X5 Retail Regulatory News (FIVE)

X5 announces Q4 and FY 2021 financial results

Amsterdam, 16 March 2022 - X5 Retail Group N.V. ("X5" or the "Company", LSE and MOEX ticker: FIVE), a leading Russian food retailer that operates the Pyaterochka, Perekrestok and Chizhik retail chains, today released its unaudited1 condensed consolidated financial information for the year ended 31 December 2021.

Profit and loss statement highlights2

Revenue

Revenue growth reached 14.9% year-on-year in Q4 2021, driven by positive LFL sales, selling space expansion and 92.9% revenue growth in X5's digital businesses. The latter reflected higher demand from customers for online services, an incremental increase in the number of new online customers, expansion of express delivery and Vprok.ru Perekrestok operations to new geographies, expansion of the 5Post delivery network, additional new e-commerce partners for 5Post and the acquisition of Mnogo Lososya dark kitchens.

Selling space by format, square metres (sqm)

Q4 and FY 2021 LFL7 store performance by format, % change y-o-y

In Q4 2021, LFL sales performance accelerated year-on-year to 9.0%, supported by solid LFL results at Pyaterochka and Perekrestok at 9.8% and 6.0%, respectively.

The LFL basket was the main driver of LFL sales in Q4 2021, with LFL traffic in positive territory at 1.5% year-on-year.

For more details on net retail sales performance, please refer to X5's Q4 2021 Trading Update.

Selling, general and administrative (SG&A) expenses (excl. D&A&I and the impact of the Karusel transformation)

In Q4 2021, SG&A expenses excluding D&A&I, LTI, share-based payments and the impact of the Karusel transformation under IFRS 16 as a percentage of revenue increased by 32 b.p. to 14.6% (flat at 18.6% pre-IFRS 16), driven by higher other expenses, third-party services and lease expenses.

In 2021, SG&A expenses excluding D&A&I, LTI, share-based payments and the impact of the Karusel transformation under IFRS 16 as a percentage of revenue increased by 71 b.p. to 14.2% (increased by 56 b.p. to 18.6% pre-IFRS 16), driven by higher staff costs, lease expenses, utilities, third-party services and other expenses.

As a percentage of revenue, the Company's income from leases, subleases and other operations8 under IFRS 16 totalled 1.1%, an increase of 6 b.p. year-on-year in Q4 2021 (an increase of 18 b.p. to 1.0% pre-IFRS 16), due to the increase in revenue from sales of recyclable materials on the back of improved efficiency of internal processes.

EBITDA and EBITDA margin

D&A&I

Depreciation, amortisation and impairment costs under IFRS 16 decreased as a percentage of revenue by 73 b.p. year-on-year to 6.4% (down 23 b.p. year-on-year to 3.5% pre-IFRS 16) in Q4 2021, totalling RUB 39,010 million (RUB 21,117 million pre-IFRS 16). This was mainly driven by the optimisation of the Company's refurbishment plan, which was partially offset by additional impairment. In 2021, depreciation, amortisation and impairment costs under IFRS 16 decreased by 16 b.p. year-on-year to 6.8% (increased by 2 b.p. year-on-year to 3.5% pre-IFRS 16), totalling RUB 150,278 million (RUB 76,665 million pre-IFRS 16).

Non-operating gains and losses

Consolidated cash flow statement highlights

In Q4 2021, the Company's net cash from operating activities before changes in working capital under IFRS 16 increased by RUB 8,317 million (up RUB 6,769 million under pre-IFRS 16) and totalled RUB 66,274 million (RUB 39,628 million under pre-IFRS 16), reflecting business growth.

Net cash flow generated from operating activities under IFRS 16 totalled RUB 73,245 million in Q4 2021, up from RUB 36,057 million in Q4 2020 (RUB 57,578 million, up from RUB 20,354 million in Q4 2020 pre-IFRS 16), reflecting business growth and optimisation of cash flow management.

In Q4 2021, adj. net cash used in investing activities, which generally consists of payments for property, plant and equipment, under IFRS 16 increased immaterially and totalled RUB 25,615 million (totalled RUB 25,797 million under pre-IFRS 16). For 2021, adjusted net cash used in investing activities under IFRS 16 increased to RUB 89,435 million (RUB 90,295 million under pre-IFRS 16) from RUB 84,314 million (RUB 84,314 million under pre-IFRS 16) in 2020.

