFO, said: "We are delighted to see another upgrade in our credit rating outlook. This isthe second upgrade in two weeks, following the recent announcement by Standard &Poor's. These ratings' reviews reflect our excellent operating results anddemonstrate the confidence of the investment community in the quality of ourmanagement in this period of rapid growth and change." - End - Enquiries to: X5 Retail Group N.V. Gennady Frolov Head of Corporate Communications Office +7 495 950 5577 ext. 10130 Mobile +7 495 998 3335 Email gennady.frolov@x5.ru Note to Editors: X5 Retail Group N.V. is Russia's largest food retailer in terms of sales. As of30 June 2007, the Group had 539 company-managed "Pyaterochka" soft discountstores located in the Moscow (241), St. Petersburg (223) and other Russian areas(75), and 170 company managed "Perekrestok" supermarkets across Central Russiaand Ukraine, including 98 stores in Moscow. As of 30 June 2007, franchisees operated 591 Pyaterochka branded stores acrossRussia and Kazakhstan. Perekrestok had 10 stores operated by franchisees in theMoscow area. Pyaterochka and Perekrestok have merged their operations as of 18 May 2006 tocreate the clear leader in the Russian food retail market. The Group's audited pro-forma net sales for the FY 2006 were US $3,551 million,up +50% vs. 2005. Pyaterochka chain provided US $1,973 million of net sales, thePerekrestok chain contributed US $1,496 million of net sales, and Merkado chaincontributed US $ 82 million. Forward looking statements: This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can beidentified by the fact that they do not only relate to historical or currentevents. 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 becausethey relate to future events and circumstances, a number of which are beyond X5Retail Group N.V.'s control. As a result, actual future results may differmaterially from the plans, goals and expectations set out in theseforward-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 anyapplicable laws or regulations, X5 Retail Group N.V. undertakes no obligationpublicly to release the results of any revisions to any forward-lookingstatements in this document that may occur due to any change in its expectationsor to reflect events or circumstances after the date of this document. This information is provided by RNS The company news service from the London Stock Exchange