X5 Retail Group N.V. Reports 61% Net Retail Sales** Growth in USD Terms for the First Half 2008
10 Jul 2008
Amsterdam, 10 July 2008 - X5 Retail Group N.V., Russia's largest retailer in terms of
revenue (LSE ticker: “FIVE”), published today its retail sales and expansion results for the
second quarter and the first half of 2008.
Q2 2008 Highlights
• X5’s net retail sales excluding Karusel totaled USD 1,968 mln – an increase of 60% year-on-year;
• Karusel’s net retail sales surged 60% year-on-year to USD 307 mln;
• X5’s LFL sales excluding Karusel increased 24%;
• Karusel’s LFL sales growth totaled 33%;
• In Q2 2008 X5 added net 38 stores organically and further 23*** hypermarkets through the acquisition of Karusel;
• In Q2 2008 net addition of selling space through organic openings equaled 20.5 thousand sq.m., Karusel stores added further 132.0 thousand sq.m. in selling space.
H1 2008 Highlights
X5’s net retail sales excluding Karusel totaled USD 3,744 mln – an increase of 61% year-on-year;
• Karusel’s net retail sales surged 63% year-on- year to USD 559 mln;
• X5’s LFL sales excluding Karusel increased 27%;
• Karusel’s LFL sales growth totaled 35%;
• As at 30 June 2008 X5 operated 991 stores, including 23 Karusel hypermarkets;
• As at 30 June 2008 X5’s stores net selling area totaled 791.9 thousand sq.m., including 132.0 thousand sq.m. in selling space of Karusel hypermarkets.
* Excluding Karusel
** Net retail sales represent revenue from operations of X5 managed stores excluding VAT. This number differs
from total net sales that also include revenue from franchisees and other revenue. The total net sales number
will be reported along with the H1 2008 financial results.
Numbers provided in this press-release are preliminary and unaudited.
For your convenience, we provide net retail sales for Q2 2007 and 2008 both excluding and including Karusel
(on pro-forma basis). Q2 2007 numbers exclude results of operations of Korzinka, Strana Gerkulesia and Kama
Retail.
*** One additional Karusel store was not included as it is currently operating in a test mode
Lev Khasis, X5 Retail Group CEO, commented:
“The second quarter was very busy and important period for X5 – we completed the
acquisition of Formata and are pleased to report operating results both for X5 Retail Group
and Karusel for the first time. The rest of the year will also be challenging time for the
Company – in addition to aggressive expansion plans and continuous focus on performance of
existing stores, we will need to invest a lot of efforts in integration of acquired Karusel
hypermarkets. Additional area of focus for us going forward will be close cooperation with the government on
development of the new retail law. As the Chairman of Russian Association of Retail
Companies I see it as my mission to ensure that the new law is designed to meet the interests of
Russian consumers and to stimulate the development of the country’s still very young retail
sector.”
Antonio Melo, X5 Retail Group Chief Operating Officer, added:
“We are pleased to report healthy sales results in the second quarter of the year, but we believe
we could do better. We have identified certain areas for improvement, especially in regional
supermarkets and hypermarkets where we plan to focus on enhancement of each store’s value
proposition and will work with the assortment to ensure that our product mix makes us
different from competition and is tailored to meet every customer demand.
As planned, we have begun the integration of Karusel and already started stock taking in
Karusel stores. In parallel, we are fine-tuning the initial integration plan based on the data we
obtained after acquiring control. Also, given that we have purchased Karusel brand we will
review our approach towards rebranding of the acquired stores – as soon as we finalize the
necessary analysis, we will inform you of our decision.”
X5 Retail Group plans to provide an update on the integration progress, inform of any changes
in the integration plan, and its decision on rebranding along with the release of the Company’s
financial results for the first half 2008, which is scheduled for 28 August 2008. Simultaneously
X5 will provide revised guidance for the year with our expectations on Karusel stores’
performance and new hypermarket openings.
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