X5 Retail Group N.V. – Moody’s Changes Ooutlook to Positive
19 Jul 2007
Amsterdam, 19 July 2007 - Moody's Investors Service today changed the outlook on the B1 corporate family rating of X5 Retail Group N.V. (LSE: FIVE), Russia's leading 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 its leading position in the discount and supermarket markets amidst a still very fragmented Russian market. Given its strong positions in Moscow and St. Petersburg and good presence in promising regional markets supported by a competitive product offering and a tightly controlled efficient supply chain, the Company plans to grow without a significant deterioration in margins and increase its operating cash flow generation ability."
Moody's also states that further upward rating pressure could result from the Company's ability to de-leverage its balance sheet while maintaining its planned growth 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 is the second upgrade in two weeks, following the recent announcement by Standard & Poor's. These ratings' reviews reflect our excellent operating results and demonstrate the confidence of the investment community in the quality of our management in this period of rapid growth and change."
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