X5 Retail Regulatory News (FIVE)

11 Oct 2007 07:20

X5 Retail Group N.V.11 October 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM AUSTRALIA, CANADA OR JAPAN 11 October 2007 X5 RETAIL GROUP N.V. Q3 2007 TRADING UPDATE GROUP LIKE-FOR-LIKE SALES UP +20% IN ROUBLE TERMS (26% IN US$ TERMS) APPROXIMATELLY 24,000 SQ.M. OF NET SELLING SPACE ADDED(1) GROUP IS SET TO EXCEED FULL YEAR US$ 5 BILLION NET SALES MILESTONE Amsterdam, 11 October 2007 - X5 Retail Group N.V., Russia's largest foodretailer in terms of sales (LSE ticker: "FIVE"), reports today a trading updateincluding store opening data and Like-for-Like ("LFL") sales trends by formatand region for Q3 2007. Expansion In Q3 2007, X5 Retail Group N.V. opened 43 new stores (including 37soft-discounters and 6 supermarkets) with total net selling space of 24 396 sq.m., of which 6,916 sq. m. in supermarket format and 17,480 sq. m. in discounterformat. Meantime, 3 non-format discounters with total net selling space of 448sq. m. in Cheliabinsk were closed under the planned post-acquisitionrestructuring plan. As of 30 September 2007, X5 Retail Group N.V. operated 749 company-managedstores (consisting of 573 soft discounters, 163 supermarkets and 13hypermarkets), with total net selling space of 540,276 sq. m. In the same period, X5's franchisees' store network increased by additional 26stores. As of 30 September 2007, franchisees operated 627 stores across Russiaand Kazakhstan in total. Q3 2007 store opening progress (net selling space, sq.m.)(2): Moscow Region(3) North-Western Other Regions Total Net Total Net Selling Total as of Region(4) and Ukraine Selling Space Space Increase, 30.09.2007 Increase, Q3 2007 9M 2007Format:Hypermarket - - - - 4,000 50,179Supermarket 2,432 1,270 3,214 6,916 12,847 175,654Discounter 8,140 5,660 3,232 17,032 57,293 314,443X5 1,572 6,930 6,446 23,948 74,140 540,276 (1) After deduction of net selling space of closed stores (2) After deduction of net selling space of closed stores. (3) Moscow region includes the City of Moscow, Moscow and Yaroslavl regions. (4) North-Western region includes City of St. Petersburg and Leningradskaya oblast(region) Andrei Rybakov, X5 Retail Group Head of Development commented: "During 9 months of 2007, we have added approximately half the targeted 150,000sq. m additional net selling space for 2007. Due to the traditional seasonalityof the store opening cycle in Russia, with a historical store openingconcentration in Q4, this result is expected and reproduces the store openingpattern of the past few years. For example in 2006, having added 65,000 sq. m.during the first 9 months, we exceeded our full year target of 120,000 sq. m. by6,000 sq. m.,. We have concluded contracts for all new store sites scheduled for the opening in2007. Our target of 150,000 sq. m. for the full 2007 year remains unchanged andwe are fully committed to meet it, while moving our focus on securing new sitesfor the coming year." Store Operations During Q3 2007, X5 Retail Group N.V. even enhanced already strong Like-for-Likesales1 performance of Q2 2007. LfL store sales trends: Q3 2007 vs Q3 2006, 9 months 2007 vs 9 months 2006: Q3 2007 Pro-forma 9 months 2007 Total LFL, Traffic, % Basket, % Total LFL, % Traffic, % Basket, % % Total X5 20 8 12 17 9 8Total Hypermarket 17 7 10 15 11 4Total Supermarket 21 10 11 18 13 5Total Discounter 20 7 13 17 7 10 Moscow Region2Total X5 25 11 14 22 13 9Hypermarket 6 (3) 9 10 4 6Supermarket 26 13 13 23 16 7Discounter 28 11 17 22 11 11 North-Western Region3Total X5 12 2 10 10 2 8Hypermarket - - - - - -Supermarket 14 7 7 18 14 4Discounter 11 1 10 10 2 8 Regions:Total X5 20 12 8 15 12 3Hypermarket 27 13 14 21 16 5Supermarket 10 5 5 5 5 0Discounter 48 23 25 42 20 22 1 In line with international reporting practice, Like-for-like (LFL) growthrepresents an increase in revenue of the LFL stores for a reporting period overcorresponding period in the prior year. LFL stores are defined as stores thathave operated for at least previous twelve full months, starting from the firstday of the month next to the month of the opening. Like-for-like revenue iscalculated on basis of the traffic and basket amounts of relevant stores in theperiod under review and is measured in the nominal Russian rouble terms,unadjusted for inflation. As of 30th September 2007, 8 hypermarkets, 124supermarkets and 441 discounters were included in LFL sales calculation 2 Moscow region includes the City of Moscow, Moscow and Yaroslavl regions. 3 North-Western region includes the City of St. Petersburg and Leningradskayaoblast (region) Antonio Melo, X5 Retail Group Chief Operating Officer, commented: "We succeeded in our effort to overcome the traditional summer slow-downpattern, and are pleased to demonstrate even stronger results vs. Q2, especiallyin our core Moscow market. Our operations in the regions outside Moscow and St.Petersburg, another geographical priority for the Group, also show outstandingimprovements, first of all in the key Samara and Nizhniy Novgorod areas. Another important achievement was a healthy balance in the contributions oftraffic and basket in the overall result across formats and regions. Thisdemonstrates our ability to continuously improve customer appeal and store valueproposition in parallel to implementing an efficient and attractive pricepolicy, especially in such highly competitive markets as Moscow and St.Petersburg." Lev Khasis, X5 Retail Group CEO, concluded: "Considering our strong store performance, which is supported by successfulintegration in commercial purchasing and logistics, we confidently look forwardto exceed the full year USD 5 billion net sales target. The Company is enteringthe most important quarter in terms of sales and new store opening alike, andhas all necessary execution plans and resources in place to meet its key 2007financial and operational objectives." - End - Note to Editors: X5 Retail Group N.V. is Russia's largest food retailer in terms of sales. As of30 September 2007, the Group had 573 company-managed soft discount storeslocated in Moscow (256), St. Petersburg (234) and other Russian areas (83), 163company managed supermarkets across Central Russia and Ukraine, including 101stores in Moscow (Moscow region and Yaroslavl region), and 13 company managedhypermarkets. As of 30 September 2007, X5's franchisees operated 627 stores across Russia andKazakhstan. 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 Net sales for the 1H 2007 were US$ 2,348 million, up +49% vs. 1H2006. Pyaterochka chain provided US$ 1,306 million of net sales; the Perekrestokchain contributed US$ 1,042 million of net sales. Forward looking statements: This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identifiedby 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 otherwords 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. 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 This information is provided by RNS The company news service from the London Stock Exchange