Net cash generated from financing activities under IFRS 16 totalled RUB 15,540 million (RUB 31,389 million pre-IFRS 16) in Q4 2021, compared with negative RUB 2,114 million (positive RUB 13,589 million pre-IFRS 16) in Q4 2020. In 2021, net cash used in financing activities under IFRS 16 increased to RUB 81,890 million from RUB 73,805 million (and increased to RUB 17,280 million from RUB 16,248 million pre-IFRS 16) in 2020.

Liquidity update

The Company's net debt/EBITDA ratio under IFRS 16 was 3.16x (1.67x pre-IFRS 16) as of 31 December 2021.

The Company's debt pre-IFRS 16 is 100% denominated in Russian roubles.

As of 31 December 2021, the Company had access to RUB 482,263 million in available credit limits with major Russian and international banks.

Dividends

In view of the current difficult market conditions and the need to allocate all resources towards supporting X5's ongoing operations, the Supervisory Board recommends that X5 does not pay a final dividend for 2021. This decision is guided by considerations that include X5's crucial role in providing food retail services with over 19,000 stores across Russia; the growing focus on supporting customers as inflation impacts their household budgets; and the need to support suppliers through difficult times in order to maintain a reliable supply chain and keep store shelves sufficiently stocked. The Supervisory Board believes that successful execution of these priorities will require financial resources, and that all stakeholders of the Company will benefit in the long term from X5 strengthening its reputation as a reliable partner for both customers and suppliers.

Issuance of audited 2021 Annual Report and financial statements

The Group expects a delay in the completion of the Dutch statutory audit of the annual report due to additional procedures required for companies operating in a primarily Russian environment. The date of release of the audited financial statements and annual report will be communicated in due course.

1. For details please see "Issuance of audited 2021 Annual Report and financial statements".

2. Please note that, in this and other tables and in the text of this press release, immaterial deviations in the calculation of % changes, subtotals and totals are due to rounding.

3. The pre-IFRS 16 financial measures are calculated by adjusting the applicable IFRS measures to include fixed lease expenses and fixed non-lease components of lease contracts and to exclude any gain on derecognition of right-of-use assets and lease liabilities, depreciation of right-of-use assets and interest on lease liabilities and gain/loss from sale of asset under sale and leaseback operations for the proportion of the rights retained recognised under IFRS 16.

4. Net retail sales represent revenue from the operations of X5-managed stores net of VAT. This number differs from revenue, which includes proceeds from wholesale operations, direct franchisees (royalty payments) and other revenue.

5. Adjusted EBITDA is EBITDA before costs related to the LTI programme, share-based payments, other one-off remuneration payment expenses and the impact of the Karusel transformation.

6. Including Vprok.ru Perekrestok dark stores and Chizhik stores

7. LFL comparisons of retail sales between two periods are comparisons of retail sales in local currency (including VAT) generated by the relevant stores. The stores that are included in LFL comparisons are those that have operated for at least 12 full months. Their sales are included in the LFL calculation starting from the day of the store's opening. We include all stores that fit our LFL criteria in each reporting period

8. Mainly consists of lease/sublease income, income from the sale of recyclable materials and other one-off gains

9. Adjusted for cash used for short-term financial investments

Note to Editors

X5 Retail Group N.V. (LSE and MOEX: FIVE; Fitch, BB+; Moody's, Ba1; S&P, BB+; RAEX, ruAA+ as of 31 December 2021) 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 Perekrestok, 5Post and Mnogo Lososya.

As of 31 December 2021, X5 had 19,121 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 17,972 Pyaterochka proximity stores, 990 Perekrestok supermarkets and 72 Chizhik hard discounters. The Company operates 47 DCs and 4,654 Company-owned trucks across the Russian Federation.

X5 is one of the largest employers in Russia. The Company employs over 340 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).

X5's shareholder structure is as follows: CTF Holdings S.A., 47.86%; Intertrust Trustees Ltd (Axon Trust), 11.43%; X5 directors, 0.10%; treasury shares, 0.01%; shareholders with less than 3%, 40.60%.

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 of 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.

For further details, please contact:

Maria Yazeva

Investor Relations Officer

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

e-mail: Maria.Yazeva@x5.ru

* FX rate: 73.6541 USD/RUB